HC Deb 22 May 1995 vol 260 cc482-3W
Mr. Salmond

To ask the President of the Board of Trade, pursuant to his oral statement of 9 May,Official Report, column 565, if he will break down into its constituent parts the components of his forecast of an 8 per cent. fall in electricity prices in Scotland with particular reference to savings accruing from the ending of the nuclear premium. [24146]

Mr. Kynoch

The premium element in the price which Scottish Nuclear receives for its output from Scottish Power and Hydro-Electric under the nuclear energy agreement began to reduce in 1994–95. It was due to end entirely in 1998–99. The Government have now decided that the remaining element of the premium will not continue until 1998; instead it will be ended at the point of privatising Scottish Nuclear's two advanced gas-cooled reactor stations. It is proposed that changes will be made in the supply price control to ensure that the savings to Scottish Power and Hydro-Electric will be passed through to Scottish franchise customers. The Office of Electricity Regulation has calculated that the removal of the premium between 1994–95 and 1996–97 will result in franchise electricity prices in Scotland reducing by around 8 per cent. in real terms over that period.

Mr. Home Robertson

To ask the Secretary of State for Scotland what will be the net effect on electricity bills per household in Scotland of the premature abolition of the nuclear premium under the Government's plans to privatise the nuclear industry. [24502]

Mr. Kynoch

The premium element in the price which Scottish Nuclear receives for its output from Scottish Power and Hydro-Electric under the nuclear energy agreement began to reduce in 1994–95. It was due to end entirely in 1998–99. The Government have now decided that the remaining element of the premium will not continue until 1998 but will be ended at the point of privatising Scottish Nuclear's two AGR stations. At that time, changes will be made in the supply price control to ensure that the resultant savings to Scottish Power and Hydro-Electric are passed through to Scottish franchise customers. The Office of Electricity Regulation has calculated that the removal of the premium between 1994–95 and 1996–97 will result in franchise electricity prices in Scotland reducing by around 8 per cent. in real terms over that period, of which around 3 to 4 per cent. will be delivered in 1996–97.