LONDON (Reuters) - Britain’s Conservative Party will introduce legislation to support shale energy development and impose a household energy tariff cap if it is re-elected in June, its election policy document showed on Thursday.
The Conservative government pledged last month to cap standard variable tariffs, responding to voter discontent about energy bills which have doubled in the past decade.
“We will introduce a safeguard tariff cap that will extend the price protection currently in place for some vulnerable customers to more customers on the poorest value tariffs,” the document said, without saying how many customers would benefit.
The Conservatives would also consider whether to extend the cap to very small businesses, the document added.
Energy firms say higher prices reflect increased wholesale costs and environmental levies. Utilities such as Scottish Power and SSE have said a price cap could harm competition and should only be set for a limited period.
Analysts at Jefferies investment bank said the move would likely involve extending a cap that now covers users of domestic prepayment meters to include other customers. It said the impact on energy firms might not as big as initially thought.
The policy document also said the Conservatives would commission an independent review into the cost of energy, making recommendations to keep costs low and ensure reliable supplies.
If re-elected, the Conservatives would also continue to develop the shale energy industry in Britain and change planning laws for shale applications, the document said.
The shale gas industry is still in its infancy in Britain due to regulatory hurdles and public protests. Environmental groups are concerned fracking could contaminate groundwater and say it is incompatible with fighting climate change.
A planned shale wealth fund would be changed so a greater percentage of tax revenues from shale gas benefited communities around the extraction sites, the document said.
“Where communities decide that it is right for them, we will allow payments to be made directly to local people themselves. A significant share of the remaining tax revenues will be invested for the benefit of the country at large,” it added.
A new shale environment regulator would be set up to deal with functions now handled by the Health and Safety Executive, the Environment Agency and the Department for Business and Energy and Industrial Strategy.
Reporting by Nina Chestney; Editing by Edmund Blair