City cheers MMC verdict on British Gas: Rivals say timetable for competition is too slow
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Your support makes all the difference.RIVAL gas companies broadly welcomed the MMC's proposals but complained that most domestic consumers would have to take their supplies from British Gas for the rest of the decade.
Competitors are thought to account for 10 per cent of the gas flowing through British Gas pipelines and are frustrated that they can target only larger consumers. Although they will benefit from the proposal to have the pipeline system that they use separated from British Gas's own gas supply operation, they are frustrated at the MMC's timetable for further competition.
Total Gas, a joint venture between London Electricity and Total Gas, said: 'We believe customers should be able to benefit from choice as soon as possible. We look forward to early action from the Government to open the way for competition in the market.'
Roger Turner, the managing director of UtiliCorp - which has joint supply ventures with six regional electricity firms, said that the report was 'frankly disappointing'. He said millions of consumers were losing out on the chance to see their bills cut by 10 per cent compared with British Gas prices. 'While there are a few welcome features, this report is a token gesture as far as the consumer is concerned. There is now a real danger that nine out of 10 consumers will never enjoy the benefits of cheaper prices through competition,' he said.
Western Gas, UtiliCorp's joint venture with South Western Electricity, said earlier introduction of full competition would have helped offset the impact of value-added tax on household fuel bills, due for introduction next year. Ron Whiley, managing director of Western Gas, said: 'The timescales should be brought forward to to give all customers the now undisputed benefits of competition as early as possible.'
Many UK electricity companies - generators as well as supply firms, see gas supply as a natural extension of their core operations. City analysts regard the diversification as logical for regional electricity firms as it takes advantage of the companies' links with customers, their sales and marketing skills, and existing billing systems.
Although competition is limited to larger customers at present, most fledgeling gas suppliers deny they are out to 'cherry-pick'.
Scottish Hydro-Electric, which launched a joint gas company with Marathon Gas on Monday, said that the domestic consumer was particularly important to its aspirations.
Kinetica, a joint venture between PowerGen and Conoco, said the MMC's timetable for more competition indicated it had treated 'security of supply and safety issues with perhaps too much caution'. Kinetica and the other suppliers are likely to join Ofgas in lobbying the Department of Trade and Industry to opt for a much faster track to choice for all.
(Graphs omitted)
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