BG in renewed effort to delay gas competition

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The Independent Online
BG, the renamed British Gas, will lobby the Government in an attempt to delay the next stage of domestic competition, which the Conservatives had aimed to start in Scotland and the north of England in October.

The issue is understood to have already been put to the new energy minister, John Battle, before the general election and is expected to be followed up in briefings with BG over the next few weeks. BG owns the pipeline network, TransCo, and has claimed it cannot introduce complex computer systems, which track customers as they switch supplier, in the planned timescale.

The call for a delay to competition comes after BG failed to persuade Clare Spottiswoode, the gas industry regulator, to drop her plan to bring forward domestic competition with a fourth trial area this year.

The original aim had been to start the full national roll-out of competition in 1998, though the precise timing had never been clear. Ms Spottiswoode also wants national competition to start in full by next April.

Ian Lang, former President of the Board of Trade, announced the October trial area, involving some 2 million homes from Scotland down to Teeside in the North-east, as one of his last decisions at the DTI. However, he opened the issue to consultation within the gas industry.

BG has introduced new computer systems for each trial area, leaving at least 10 more to be replaced before full competition is completed. An industry source said: "The agenda has been changed half-way through by the regulator. Meeting the October deadline is not as simple as that."

The earlier trial areas, which cover about 2 million homes in the south of England, have already resulted in Centrica, the demerged BG supply operation, losing more than 200,000 customers.

Rival independent gas companies are largely in favour of a quicker national roll-out, arguing that BG has already proved its computer systems can cope with the change.

Roger Turner, former managing director of United Gas and one of the leading advocates of competition, said if the Government agreed to the delay it would send conflicting signals about its consumer-led approach to regulation.

"A delay wouldn't fit in well with Labour's commitment to ensure an open European energy market by the end of the UK's EU presidency and its aim to put the consumer first."

Mr Battle also faces calls from regional electricity companies (RECs) to delay start of power competition, due to begin from next April. One REC, which did not want to be named, wants an early meeting.