British Energy to accept lower nuclear prices
Date: 17-Jul-02
Country: UK
The company said it had reached an out-of-court settlement that would bring the premium paid by Scottish Power Plc and Scottish & Southern Energy over the normal market price for electricity down to something "much more closely linked to market prices".
The company did not say how much the settlement would cost it and could not be immediately reached for comment.
Scottish Power last December took British Energy to court over the Nuclear Energy Agreement (NEA), a price arrangement put in place on privatisation of the nuclear industry in 1996 that provides for the sale of all British Energy's nuclear output to the two Scottish electricity suppliers until 2005.
Scottish Power had argued that the development of competition in UK power markets and sharp falls in wholesale electricity prices rendered the agreement unfair.
Scottish Power, which takes about 75 percent of the power British Energy produces under the NEA, said it was pleased with the settlement but would not estimate its financial impact.
According to industry estimates, Scottish Power's payments to British Energy could be cut to about 20 million pounds a year from 60 million pounds.
SSE, which picks up the remaining 25 percent of British Energy's NEA power, said it would pass on the reduction to its Scottish Hydro customers, cutting the standard electricity bill by 10 pounds a year or four percent.
Scottish Power said it had been absorbing the excess costs on behalf of its customers for some time.
