UK's electricity sell-off gets final go-ahead

21 February 1994 00:00  [Source: ICB]

THE UK'S electricity regulatory board has finally removed the last obstacle to government plans to sell its remaining stakes in the country's two major power generators, National Power and PowerGen.

At one stage it was believed that regulator Professor Stephen Littlechild was going to refer the two companies to the Monopolies and Mergers Commission, over complaints that they had abused their market position so as to keep prices high. Now the decision guarantees that the two companies will sell off some generating plants and reduce prices to customers over the next two years.

For the UK's chemical industry the agreement 'represents a much needed reversal of the upward march in pool price levels'. But, as pointed out by Doug Rodger executive director, Business and Technology at the Chemical Industries Association, 'the move will provide only a very small reduction in the bills of industrial consumers and prices for large users will remain well above the levels needed to meet international competition.' The CIA has estimated that the deal will bring a reduction of only about 3% in prices paid by large industrial users.

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