Bell takes on British Gas in interruptible market

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BELL GAS, a privately owned company, has become the first rival to British Gas in the pounds 600m interruptible gas market, in which large customers buy low-cost gas in exchange for being cut off at times of high demand from domestic consumers.

Although British Gas's share of the contract gas market has fallen to less than two thirds in recent years, it remains the only player in the lucrative interruptible sector. Rival gas suppliers, including North Sea producers, say that until they have the right to supply domestic consumers they cannot afford to offer interruptible gas.

David Aron, a director of Bell Gas, said: 'We are looking at a number of sites where we can offer lower prices than British Gas. This agreement is a landmark in the development of competition in the UK gas market.'

Supplies by Bell to the first interruptible customer, which declined to be named, begin next month. Mr Aron said Bell Gas already supplied 500 sites in the UK. Customers included British Waterways, BET and local authorities.

British Gas, which awaits the Government's response to the Monopolies and Mergers Commission report on gas, said more competition in industrial gas supply was 'good news as far as we are concerned'. However, the company is arguing that if the Government opens up the domestic gas market to early competition, many consumers could be faced with higher bills and less security of supply.

The MMC said full domestic competition should be introduced in about 10 years, but there has been lobbying for an earlier date.