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Select Committee on Trade and Industry First Report
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The Committee deliberated.
Draft Report (Energy Regulation),
proposed by the Chairman, brought up and read.
Ordered, That the draft
Report be read a second time, paragraph by paragraph. Paragraphs 1 to 10 read and agreed to. Paragraph 11 read, amended, and agreed to. Paragraphs 12 to 20 read and agreed to. Paragraph 21 read, amended, and agreed to. Paragraphs 22 and 23 read and agreed to. Paragraph 24 read, amended, and agreed to. Paragraph 25 read and agreed to. Paragraphs 26 and 27 read, amended, and agreed to. Paragraphs 28 read and agreed to. Paragraph 29 read and agreed to. Paragraph 131 read, agreed to and inserted (now paragraph 30). Paragraph 30 read, amended, and agreed to (now paragraph 31). Paragraphs 31 and 32 read and agreed to (now paragraphs 32 and 33).
Paragraph 33 read as follows:
"One reflection of
the extent to which consumers feel their interests are being protected
is the level of customer complaints, and here the recent experience
of the two energy industries has differed radically. While the
ECCCG told us that the volume of complaints had halved in two
years the number received by the GCC had increased by over 90%
in the last year, an increase not wholly to be explained by reference
to problems arising from the introduction of competition in the
south-west." Paragraph disagreed to. Paragraphs 34 to 38 read, amended, and agreed to. A new paragraph - (Sir Cranley Onslow) - brought up, read the first and second time, and inserted (now paragraph 39). Paragraphs 39 to 41 read and agreed to (now paragraphs 40 to 42). Paragraphs 42 and 43 read, amended, and agreed to (now paragraphs 43 and 44). Paragraph 44 read and agreed to (now paragraph 45). Paragraph 45 postponed.
Paragraph 46 read, as follows:
"We note that the RPI-X
approach has been improved over the years by introducing correction
factors to eliminate forecasting errors which have resulted in
windfall gains. Out-performance might occur as a result of factors
outside the control of the company, genuine efficiency improvements
or underspend on capital expenditure, which last can be classified
as illegitimate gains. The regulators need to focus more closely
on analysing the sources of out-performance and particularly to
analyse illegitimate economic profits from activities such as
deliberate under-investment on an agreed programme. When such
a distinction has been made, the regulator could then claw-back
any illegitimate out-performance. Such analysis would greatly
improve the estimation of X and as a result be more acceptable
to the general public." Paragraph disagreed to. Paragraphs 47 to 52 read and agreed to. Paragraph 53 read, amended, and agreed to.
Paragraph 54 read, as follows:
"There are convincing
arguments why formal profit-sharing mechanisms would not necessarily
be an improvement over the current system. We would encourage
regulators to consider developing voluntary acceleration of return
of benefits further by introducing a clear regulatory contract
which would give companies confidence that this sharing would
be taken into account at the next period of review. We also encourage
the adoption of some form of profit-sharing mechanism in cases
where disincentive effects are considered to be small, where profits
can be clearly defined and where there is little prospect of effective
competition developing." Paragraph disagreed to. Paragraph 55 read and agreed to (now paragraph 54). Paragraph 56 read, amended, and agreed to (now paragraph 55). Paragraphs 57 to 60 read and agreed to (now paragraphs 56 to 59). Paragraphs 61 and 62 read, amended, and agreed to (now paragraphs 60 and 62). Paragraph 63 to 65 read and agreed to (now paragraphs 62 to 64). Paragraph 66 read, amended, and agreed to (now paragraph 65). Paragraphs 67 to 73 read and agreed to (now paragraphs 66 to 72). Paragraph 74 read, amended, and agreed to (now paragraph 73). Paragraphs 75 and 76 read and agreed to (now paragraphs 74 and 75). Paragraph 77 read, amended, and agreed to (now paragraph 76). Paragraphs 78 to 83 read and agreed to (now paragraphs 77 to 82). Paragraphs 84 and 85 read, amended, and agreed to (now paragraphs 83 and 84). Paragraph 86 read and agreed to (now paragraph 85). Paragraph 87 read, amended, and agreed to (now paragraph 86). Paragraphs 88 to 98 read and agreed to (now paragraphs 87 to 97). Paragraphs 99 and 100 read, amended, and agreed to (now paragraphs 98 and 99). Paragraph 101 read and agreed to (now paragraph 100). Paragraphs 102 and 103 read, amended, and agreed to (now paragraphs 101 and 102).
Paragraph 104 read and agreed
to (now paragraph 103).
Ordered,
That further consideration of the Chairman's draft Report be now
adjourned.- (The Chairman).
Report to be further considered
upon Tuesday 11 March.
[Adjourned till Tuesday
11 March at half past Four o'clock.
Consideration of the Chairman's
draft Report resumed. Paragraph 105 postponed. Paragraphs 106 and 107 read and agreed to (now paragraphs 105 and 106). Paragraph 108 postponed. Paragraphs 109 and 110 read and agreed to (now paragraphs 108 and 109). Paragraph 111 postponed. Paragraphs 112 and 113 read and agreed to (now paragraphs 111 and 112). Paragraph 114 postponed. Paragraphs 115 to 118 read and agreed to (now paragraphs 114 to 117). Paragraph 119 read, amended, and agreed to. Paragraphs 120 and 121 read and agreed to (now paragraphs 119 and 120). Paragraph 122 read, amended, and agreed to (now paragraph 121). Paragraphs 123 to 127 read and agreed to (now paragraphs 122 to 126). Paragraph 128 postponed. Paragraphs 129 and 130 read and agreed to (now paragraphs 128 and 129). Paragraph 132 read, amended, and agreed to (now paragraph 130). Paragraphs 133 to 139 read and agreed to (now paragraphs 131 to 137). Paragraphs 140 to 144 postponed. Paragraph 145 read and agreed to (now paragraph 143). Paragraph 146 read, amended, and agreed to (now paragraph 144). Paragraph 147 postponed. Paragraph 148 read and agreed to (now paragraph 146). Postponed paragraph 105 read, amended, and agreed to (now paragraph 104). Postponed paragraph 108 read and agreed to (now paragraph 107). Postponed paragraph 111 read, amended, and agreed to (now paragraph 110). Postponed paragraph 114 read, amended, and agreed to (now paragraph 113). Paragraph 149 read, amended, and agreed to (now paragraph 147). Paragraphs 150 to 163 read and agreed to (now paragraphs 148 to 161). Paragraphs 164 to 166 postponed. Paragraph 167 read and agreed to (now paragraph 165). Paragraphs 168 and 169 read, amended, and agreed to (now paragraphs 166 and 167). Paragraphs 170 and 171 read and agreed to (now paragraphs 168 and 169). Paragraph 172 read, amended, and agreed to (now paragraph 170). Paragraph 173 postponed. Paragraphs 174 to 185 read and agreed to (now paragraphs 172 to 183). Paragraphs 186 to 188 postponed. Paragraph 189 read and agreed to (now paragraph 187). Paragraph 190 read, amended, and agreed to (now paragraph 188). Paragraphs 191 and 192 postponed. Paragraphs 193 to 195 read and agreed to (now paragraphs 191 to 193). Paragraph 196 read, amended, and agreed to (now paragraph 194). Postponed paragraph 45 read, amended, and agreed to (now paragraph 46). Postponed paragraph 128 read and agreed to (now paragraph 127). Postponed paragraph 140 read and agreed to (now paragraph 138). Postponed paragraph 141 read, amended, and agreed to (now paragraph 139). Postponed paragraphs 142 to 144 read and agreed to (now paragraphs 140 to 142). Postponed paragraph 147 read and agreed to (now paragraph 145).
Postponed paragraphs 164 to 166
read and agreed to (now paragraphs 162 to 164). Postponed paragraph 173 read, amended, and agreed to (now paragraph 171). Postponed paragraph 186 read and agreed to (now paragraph 184). Postponed paragraph 187 read, amended, and agreed to (now paragraph 185). Postponed paragraph 188 read and agreed to (now paragraph 186).
Postponed paragraphs 191 and
192 read and agreed to (now paragraphs 189 and 190).
Resolved, That the Report,
as amended, be the First Report of the Committee to the House.
Ordered, That the Chairman
do make the Report to the House.
Ordered, That the provisions
of Standing Order No. 116 (Select Committees (reports)) be applied
to the Report.
Several Memoranda were ordered
to be reported to the House.
[Adjourned till Wednesday
12 March at a quarter past Ten o'clock.
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