§ Mr. Patrick ThompsonTo ask the Secretary of State for Energy whether he has received the Central Electricity Generating Board's second response to the report by the Monopolies and Mergers Commission on the efficiency and costs of transmission of electricity.
§ Mr. Michael SpicerThe Central Electricity Generating Board has sent me its second response to the report which was published on 26 June 1987. Copies of the response have been placed in the Library.
The board's response summarises the action which the board has taken and is continuing to take. Of the five areas identified by the commission requiring priority action, progress has been made as follows:
1) Clear Definition of Board Responsibilities
The board will continue to ensure that the responsibilities of executive board members are clearly defined and understood up to the vesting of the CEGB's successor bodies. The CEGB has also identified the senior management of the successor bodies. It is important, particularly in view of the period of change that the industry is presently undergoing, that board members' responsibilities remain clearly defined.
2) Future Management of the Five Centre Grid Control Project
The board announced in June 1988 that it had awarded the contract for its five centre grid control project to Control Data Corporation. The CDC system will provide a single fully integrated computer system to support the operation and control of the high voltage grid transmission system. When operational the system will continuously collect, display and calculate information about power flowing through the network and the state of the network itself. The system will provide an effective mechanism with which to manage the grid.
3) Year to Year Changes in Transmission Plans, and
4) Fluctuations in estimated Plant and Equipment Requirements
Initial work on reviewing the board's last five transmission plans is expected to be complete by the end of this year. My Department will keep in touch with the progress of the review.
5) Approach to Budget Setting
The board has introduced a new project appraisal system which ensures that all projects are carefully analysed and re-examined. To ensure compliance with tight financial disciplines the board has increased the size of its audit function.
The board has responded positively to the recommendations made by the MMC and has made good progress in the fields of system operation and planning. I welcome the board's response and the progress it is making towards meeting the recommendations of the commission.
Since the board's first response the Government have announced their proposals to privatise the electricity supply industry, under which the board's transmission 195W system will be managed by a new transmission company. These proposals represent major changes in the organisational structure of the industry, including the management of the transmission system, and the board's second response takes account of these proposed changes. In view of these impending changes it is unlikely that the board will be called upon to produce a third response although my Department will keep in touch with the board on progress towards meeting the MMC recommendations.