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Date: 27 June 2007

Energy regulator poised to discriminate against Scotland's generating industry

UNISON, the largest energy trade union in Scotland, today reacted angrily to an announcement from energy regulator Ofgem that it is thinking of approving its own proposals to introduce transmission loss charges that would discriminate against energy generation in Scotland.

UNISON Scottish Organiser Dave Watson said: "This is not the first time that Ofgem have promoted this policy. It has previously been rejected and is now being revisited under the guise of environmental benefit, but really it is simply a smokescreen for the same market fundamentalism that drives so many of Ofgem's misguided policies in the energy industry."

The plans seek to alter the rules so that the costs of transmission losses would be allocated where the loss occurred, unlike the current system where costs are allocated irrespective of where electricity enters and leaves the network (the 'postage stamp' principle).

UNISONScotland strongly believes that existing rules should be maintained and the cost of transmission losses should continue to be recovered from generators and suppliers on a uniform basis. A move away from the 'postage stamp' principle would mean discriminatory charges against generators further away from the main centres of population.

It seeks to encourage generating capacity close to urban centres that may not be best suited to take advantage of renewable and other new generating technologies.

Dave Watson said "In particular this would have a significant impact on the developing generation industry in the north of Scotland, although in general it would discriminate against Scotland and the north of England. There is strong cross-party support in Scotland for the 'postage stamp' principle, from both Scottish Labour and the Scottish National Party."

UNISON can see no new grounds for revisiting the issue of zonal transmission loss at this stage. The current system has served the industry and the UK well over many years and Ofgem has even failed to properly consider the case for the status quo.

ENDS

For Further Information Please Contact: Dave Watson (Scottish Organiser) 0845 355 0845 (w) 07958 122 409 (m) Chris Bartter (Communications Officer) 0845 355 0845(w) 0771 558 3729(m)

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