APPENDIX 24
Memorandum submitted by the Deputy Director
General for Scotland, Office of Electricity Regulation
Thank you for your letter of 30 March seeking
a memorandum on the impact of the Boxing Day storms on the British
public electricity suppliers.
The storms impacted particularly badly on ScottishPower,
Northern Electric and NORWEB, although other companies were also
affected. In total nearly a million customers lost supply as a
result of the storms, some remaining off-supply for a full week.
We have instigated a full inquiry into the way
companies handled the problems suffered during the storms, and
expect to publish a report within the next three weeks. I will
ensure that your are sent a copy of this report once it is published.
You specifically ask about levels of capital
expenditure. This is an issue being taken forward as part of the
Distribution Price Control Review, where I expect to make firm
proposals in November. There is a fine judgement to be made between
increasing expenditure to improve reliability and increasing costs,
particularly as it is unclear how far customers are willing to
meet these costs. We have commissioned an independent survey of
customers seeking their views and are also considering closely
the companies' own proposals in this areas. I will ensure you
receive a copy of our next consultation paper on the Distribution
Price Control Review, scheduled for mid-May, which will cover
this issue.
12 April 1999
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