House of Commons Paper Ser.

This NAO report examines the effects of the introduction of NETA to the supply of electricity to consumers. OFGEM, the gas and Electricity Markets Authority are a non-ministerial government department. Their primary statutory objective is to protect the interests of the consumer. The restructuring and subsequent privatisation of the electricity industry in 1990, led to a "pool" of suppliers. The trading arrangements between the suppliers were criticised which in turn led to the implementation in England and Wales of a series of reforms known as NETA - New Electricity Trading Arrangements. NETA was set in place to encourage greater competition between the generator and supply businesses. These new arrangements were introduced in March 2001 at a cost of £39million. Amongst a number of findings and recommendations are: that NETA has reduced wholesale prices by about 20%; that a more competitive market now exists, and the electricity market now resembles other supplier markets; prices paid by industrial and commercial customers have fallen sharply, but for domestic consumers, prices have not fallen so much, though changing supplier can help reduce bills; that the fall in wholesale prices has contributed to the financial difficulties faced by some supplier companies.