OFGEM CONSULTS ON REMOVING THE SELF-SUPPLY RESTRICTION

OFGEM CONSULTS ON REMOVING THE SELF-SUPPLY RESTRICTION Ø Consultation on removal of self-supply restriction Ø Increased competition means restriction is no longer appropriate Ø Removal of market distortion Increased competition in both retail and wholesale electricity markets has prompted proposals by energy regulator Ofgem to lift a long-standing restriction on a number of electricity supply companies. The self-supply restriction limits certain suppliers' ability to use electricity sourced from generation facilities which are owned by the same group to supply customers within the region they previously served as Public Electricity Suppliers. Ofgem believes that the time is ripe to lift the restriction because: Increased competition in both the generation and the supply of electricity means the restriction is no longer appropriate. It only applies to certain of the vertically-integrated electricity suppliers and so creates a distortion in the market. In order to monitor and enforce the restriction effectively, Ofgem would need to introduce disproportionate further regulations. Anti-competitive behaviour can be more appropriately addressed using Ofgem's powers under the Competition Act 1998. Iain Osborne, Ofgem Director of Supply, said: "Today's retail and wholesale electricity markets are competitive and liquid. The self-supply condition dates from an era of monopoly suppliers and a highly concentrated generation market. Ofgem believes it has outlived its usefulness and is now distorting the market." Notes to editors: 1. Copies of the consultation document: Restriction on Self-Supply: Initial Proposals are available from then Ofgem website at http://www.ofgem.gov.uk/public/pub2002.htm 2. Responses are requested by 8 July 2002 3. Ofgem is the Office of the Gas and Electricity Markets, regulating the gas and electricity industries in Great Britain. Ofgem's aim is to bring choice and value to all gas and electricity customers by promoting competition and regulating monopolies. Ofgem is governed by an authority and its powers are provided for under the Gas Act 1986, the Electricity Act 1989 and the Utilities Act 2000 For further press information contact: Richard Hunt on 020 7901 7158 Danny Wilkinson on 020 7901 7022 Mark Stockwell on 020 7901 7484 Out of hours contact: 07818 457 969 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/05/13/20020513BIT01240/wkr0001.doc http://www.waymaker.net/bitonline/2002/05/13/20020513BIT01240/wkr0002.pdf