BG and Ofgas at odds over MMC delay
Ofgas said the MMC's report, which had been due to be handed over on 14 April, would not now be passed across until 31 May. It confirms indications last week of delays to the investigation, which were fuelled when Clare Spottiswoode, the regulator, was called to an additional hearing before the MMC's panel on Tuesday.
The MMC began its inquiry last October after British Gas, since renamed BG, rejected Ms Spottiswoode's proposals to cut about pounds 30 off average gas bills from this month. According to BG this would slash TransCo's revenues by at least pounds 400m a year. The company has warned it would have to make up to half TransCo's 20,000 workforce redundant and might not be able to pay dividends if the plans went through.
The delay suggests the report is unlikely to be published until the middle of June. It also means the decisions about implementing the MMC's findings could be one of the first tasks for a newly elected Labour government.
Last night Ofgas and BG disagreed about the reasons for the delay. Ofgas said it had agreed to the MMC's request to extend the investigation after the panel had received "extensive new information" which it needed to consider. An Ofgas spokesman added: "The new material has come from the two sides, both British Gas and ourselves. It's not just us."
Minutes later, however, BG emphatically denied that it had provided the MMC with any new material. "We are not going to comment on individual areas but if there was late information provided it was not by BG," said a spokesman. When questioned about the discrepancy, Ofgas said it stood by its earlier comments.
There was no indication about the precise nature of the new material. The crucial argument is over the size of TransCo's asset base for regulatory purposes and the scale of depreciation charges.
BG shares, which rose on the rumours last week, slipped 3p yesterday to 176p.
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