LETTER : Contracts crucial to competitive gas
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.Sir: Lord Gillford (Letters, 27 February) is swift to attack British Gas over "take or pay" contracts. Ninety-eight per cent of contracts were signed before the Government decided to accelerate the development of domestic competition in December 1993. Indeed, 55 per cent of these contracts were actually signed before British Gas was privatised in 1986.
Furthermore, it was not until we had seen our market share in the commercial and industrial market eroded by 65 per cent - against an MMC target of 45 per cent - that we were allowed to compete on a fair and equal basis.
These long-term contracts are a legacy of the monopoly era when British Gas, as the licensed monopoly supplier, was legally obliged to purchase gas to meet the most demanding weather conditions. The potential liabilities arising from these long-term purchase contracts are the result of restructuring the industry in order to create a fully competitive market. British Gas has not called for an MMC inquiry into this.
If the introduction of competition into the domestic gas industry is to be a success, the issue of the long-term monopoly contracts must be addressed by the industry as a whole. It would be iniquitous for this burden to fall solely on British Gas's shareholders.
Yours faithfully,
Peter Sanguinetti
Director of Corporate Affairs
British Gas
London, SW1
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments