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Electricity prices cut

Mary Fagan,Industrial Correspondent
Thursday 07 April 1994 18:02 EDT
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THE COST of wholesale electricity will be cut by at least pounds 30m this year as a result of a scheme agreed by the National Grid Company and Offer, the electricity regulator, writes Mary Fagan.

Under the plan the NGC must reduce the amount paid to generators for keeping the national electricity system stable and maintaining security of supply. It must also pass on most of the savings to customers buying in the wholesale electricity trading pool.

The NGC announcement will help regional electricity companies and large consumers who buy electricity direct from the pool rather than through contracts with generators.

But it was clouded by a report from UBS, the merchant bank, that predicted a 39 per cent fall in the regional companies' earnings in 1995/96 as a result of Offer's review of distribution price controls.

Shares in the regional companies fell by up to 40p but later rallied on news of the NGC's plans.

Market report, page 30

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