In Scotland there are three main electricity companies: Scottish Power, Hydro Electric, and Scottish Nuclear.1 Scottish Power and Hydro Electric are integrated companies supplying generation, transmission, distribution, and marketing services. Scottish Nuclear is the Scottish subsidiary of British Energy. Although Scottish Power and Hydro Electric are vertically integrated, the privatized companies are required to operate each of their different segments independently with no cross subsidization.
A representative of OFFER -- the British Office of Electricity Regulation -- serves as regulator to the Scottish Electric system and a productivity/performance-based price cap is applied to all segments of the industry.
Northern Ireland operates its newly-privatized electricity industry in a manner similar to the manner in which Scotland operates its electricity industry. Prior to privatization, the vertically-integrated national utility company, Northern Ireland Electricity, provided generation, transmission, and distribution services. During the privatization of Northern Ireland Electricity, the company's four generation units were separately sold off to private energy companies and to employees. The remaining transmission and distribution portion of Northern Ireland Electricity was sold to shareholders intact in 1993. The regulator in Northern Ireland (OFREG) is similar to OFFER. The OFREG regulates generation by using a merit order dispatch operation, where system marginal price becomes the price of the most expensive unit needed to be brought on line in order to meet demand. At the present, the creation of an electricity pool is being considered.
File last modified: October 19, 1997
URL: www.eia.doe.gov/emeu/pgem/electric/ch2_box2.html