Regulator decides against wider probe into TransCo

OFGAS, the gas regulator, has decided not to broaden the terms of its reference to the Monopolies and Mergers Commission into British Gas's pipeline business.

The terms will be passed to the MMC on Monday morning, with an announcement set for 11am. Sources close to the inquiry say any widening beyond tariff issues is unlikely. Clare Spottiswoode, the head of Ofgas, had warned she would consider including an examination of the structure of TransCo, the pipeline business.

Such a move could have had serious ramifications for the demerger of British Gas, which is due to go ahead in 1997 with separate trading - when the domestic gas supply business will be cut off from the distribution and exploration and production operations. The argument from Ofgas was that excess profits by TransCo should not be used to subsidise its exploration arm.

On Friday, there was a last-minute scramble by British Gas to have sight of the draft terms, before they were sent to the MMC.

The regulator can allow a company to see a draft before it goes to the MMC, and the company can request last-minute changes. However, a request from British Gas to see the draft, immediately after its decision to seek a Monopolies referral two weeks ago, met with an ambiguous response from Ofgas on Friday morning.

British Gas then faxed another request for sight of the draft, and was still awaiting a response at the close of business on Friday evening.

Deputy chairman Philip Rogerson, who has handled the company's dealings with Ofgas, said he was disappointed not to have had the option to suggest changes. "Clearly it would have been a courtesy to have seen the terms, before they were sent to the MMC."

It was customary, although not obligatory, he said, for the regulator to share the terms with an utility before sending them to the MMC.

The news that TransCo's structure will not figure as a separate issue will be a relief to investors. "We are already punch drunk over the events of the last six months," said one analyst. "It's better [the structure of] TransCo isn't part of the investigation."

Mr Rogerson added that the precedent of the 1993 referral meant the MMC would be unlikely to enforce any changes to the current structure.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
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: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

No grace of God for Katy Perry as sisters act to stop her buying convent

Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

Something wicked?

Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
10 best sun creams for body

10 best sun creams for body

Make sure you’re protected from head to toe in the heatwave
Wimbledon 2015: Nick Bollettieri - Milos Raonic has ability to get to the top but he must learn to handle pressure in big games

Nick Bollettieri's Wimbledon files

Milos Raonic has ability to get to the top but he must learn to handle pressure in big games