MPs want generators to pay more for coal

MPs want generators to pay more for coal
Simon McGee, Political Editor

YORKSHIRE MPs will today call on electricity giants to plough some of their "huge profits" back into paying a fair price for domestic coal and help to secure what remains of Britain's coal mining industry.

Selby Labour MP John Grogan will lay down a motion in the Commons warning that the viability of British coal production is being jeopardised because energy companies are paying below market prices for it.

The motion will stress that power generators EDF Energy, EON, and Drax Power Plc – owner of the Drax Power station at Selby – comprise 86 per cent of UK Coal's business and that they are benefiting from the fact that prices were artificially low when they signed contacts to buy coal from UK Coal.

MPs will call on the companies "to act now and reassess the price they pay for coal mined in the UK in the light of international prices and import capacity constraints".
Mr Grogan said the "knock down prices" meant UK Coal could not invest sufficiently in its six remaining collieries – three of which are in Yorkshire – and he wanted the motion to spur the Government into acting as an intermediary to "bang heads together" over payment.
He stressed that while UK Coal tried to cope with low prices, domestic energy prices had risen by 36 per cent between spring 2003 and September 2006, "generating huge profits for the power companies".

In 2005, EDF Energy made a 14 per cent profit on revenue, while Drax declared profits of £355m, delivering a 39 per cent profit on revenue.
"Paying a fair price to UK Coal is a sensible business decision as it will allow UK Coal to invest in new domestic production which will secure a flexible, local, energy source in the UK," he said.
If UK Coal went under, foreign coal suppliers would have UK electricity generators over a barrel, he said.

MPs backing the motion include Barnsley West and Penistone MP Mick Clapham. It will ask Ministers to bring electricity generators together with UK Coal to discuss possible renegotiation of existing contracts.

Yorkshire Post