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Private Sector Energy Producers

Volume 129: debated on Thursday 10 March 1988

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To ask the Secretary of State for Energy when the Government expect to resolve the difficulties in relation to establishing a rating system for private sector electricity power stations and combined heat and power producers, which will permit them to be assessed for rating on an equitable basis with power stations operated by the Central Electricty Generating Board.

[pursuant to the reply, 29 February 1988, c. 479]: The Government accept that where independent electricity generators, including operators of combined heat and power schemes, are in competition with the public electricity supply industry (esi) they should not be put at a competitive disadvantage as a result of the different methods of rating assessment. The esi has its rateable value determined by a statutory formula while the independent generator is currently assessed by conventional valuation methods. The Government accordingly have agreed in principle that private generators exporting electricity to the electricity supply distribution network should be rated on a comparable basis to the rest of the electricity supply industry.Although section 34A of the General Rates Act provides for the extension, by order, to other generators of electricity of the formula contained in schedule 7 to the General Rate Act 1967, which provides for the rating of electricity boards, that formula is not in a form which can be applied to independent electricity suppliers. The same is true of the existing formula for Scotland.The Government have recently put in hand a revaluation of all non-domestic property and as a part of this are reviewing the statutory rating formulae for England, Scotland and Wales. This review will take account of the need for a more broadly applicable basis of assessment in respect of electricity generation. The outcome of the review will be new rateable values to be brought into effect from 1 April 1990 along with the new valuation lists. At that time it is intended that any independent electricity generator or combined heat and power scheme which has the capability to export electricity to the electricity supply industry's distribution network will have its rateable value assessed on a comparable basis. While the review of formula rating is progressing it is obviously not possible to say what this basis will be.