ABSTRACT
Regulatory issues in utility industries such as electricity supply are numerous, frequently complex, and generally poorly understood in Britain. The key to promoting competition in electricity distribution lies in preventing the monopolisation of information flows to regulators. The government should therefore strongly resist any suggestions that the Area Boards should be amalgamated into a single distribution company. Properly done, privatisation will greatly enhance the role of the Boards and, provided that they receive some protection from the market power of a dominant bulk supplier, will enable them to exert considerable competitive pressures in wholesale markets. The Energy Act 1983 removed certain statutory obstacles to entry but has largely been ineffective in promoting private production. Policy towards the coal industry is relevant because fair competition in bulk supplies requires that generating companies have access to their major input on equal terms.
