ScotPower in charges court battle

SCOTTISH POWER has landed the first punch in a legal battle that could cost nuclear generator British Energy nearly £400m.

The energy firm has taken British Energy to court, arguing that under 11-year-old post-privatisation rules it is overpaying for electricity generated by the Hunterston and Torness nuclear power plants.

Under the terms of the Nuclear Energy Agreement, Scottish Power and Scottish & Southern Energy have to take all British Energy's power produced north of the border until 2005. But since the introduction of the more competitive Neta power trading market, ScotPower, which takes 75% of the electricity, is claiming that British Energy is overcharging it via an out of date price formula.

The Edinburgh Court of Session ruled that an escrow account - held by a third party until a settlement has been made - should be set up into which Scottish Power said it will pay the £6m a month it believes it is overpaying. It also said British Energy should put about £50m into the account backdated to the introduction of Neta in the spring. British Energy is appealing against the escrow ruling.