Cheap power, but prices still high
15 Jan 2000
Electricity prices in the UK have plummeted by 7.4 per cent over the past year, the largest fall since the market was deregulated in 1990. But some companies are refusing to pass on the savings generated by a drop in the fossil fuel levy - `taking unfair advantage of their customers,' according to the director of National Utilities Services, Andrew Johns.
There are three reasons for the fall: the reduction in the fossil fuel levy from 10 per cent to 2.2 per cent; a change in the way transmission charges are levied; and reduced distribution charges. In theory, the UK should have among the cheapest electricity in Europe, with only Finland, Norway and Sweden charging less.
But some users are not reaping the benefits. Several electricity suppliers have refused to pass on the fossil fuel levy reduction, arguing that supply contracts were negotiated before the reduction was announced. This, they claim, means that they can keep the extra money. `Offer [the electricity watchdog] is failing to protect customers' interests by not becoming involved,' says Johns. `It remains to be seen whether the government will intervene and force the regulator to take a more active role.'
