§ Mr. PrescottTo ask the Secretary of State for Energy what is the cost of the investment programme for the electricity supply industry to the year 1990; how the programme is made up; and if he will make a statement.
§ Mr. ParkinsonThe industry's investment programme for the years in question is comprised as follows:
£ million outturn prices 1987–88 1988–89 1989–90 1990–91 CEGB 673.0 780.0 970.0 1,530.0 Area Boards 668.0 752.9 759.4 799.4 Total 1,341.0 1,532.9 1,729.4 2,329.4 The CEGB expenditure on new generation projects includes the costs of completing the existing programme of AGR stations, the costs of Sizewell B, and a provision for the initial costs of new coal and nuclear stations for which approval has not yet been granted.
§ Mr. PrescottTo ask the Secretary of State for Energy how much of the electricity supply industry's investment programme is renewal of existing assets and how much is to meet new demand.
§ Mr. ParkinsonThe industry's investment programme represents a comprehensive programme designed to meet new load, to serve existing demand more economically and to replace old plant. Many projects are undertaken for a combination of these reasons. It is not feasible to divide up the expenditure in the way suggested.
§ Mr. PrescottTo ask the Secretary of State for Energy what is the assumption for inflation built into the estimates for the investment programme for the electricity supply industry.
201W
§ Mr. ParkinsonThe industry has assumed general inflation of 4 per cent, for the year ending 31 March 1989, and 5 per cent, per annum thereafter.
§ Mr. PrescottTo ask the Secretary of State for Energy by how much electricity prices will have increased in the three years to April 1988.
§ Mr. ParkinsonThe last substantive increase in electricity tariffs was in April 1985, when domestic tariffs rose by an average of 4.3 per cent, and industrial tariffs by an average of 4.9 per cent. Tariff increases in April 1986 for domestic consumers were removed, and, in the case of industrial consumers more than offset, by reductions later in the year. There has been no increase in 1987.
The net effect of these changes has been to reduce the average real price by domestic consumers by 6.9 per cent, between April 1985 and October 1987. The corresponding figure for industrial consumers is a reduction of 10.6 per cent, (from Q2 1985 to Q2 1987) Assuming that inflation continues at its current level of around 4 per cent, per annum until the end of the financial year, even after the next electricity tariff increase has taken effect, prices will be no higher in real terms than in April 1985.