Hospitals face more gas cuts

Some of Britain's largest NHS hospitals are facing another week of gas cuts after unprecedented demand brought on by the cold weather forced TransCo, the distribution arm of British Gas, to shut off supplies to all customers south of Birmingham with "interruptible" contracts.

Customers on such contracts include 120 NHS hospitals. Around a third of them - inclu-ding large London hospitals such as Guys and Kings College, and Princess Margaret's in Swindon - have been operating on emergency supplies of fuel oil since TransCo first imposed the "interruptions" to their gas supply last Thursday. TransCo said this weekend that it would interrupt supplies again in the coming week if the weather stayed cold and the expected demand from factories returning to full operation after the Christmas break materialised.

The company predicted a "record number" of interruptions this winter and reminded consumers on such contracts - which are up to 25 per cent cheaper than those that guarantee supply - that it could interrupt supplies for up to 45 days.

The affected hospitals defended the arrangements as "better value". They claimed they had between two and four weeks' supply of fuel oil on hand and that no patients would be affected. "The gas is cheaper for us and switching over is no problem," said a spokeswoman at Guys.

However, other NHS trusts were less prepared. A spokesman for Dumfries Hospital, which has so far not had its gas supplies interrupted, admitted that the trust had only 10 days' worth of oil. The NHS Supplies Authority explained that there are no statutory regulations to compel hospitals to hold set amounts of alternative fuel as a back-up to interruptible gas supplies.

Last year, several gas customers refused to interrupt their supplies during high gas demand, claiming they were unprepared. TransCo said it might attempt to have any future such refusals treated as a criminal offence.

Industry observers noted that this winter would be the first real test of these contracts, over half of which have been signed with independent suppliers since the commercial gas market was liberalised in 1995. "A lot of people have been sold interruptible gas contracts on the assumption that they will never be cut off, only to discover that they were unprepared for the consequences," said one analyst.

The analyst added that the high spot prices in the fuel oil market during the winter would land hospitals with a large bill at a time when their budgets are almost exhausted. Statistics to be released by the Labour Party tomorrow will show that the deficit run by local health authorities in England rose to pounds 137m in the second quarter of last year. This week many hospitals reported that they were unable to make beds available for emergency patients because of lack of money.

Labour's consumer affairs spokesman, Nigel Griffiths, who has been leading a campaign against interruptible contracts in the NHS, said the higher cost of bringing in fuel oil would be a damaging financial burden. "Interruptible contracts are inappropriate for many hospitals, and ministers should never have let the NHS go down this risky road," he said.

The gas cuts follow a statement by TransCo in late November to NHS trust customers warning that supplies would definitely face interruptions over the winter because of huge demands, estimated to be 6 per cent higher this winter than over the same period last year.

TransCo this week said it was expecting to sever supplies to up to six gas-fired power stations in an attempt to rebalance the system and keep gas flowing to domestic customers. A gas-fired power station uses up to 5 million cubic metres of gas a day - the equivalent of 2,100 terraced houses.

Despite meetings during 1996 between officials of TransCo and the National Grid to hammer out an agreement to maintain electricity supplies when gas - and electricity - demand is at its highest, the Grid has been unable to get TransCo to agree to maintain supplies to power stations.

Observers believe matters will come to a head this week or next, as power consumption reaches its annual peak. This may result in extensive power cuts to homes - not seen since the miners' strikes of the 1970s.