The Pool has been heavily criticised as non-transparent and insensitive to customer needs. Following widespread calls for reform, a review of electricity wholesale trading arrangements, including the functions of the Pool, was announced by the Minister for Science, Energy and Industry, John Battle, on 23 October 1997. The electricity regulator has advised the Minister on the terms of reference for the review, and is expected to produce broad conclusions in the summer. The powers of the electricity regulator and Ministers in respect of the Pool are limited. We consider there is a strong case for the energy regulator to have greater power to effect change in the Pool, where appropriate, although it would be a significant step to impose new regulation on a commercial arrangement.
Further work is needed on the legal framework and the potential liabilities.
In principle, and subject to the outcome of the review of electricity wholesale trading arrangements, the Electricity Act should give the energy regulator greater powers to effect change in respect of these arrangements, where this is appropriate. Electricity Supply Contracts 4. Electricity customers will be free to contract with any electricity supplier once the market has opened to competition, starting in 1998. Should a supplier default, for example as a result of insolvency, there is no easy means for transferring the customers of that supplier to another supply company. In the gas market, the gas regulator is able to deem a contract between those customers and another supplier in such circumstances.