§ Mr. Allan StewartTo ask the Secretary of State for Scotland what efficiency factors he intends to set in the licences to be issued to the Scottish electricity industry.
§ Mr. RifkindAs indicated in my reply of 22 March 1990,Official Report, column 705, the maximum average distribution, supply and transmission prices to be charged by Scottish Power plc and Hydro-Electric plc will be capped and indexed by an RPI-X formula. I have now decided that the values of X will be as follows:
152W
Scottish Power Hydro-Electric Transmission 1.0 0.5 Distribution and Supply 0.5 0.3 These values allow for capital expenditure on the system significantly in excess of historic levels so that the present high security standards are maintained. They also assume the achievement of increased cost efficiency within these businesses as private sector disciplines are introduced.
Taken together with my decision that the generation element within the overall price charged to Scottish consumers should not be allowed to increase by more than RPI over the next four years, this means that average price increases after vesting to all consumers taking less than 10 MW will be held below the rate of inflation at least until April 1994. Larger customers will benefit from the downward competitive pressure on prices under the new industry structure.