Outside the marginals

a commentary on the politics that followed the UK 2010 & 2015 elections

Power to the People (or Not)

I am currently watching Ed Davey (Energy Secretary) on the BBC News Channel pontificating about insisting that those people in the South of England who have had their electricity off since before Christmas are reconnected.

As the interviewer said “it’s just verbiage” – the Government can’t do anything because it does not control the levers of power.

The energy supply industry is fragmented (a bit like the railways) and right now the pressure is on the little known distribution companies. These private sector organisations are not customer facing – they are paid by the energy suppliers. Us customers pay the energy suppliers and have no relationship with these distribution companies.

So it is no real surprise that when the supply network takes a hit, the distribution companies struggle in communicating with the public. Hence why the public in Yalding yesterday were giving the Prime Minister a (cold) grilling. But the PM cannot do anything. These companies dance to a profit incentive not a political incentive.

In addition because these distribution companies are below the horizon they are not particularly good at managing their “public” relations. It is probable that they are working in full crisis mode and that the problems they are facing are unprecedented.

With previous storm damage to power networks we have seen “mutual aid” from other regions/companies – although in reality this has probably involved an expensive sub-contract to get teams of linesmen to travel to the opposite ends of the country to help to promptly repair other companies’ networks. It looks as if that is not happening this time. I suspect that, because the bad weather has affected practically all parts of the country,  individual distribution companies are holding on to their repair teams in case they are needed in their home patch. It being Christmas will probably also mean that the “mutual aid” subcontracts will be very expensive (double time or even triple time?). It is therefore more profitable to just have your own teams mending your own networks and that means that the job will just take as long as it takes.

Do we want an electricity supply industry that is set up primarily to make money, or one that primarily supplies electricity to consumers (households and businesses)? The actual electricity is identical irrespective of who supplies it and “exercising consumer choice” will not move you to a more reliable supplier. The supply network is essentially a monopoly national network, the idea that you can introduce competition for consumer’s businesses in such a network is a fiction. All that happens is you create a complicated structure that when stressed is either incapable of reacting or (due to cost) unwilling to react.

obiter dictum

It is interesting that the major area of disruption is in the South and involves electricity being off for a few days (admittedly important days). Would we have had similar coverage if the interruption had been in the North? Just the rantings of a “chippy Northerner”? Who remembers a few years ago when a market town in the North had its water main swept away in floods and was without mains water (to homes, schools, care homes, a hospital and businesses) for 12 days? (For those that don’t remember – or who never knew – see Government Website paper. Consumers received no compensation.)

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One thought on “Power to the People (or Not)

  1. Pingback: Is Water a Natural Monopoly? | Outside the marginals

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