About your Electricity Supply
Before the great sell-off led by the Conservative government in the 1980s, there was only one place to get your electricity from, and that was the electricity board in your region. The whole electricity business, from generating the stuff in the first place to delivering it to your meter, was in the hands of a number of organisations controlled the government. This meant that all electricity users in the United Kingdom brought their electricity from the electricity board that their supply was connected to and couldn’t buy it from anyone else.
The Conservative government elected in 1979 with Margaret Thatcher as Prime Minister had pledged to de-nationalise many of the services in the country so that government could get on with governing, rather than spending their time running what they saw as commercial enterprises. In order to do this the existing electricity boards and operating agencies were split up so that responsibilities could be divided among them.
Split Up and Privatisation
The regional boards stayed largely the same, in terms of geographical divisions, but were relieved of their duties in transporting and generating electricity. A new body, the National Grid Company (NGC), was created to run the backbone of the network such as the cables, overhead wires, pylons and distribution centres. In England and Wales the power-generating organisation of the Central Electricity Generating Board was split into various divisions to run the power stations and connect to the National Grid.
Most of this happened in 1990, although the nuclear power stations and other nuclear assets were held back from privatisation until 1996. In Scotland the separation was slightly different in that two companies were created, one in the north and one in the south, that ran all the electricity operation in their area except the nuclear assets.
This created a system whereby companies could generate power, or distribute it to homes, by linking to the core company, the NGC. The second stage of the transition was to open up the links to the NGC (deregulate) so that other companies could come in and compete with the incumbent companies.
Deregulation Allows CompetitionThis allowed both the original electricity boards, who have merged and bought each other out in the intervening years, and new companies that believe that they can offer something to the market, offer their services to any customer. In many cases the new companies are those who were already in a similar market, for example the gas companies. They were supplying a service and had the necessary selling, billing and customer service operations to move in to electricity relatively easily.
There are other new companies that have entered the market because they think they can offer something new that will encourage customers to buy from them rather than anyone else. The green or eco-friendly companies are a good example; they operate carbon-offset schemes and buy in their supplies from generating companies who are using renewable sources to make the electricity they sell.
Another example is the companies who have set up to target the commercial market, creaming off the high value customers who depend on electricity to power their factories or light their office and run their computers.