Transco mains work to add £5 to gas bills

The Health and Safety Executive yesterday ordered Transco to double its mains replacement programme over the next five years in a move which will cost £2.25bn and add an estimated £5 to the average domestic gas bill.

Ofgem, the industry regulator, has pledged to take the HSE's requirements into account when it announces final price controls for Transco next week. Ofgem's draft proposals, published in the summer, suggested a 14 per cent cut in Transco's revenues, which would translate into a £15 reduction in the average bill from next April. The HSE's ruling means that the reduction in bills is likely to be closer to £10.

About 40 per cent of Britain's gas network is made up of cast iron and ductile iron pipework, some of it more than 100 years old. The HSE said its accelerated replacement programme would mean 91,000km (57,000 miles) of iron pipework within 30m of buildings being replaced over the next 30 years – five years earlier than under the existing timetable. Transco is replacing cast iron mains at a rate of 1,840km a year but the HSE said it had agreed to increase this is 3,580km a year.