Ofgem's blunt criticism of the energy companies and market (Report, 22 March) is simply recording the failure of the privatisation of this industry, with the unintended consequences of pretend competition and impotent regulation. Although renationalisation is almost inconceivable under the coalition, central supervision may be the acceptable face of state intervention. This must mean: central planning of corporate policy, investment and capacity; reducing the absurd plethora of pricing schemes to a small number (eg 10) of mandatory national tariffs for domestic and commercial customers; banning tariffs that penalise low-usage customers by premium charging for the first tranche of consumption; and phasing in carbon pricing, initially through dealing with the low level of VAT (5%), in conjunction with statutory obligation for energy efficiency and conservation services to low-income consumers as a priority. As the procurement, production and distribution of energy is essentially monopolistic, privatisation amounts to a faux sector that functions as a marketing, advertising and sales "overhead", creating little added value for users.
Patrick Newman
Director, IT development, energywatch 2000-2002