The UK became the first country in the world to offer all electricity and gas customers – industrial, commercial and domestic – the choice of which company supplies their electricity.

The electricity market for small businesses and domestic customers was fully opened to competition on 24 May, after a rolling programme which started in September 1998.

In the domestic gas market, the National Audit Office estimated that, on average, customers who have changed supplier have saved £78 a year on their gas bill. In the electricity market, prices vary from area to area, but savings of £35-40 on an average annual bill of £275 are on offer to domestic customers.

So far, over 4.5 million domestic gas customers and 1.5 million domestic electricity customers have changed suppliers. Electricity customers are switching at the rate of 100 000 a week. In the gas market, the figure is around 40 000 a week.

Callum McCarthy, Director General of Electricity and Gas Supply, said: “My message for customers is that you now have a choice. Please use that choice to the full.

“Competition affords opportunities for suppliers, but imposes obligations and responsibilities as well. We will be resolute in ensuring that suppliers discharge their responsibilities fully. This means proper and careful supervision of the sales force, and systems that work effectively and consistently to transfer customers without error.

“OFFER and Ofgas will pursue – and is pursuing – any instances of failure by suppliers to meet their responsibilities. It is in everyone’s interest – customer, supplier, regulator and government – that these responsibilities are fully and completely discharged.”

  • Meanwhile, National Power of the UK, which is still in the throes of divesting its 4000 MWe Drax coal-fired plant, has announced that it is considering plans to close down three UK generation facilities with a total capacity of 1600 MWe. Although the announcement was prompted by concerns of overcapacity in the UK, Callum McCarthy stated that an independent enquiry of the impact on the industry would be carried out before a decision would be made. Two of the three plants, Blythe A and Blythe B, are coal-fired. The third, at Fawley, is oil-fired. Blythe A is already mothballed during the summer trough of low demand, and with the closure of older, less efficient plants, National Power hopes to improve its bottom line.

    National Power, which recently ousted its chief executive Keith Henry, blamed faltering UK profits and problems overseas for a 21.6 per cent fall in pre-tax profits before exceptional items to £571 million. The company is under considerable pressure to cut costs by 20 per cent following its announcement of a dividend cut for shareholders, the first UK energy interest to do so since privatization in 1991.