British Gas faces price curbs

British Gas is today bracing itself for a tough price clampdown as the Government publishes the long-awaited Monopolies and Mergers Commission report on the charges its pipeline division TransCo is allowed to levy.

Unions were last night called to a meeting at BG's headquarters to be briefed on the outcome of the MMC investigation, which was prompted after the company rejected price cuts worth pounds 28 a year for domestic customers proposed by the industry regulator Clare Spottiswoode.

BG has warned that the reduction in revenues set out under the new price formula could mean 10,000 job losses from TransCo's 20,000 strong workforce and cut its cash flow by pounds 400m a year.

Details of the MMC's findings have been kept under tight wraps since its report was delivered to BG and Ofgas a fortnight ago. But the MMC is thought to have broadly backed the regulator's approach in a move which City analysts believe could still result in a reduction in bills of close to pounds 20.

BG described Ms Spottiswoode's original proposals as the "biggest smash and grab raid" in corporate history and "seizure of shareholders' funds on an unprecedented scale". The company has been in dispute with Ofgas over the value of the assets on which it can earn a return, the amount of depreciation it can charge and the amount of operating expenditure it should be allowed.

Separately yesterday it emerged that the next trial of domestic gas competition, involving 2 million homes in Scotland and the North East of England, is likely to be pushed back from October to mid-November. Ms Spottiswoode will meet independent gas suppliers in the Ofgas Domestic Competition Focus Group on Monday to tell them Transco cannot build new computer systems in time to meet the original timetable.

Ian Lang, the former President of the Board of Trade, had announced the October plan shortly before the election, moving the original target date forward from 1998. John Battle, the new industry minister, has told Ofgas he wants to stick to the October timetable but is prepared to accept a short delay to avoid damaging customer service. The regulator has apparently accepted Transco's argument, given the short time remaining for industry- wide consultation.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Operations Manager

£30000 - £38000 per annum: Recruitment Genius: They are a financial services c...

Guru Careers: Stockbroker

£Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence