Thursday, October 7, 1999 Published at 20:09 GMT 21:09 UK
Power prices set to drop
At present two companies dominate the Scottish market
Scottish consumers can expect savings of up to 10% in their power bills from next year, following changes announced by the gas and electricity regulator.
Before privatisation, electricity charges in Scotland were seven per cent lower than in England and Wales. Now they are five per cent higher.
The changes being put forward by the regulator, Callum McCarthy, will allow new companies to challenge the domination of Scottish Power and Hydro Electric.
Mr McCarthy is proposing two key reforms which he said could bring about reductions of up to 10% within five years in wholesale prices. This would likely be reflected in retail prices.
For transmission prices - which account for about 5% of the average domestic bill - Mr McCarthy is proposing a 13% cut for ScottishPower, and a 5% cut for Scottish Hydro-Electric.
He said that was equivalent to a price reduction for Scotland of almost £10m, or £1 annually for domestic customers of both companies.
Mr McCarthy believes that a Scotland-wide basis of trading - which will be compatible with new electricity trading arrangements being developed for England and Wales - should create a fairer pricing structure for customers.
Mr McCarthy added: "All the changes are designed to promote competition in Scotland and to reflect the fact that competition in wholesale prices will bring benefit to competing suppliers and to customers, both industrial and domestic.
Scottish Power said: "Ofgem's view of future arrangements is consistent with ScottishPower's and we will work with the regulator to ensure Scottish customers continue to benefit."
The company denied that its customers had got a raw deal, saying that since privatisation they had enjoyed lower bills than their English counterparts - with the average Scottish customer paying £61 less over the period.