Herbert Smith wins electricity contract

City firm Herbert Smith has won the contract against two other firms to advise the 14 electricity companies of England, Wales and Scotland on implementing full competition in 19 months time.

Business customers of the privatised electricity companies are already able to choose their supplier, but from 1 April 1998 all 23 million individual customers must be given the same choice.

Herbert Smith energy partner Mark Newbery, who will lead the team, said: “Immensely complex contracts need to be drawn up and we have a pretty tight timetable. Most of the work will have to be done before Christmas.”

Herbert Smith advised the 12 Regional Electricity Companies on their initial privatisation and handled many of the REC takeovers. It also advised the companies on opening up to limited competition in 1994 when they had to allow businesses which consumed over 100KW to choose their supplier.

Newbery and his team, including partners Adrian Clough and Elizabeth Mc-Knight, will help the companies draft a new competitive supply code and a code of conduct.

The RECs trade electricity through a pool, which sells it on to individual customers. Slaughter and May acts for the pool.

Newbery said he hoped several lessons had been learnt since the 12 RECs were opened to limited competition in 1994.

“People changed their minds about what they wanted after the codes had been drawn up,” he said, and “there was some uncertainty, after people had chosen their supplier, how much they were going to pay.”