These systems allow the power companies to set prices in a fairly rigid way.But as power companies found in California, in fragmented markets, with many players, prices are volatile and competition makes it hard to pass costs on to customers. It stops making economic sense for the companies to build more generating stations, and capacity is further tightened.The biggest problem is the domestic sector. Domestic meters are only read periodically, yet the costs of production vary every half-hour. “Therefore,” says the report, “the belief that the market will provide is not based on firm ground since markets depend on price signals, and those signals are denied to a large proportion, 40 per cent or more, of demand. Thus, in fragmented markets, increasing demand will lead to higher prices, and instead of a demand response bringing the market into balance, the lights will go out.”.

The Financial Services Authority (FSA), which came under fire last week for its handling of the Equitable Life collapse, has denied that investors could lose out because of the problems of Sun Life Financial of Canada (SLFoC). The Financial Services Authority (FSA), which came under fire last week for its handling of the Equitable Life collapse, has denied that investors could lose out because of the problems of Sun Life Financial of Canada (SLFoC).
SLFoC will close its doors to new business from the end of this month. The decision follows the life company’s announcement last Thursday that it will axe 1,700 jobs within two years.Coming just two months after Equitable Life closed to new business, the news has fuelled fears that another controversy is about to break. However, both SLFoC and the FSA are assuring policyholders that there is no need to panic.”Sun Life of Canada’s announcement shouldn’t make a blind bit of difference to existing customers,” said a spokesman for the FSA. “The responsibility to existing business is unchanged.”The job losses have been caused by the insurer’s decision to close its direct sales force in the UK, which was responsible for new business. The redundancies will see the number of employees in the UK slashed from 2,000 to 300.The group’s announcement came two days after the Prudential said it was cutting 2,000 jobs in its direct sales force, bringing into question the future of direct sales in the UK.

Speculators have cited Britannic Assurance, which has a sales force of about 1,500, as among those companies that may also be forced to cut jobs.Zurich Financial Services, which owns Allied Dunbar, and the Co-operative Insurance Society have also been mentioned, although both remain committed to face-to-face advice Zurich has the largest direct sales force, of around 4,700 CIS has 4,500 advisers.. Tesco, Britain’s biggest supermarket chain, has launched another supermarket price war, wiping a further £70m off its prices in a move aimed at putting pressure on rivals Asda, J Sainsbury and Safeway. Tesco, Britain’s biggest supermarket chain, has launched another supermarket price war, wiping a further £70m off its prices in a move aimed at putting pressure on rivals Asda, J Sainsbury and Safeway.
The reductions, which are based on a survey of 2,000 Tesco shoppers, are targeted at its most cost-conscious customers. The company claims that a thrifty family from Southampton, for example, which shops for bargains, will save 40.6 per cent on its weekly bill as a result of the cuts. However, the changes are designed to benefit as many Tesco customers as possible, regardless of their preferences.John Gildersleeve, Tesco’s commercial and trading director, said: “Customers have told us how they want prices to get lower, and we’ve listened carefully. Targeting our reductions in the areas they want has enabled Tesco to cut prices more effectively – and in key areas – providing families and shoppers with greater value than ever before.”The latest cuts are the third major salvo in 12 months and bring the accumulated savings announced by Tesco since the beginning of last year to £431m, the company says.