Electricity firms cleared of being anti-competitive

OFFER, the electricity watchdog, has cleared the regional electricity companies of allegations that they cross-subsidise their retail businesses from electricity supply and distribution operations.

Its report said that in aggregate the companies made retail operating losses of more than pounds 100m over the past three years, but these were at the expense of shareholders, not consumers.

The report followed a complaint by Dixons, the high-street electrical retailer, that the companies were acting in an anti-competitive way. The Office of Fair Trading, which received the Offer report, said it did not intend to take formal action against the electricity firms.

The OFT said that no regional electricity company was significant enough in retailing to command market power, and any retail losses did not enable them to charge more for electricity. However, Sir Bryan Carsberg, director-general of the OFT, said he wanted all the companies to publish their retail accounts separately and he intended to monitor the situation.

Roger Salmons, of Dixons, was disappointed that Offer had not decided to take action, but said the report vindicated his company's complaint.