Ofgas plans competitive boost
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.OFGAS, the gas industry regulator, is devising a way to introduce competition into the domestic gas market without the need for legislation, writes Mary Fagan.
The scheme, which needs government approval, involves compensating British Gas for being the only gas supplier with obligations to provide universal service and to make special arrangements for old and disabled customers.
Ofgas is worried that legislation for the introduction of competition has been squeezed out of the Parliamentary schedule for the autumn because of lack of time and the desire to privatise part of the Post Office. Unless reinstated, plans for domestic gas competition to begin in 1996 could be under threat.
The regulator's alternative would be to lower the annual consumption threshold below which British Gas's rivals may not supply gas. That threshold is an annual 2,500 therms, compared with about 300 therms for the average household.
Lowering the threshold could be done by amendments to existing legislation. But rival suppliers would not be issued with full public gas supply licences and, unlike British Gas, would not have obligations to supply the less lucrative customers. They would be free to cream off whoever they wanted as customers and would have no responsibility towards the elderly and disabled.
To offset this, Ofgas is thought to favour changes allowing British Gas's transportation arm to charge rivals more for using its pipes. The extra funds could then be transferred to British Gas's trading arm to help fund the social and universal service obligation.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments