Who will be able to buy gas on the open market?

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The Independent Online
Heavy users of gas, including domestic customers, can take immediate advantage of the liberalised energy market. Although it is mostly industrial customers who have started buying gas on the competitive market, so, too, can those householders with very large properties that consume over 2,500 therms a year - roughly a pounds 1,100 annual gas bill.

Others, such as flat owners, will have to wait until the gas supply market opens up further.

TransCo, the gas pipeline division of British Gas, says that group buying is not permitted unless the properties can be regarded as a single unit, according to a test established by the High Court. The properties must share the same practical boundary; the occupants must be dependent on one another; and there must be common use of the property.

According to this test, related infant and junior schools can jointly buy gas, but neighbouring homes cannot. Flats may be able to, but that may depend on exact circumstances. TransCo will decide on this, and can send a representative to visit properties to make a judgement. If properties can be grouped together, they may able to buy gas on the competitive market at 20 per cent less than standard British Gas prices, but will have to pay extra costs for servicing separate meters.

It is harder to buy electricity on the open market prior to liberalisation. The open-market threshold is 100 kilowatts, about pounds 12,000 a year, to a single premises. Only in 1998 will it be possible for homeowners to join forces, apply for a second-tier supply licence and negotiate a bulk-buying discount.

Groups of homeowners would probably get around 5 per cent discounts compared with the standard price of a regional electricity company. Those who buy collectively need to recognise the problems in collecting payments from other participants. The biggest potential would be in blocks of flats where management agents are already used for maintenance

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