Select Committee on Trade and Industry Annxes to the Report

Annex 2


£ million
Allowable Set up costs
Annual operating cos
Allowed charge per year
PES Data Management 1998/20011
PES Data Management 2000/20052
Supplier costs 2000-20053
Scottish Settlement


  1 PES Data Management charges are included in distribution charges. The annual charge level shown is price controlled. This figure relates to the allowances made in 1998-2000.

  2 This figure relates to the allowances made for 2000-05. One third of costs have been transferred to suppliers, as meter reading activity becomes a supplier responsiblity.

  3 Supplier costs are estimated and suppliers may incur lower costs depending on how they source meter reading services, Ofgem has not been prescriptive in this area.

  4 Other Costs include costs associated with the new Data Transfer Service and the establishment and operation of the Master Registration Agreement that are not covered under other headings.

  5 Although Pool set up costs increased by 25 million, only half of the increase from 59 million could be recovered.

  6 Pool and Scottish Settlement operating costs are met by both generators and suppliers 50/50 for the Pool and 30/70 for the Scottish Settlement respectively.

  7 Scottish Settlement set up costs are met 30 per cent by generators and 70 per cent by suppliers.

  8 Set up costs are normally recovered over a five year period. Hence the allowed charge per year is calculated by (Set UP Costsx5) + Annual Operating Costs. The exception is the PES Data Management Charges. These are recovered over a seven year period.

  9 For 1999-2000 this was reduced by about £50 million because of the delays in implementing market opening.


A note on the timescale of domestic electricity liberalisation since 1998 and on any delays

  The initial opening of the market took place on 14 September 1998 in accordance with the timetable established in January 1998. Further areas opened as the local PESs's systems satisfactorily completed testing. Southern Electric was the last PES to commence opening its area (in January 1999) and, as a result, incurred additional penalties under the price controls. Market opening was completed in all areas in May 1999, one month ahead of the planned date.

Coal, Fourth Report of Session 1997-98, HC 404: Energy Policy, Fifth Report of 1997-98, HC 471: Government Response to Fourth and Fifth Reports, CM 4071

  1.  In October 1997, the Committee decided to hear oral evidence in December 1997 on the emerging problems in the coal industry, as the end of the five year contracts signed in 1993 for supply of coal to the electricity generators drew near, and as the attractions of gas as a means of generation grew. The December 1997 oral evidence coincided with the announcement of a moratorium on consent for new generation plant. In March 1998 the Committee took further evidence on the Environment Agency's January 1998 proposals for tighter controls on sulphur emissions. The Committee reported in March 1998.

  2.  At the same time as deciding on the coal inquiry the Committee had decided in principle to undertake a more general inquiry into energy policy, covering a range of issues. On 22 December 1997 the Government announced a Review of Energy Sources for Power Generation. The Committee held five sessions of oral evidence, including one in Aberdeen, and reported in June 1998. The Government announced the preliminary conclusions of its Review in June 1998 and published its final Conclusions in October 1998, together with Replies to the Committee's Reports.

  3.  The Replies were generally positive in tone, and some specific recommendations were accepted, including information to Parliament on consents given for new generating capacity, and explicit recognition of safety as a priority concern. It did not accept the Committee's doubts about continuation of the moratorium: nor its recommendation for a formal presumption in long-term planning that new nuclear plant might be required.

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