Ofgas told to delay new trials

An internal report commissioned by Ofgas, the gas industry watchdog, has suggested delaying the second set of trials of domestic competition which are planned to start in the new year. The suggestion partly backs concerns expressed by British Gas.

The study by accountants Deloitte Touche, which will be discussed by an industry working group at Ofgas headquarters today, is understood to call for a three-week delay to the trials to reduce the risk of disruption for customers who switch to another supplier from British Gas.

Ofgas had provisionally said the extension of domestic competition should begin on 13 January for customers in Dorset and the former counties of Avon, and on 7 February for households in Kent and East and West Sussex. Full competition across the rest of Britain is planned to begin by 1998.

Today's meeting, which will be attended by most suppliers including British Gas and by the Gas Consumers Council, will decide whether the industry can stick to this timetable.

The final decision on starting dates will be announced by Clare Spottiswoode, the regulator, at a competition roadshow on Tuesday.

In the first phase of competition, currently under way in the South-west of England, many customers were wrongly overcharged in their final bills from British Gas because of computer errors.

Some had hundreds of pounds accidentally debited from their bank accounts and subsequently received letters on behalf of British Gas from a debt collection agency.

TransCo, the British Gas pipeline business, has consistently warned against an early start to the second phase of competition on the more disturbing grounds that it could put the safety of the pipeline network at risk.

A recent letter by TransCo's managing director, Harry Moulson, to Ms Spottiswoode claimed that starting phase two from January could result in an emergency.

However, although the Deloitte Touche report recommends a short delay on technical grounds it is thought to have rejected the British Gas argument that the trials should be phased in from next April. Independent gas suppliers insisted yesterday that the report amounted to a "green light" for an early start.

Since the first phase began in Devon, Cornwall and Somerset in May, 72,500 customers have so far switched from British Gas, or just under 15 per cent of the 500,000 households taking part. The local electricity supplier, Sweb, is thought to have signed up the most customers, though Calortex, a joint venture between Calor and Texaco, is a close second.