Generators told to seek plant sales

OFFER, the electricity watchdog, has told National Power and PowerGen to offer for sale any power stations earmarked for closure. The companies have also been asked to consider approaches from interested buyers of still-viable plant, writes Mary Fagan.

Professor Stephen Littlechild, director-general of Offer, said the sale of power plants would increase competition and help to allay fears over the dominance of the two generators and potential abuse of their market power.

In a report, Professor Littlechild said: 'There are inevitable fears and suspicions that plants may be closed for other motives (than economic viability), namely to reduce system availability and thereby to raise prices.'

National Power attacked the proposals. It said the continued operation of plants earmarked for closure would threaten the future of other power stations. However, it would consider selling still-working plants if it was in the interests of shareholders.

A spokesman said: 'Redundant plant is too expensive to keep on the system and would simply ruin whoever tried to do so.'

PowerGen, the smaller generator, said it had agreed to consider positively any sale proposals.

The generators have announced plans to shut all or part of 11 power stations at the end of March. Professor Littlechild is demanding that they are kept in operating order to give potential buyers a chance to assess them. Offer said a number of companies were interested but did not name them.