Power deregulation faces new setback

The opening of the domestic electricity market to competition has hit a further setback with another two regional suppliers warning they would not meet next April's deadline.

East Midlands Electricity and London Electricity have told the industry regulator, Offer, they may not be ready to launch competition in their areas until September of next year. This brings to three the number of suppliers having difficulties adapting their computer systems. The other company is Southern Electric.

News of the latest hold-up came as Offer published a report by its advisers, PA Consulting, warning the overall timetable for liberalisation remained tight and any late changes to the systems being introduced would result in significant delays.

The aim is to start allowing Britain's 22 million domestic electricity customers to shop around for supplies from next spring. The first four suppliers which expect to be ready are Eastern, Manweb, Seeboard and Yorkshire. However, the cost and complexity of installing the computer systems that will allow suppliers to talk with one another, new entrants and the electricity pool is causing increased worries.

A spokeswoman for Offer said that if detailed design requirements changed it could have a significant impact on the overall programme.

Professor Stephen Littlechild, the head of Offer, warned that with just over six months to go, much still remained to be done, although he welcomed the progress made so far.

Offer has written to East Midlands and London and asked what they are doing to bring themselves back on line.

Earlier this week Midlands Electricity confirmed it had abandoned a multi-million pound computer system after concluding that it would not be ready in time for next April.

The industry estimates the project will cost it pounds 850m but Professor Littlechild is only allowing it to pass pounds 500m of costs on to consumers.

-Michael Harrison