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Monday, 27 April, 1998, 08:42 GMT 09:42 UK
Electricity deregulation: a shock to the system?
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Consumers will no longer be tied to their local supplier
Consumer groups are questioning how much customers will really benefit from electricity deregulation enabling them to buy their power from suppliers anywhere in Britain.

The electricity industry regulator, the Office of Electricity Regulation (Offer) is launching a publicity campaign on Monday to inform the public about the changes, which take effect this Autumn.

Cheapest supplier

The deregulation means customers will no longer be tied to buying electricity from their local company. Instead they will be able to take the best deal on the market. For example, someone in Manchester might choose to get their power from London Electricity.

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Consumer groups want greater competition throughout the industry
However, deregulation will increase competition only among the suppliers - who manage the delivery of electricity and bill consumers. The generator companies, who own the power stations, and the National Grid, which runs the distribution system, will not at present be touched by the changes.

Sharon Dee, of the Consumers' Association, says the price cuts from supplier deregulation will only be small because a large proportion of each electricity bill is made up of generating costs.

'Confusion marketing'

She warns of an outbreak of "confusion marketing" as supply companies bombard customers with competing price offers.

As many of these offers will involve a combined electricity and gas deal, consumers will find it difficult to compare like with like and work out which is the best, she says.

However, Yvonne Constance, Chairperson of the Electricity Consumers Association, said the introduction of greater competition in the suppliers would lead to generators changing their methods and cutting prices.

She also said there was a review under way of the generators' trading practices, which would lead to proposals for increasing competition in that part of the industry.

Ms Constance welcomed the Offer publicity campaign telling consumers they will not need new wiring or another metre in their home to switch suppliers to take advantage of lower prices.

She also advised customers to shop around to make certain they got the best deal. "Don't rush after the first offer. There will be more than one," she said.

See also:

03 Mar 98 | Business
Texas raises Energy bid to 4.46bn
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