§ Mr. WrayTo ask the Secretary of State for Energy (1) what specific (i) economic, (ii) commercial, (iii) financial and (iv) technical factors will introduce real competition after electricity privatisation; and if he will detail how such competition will reduce(a) the cost of supplies, (b) the cost of the labour force, and will increase (c) investment, (d) research and development and (e) efficiency, and, in general, reduce the prices of electricity to domestic and non-domestic consumers;
(2) what specific (i) economic, (ii) commercial, (iii) financial and (iv) technical factors he considered when concluding that his privatisation proposals will produce real competition in the generating of electricity.
§ Mr. Michael SpicerThere is no natural monopoly in the generation of electricity, which accounts for about 80 per cent. of the total cost of electricity. Our proposals will introduce competition in generation, and will also provide scope for generators and others to compete with distribution companies in supplying customers directly. Competition in these areas will help protect customers from monopoly abuse and put downward pressure on costs.
§ Mr. WrayTo ask the Secretary of State for Energy what information he has as to the western countries in which the generation of electricity by nuclear power is in the hands of (i) the state, (ii) the private sector and (iii) the state and private sector.
§ Mr. Michael SpicerThe information requested by the hon. Member is as follows:
State France Netherlands Italy South Africa Canada United Kingdom Private West Germany Belgium Japan Private/Public USA Switzerland Spain Finland Sweden
§ Mr. WrayTo ask the Secretary of State for Energy (1) if he will detail the effects on efficiency produced by the 53W separation of generation from transmission in his electricity privatisation proposals and his measures to deal with such effects;
(2) if he can now give a detailed estimate of the extra cost of splitting the transmission responsibilities of electricity from the main generators in his privatisation proposals.
§ Mr. Michael SpicerThe Government believe that any additional costs that might arise from the transfer of ownership of the grid will be outweighed by the benefits of increased competition. The separation of the grid from the generators is an essential step to increase competition in generation. The distribution companies, which will own the grid company, will have every reason to encourage new generators to connect to the system. No generator owning the grid would have such an incentive.
§ Mr. WrayTo ask the Secretary of State for Energy (1) if, in his proposals for the privatisation of the electricity system, he will introduce measures aimed at preventing area board mergers or any other similar move likely to produce monopolistic practices;
(2) what proposals he has to avoid monopolistic practices in the generation, distribution and commercialisation of electricity once the privatisation of the electricity system is put into operation.
§ Mr. Michael SpicerOur privatisation proposals will introduce effective competition in the generation and supply of electricity. Detailed proposals for regulating those areas where monopolies will remain after privatisation will be included in legislation and licences for the new companies.
§ Mr. WrayTo ask the Secretary of State for Energy what are his specific proposals for the proper representation of consumers of domestic and commercial electric power once the electricity system is privatised.
§ Mr. Michael SpicerThe White Paper, Privatising Electricity (Cm. 322), made it clear that arrangements will be made for maintaining an effective voice for customers' interests after privatisation. We want to ensure that none of the benefits of the existing customer representation arrangements are lost.
The detailed arrangements necessary to achieve our objective are still under consideration. We have undertaken detailed and lengthy discussions with all the existing area electricity consultative councils and the Electricity Consumers' Council and will take their views into account when finalising the future arrangements for consumer representation.
§ Mr. WrayTo ask the Secretary of State for Energy what are his proposals for the regulation of the lower voltage grid in the case of privatisation of the electricity system.
§ Mr. Michael SpicerThe regulatory regime will ensure access to the lower voltage system on reasonable terms.
§ Mr. WrayTo ask the Secretary of State for Energy what are his specific proposals for the responsibility for planning electricity generation and supply in Britain in the event of the privatisation of the electricity system.
§ Mr. Michael SpicerDistribution companies in England and Wales will have a statutory obligation to54W supply and will need to determine the amount of electricity that they will require to meet demand and satisfy the obligation. They will then obtain this by contracting for sufficient capacity and energy from generating companies, or by generating themselves.