The Monopolies and Mergers Commission has said that the two businesses should be kept apart to ensure fair play for other gas suppliers, including electricity firms and North Sea producers, that need to use the British Gas pipes.
British Gas's rivals will have to supply the gas transmission business with sensitive commercial information, including data on customers and how much gas they use. Ms McKinlay must see that British Gas's trading side does not have access to the information. She will also monitor staff movements within British Gas so that changes in personnel from one side of the business to another do not breach Chinese walls.
Ms McKinlay, 43, is highly regarded in the electricity industry. She trained as a geologist and was a civil servant until she became chief executive of the electricity trading pool when it was set up five years ago. She was a member of the electricity privatisation team at the Department of Energy in the late 1980s and worked on the restructuring of the former Central Electricity Generating Board.
She said yesterday: 'There are a lot of changes in the gas industry and I am looking forward to being involved. The developments in the market are exciting.'
Although she will be answerable to the British Gas board, she will work closely with Clare Spottiswoode, director-general of Ofgas, who attaches great importance to the compliance task.
Ms McKinlay joins British Gas at a sensitive time. The group is rapidly losing share in the contract gas market and faces the loss of its domestic monopoly. The Government wants domestic gas competition from 1996 but is uncertain how it will achieve it if there is no time for legislation in the next session of Parliament.
British Gas has warned that investment could suffer because of a new cap on how much it may charge rivals to use its pipes. The cap, the first to be imposed on the price for the pipes, will limit increases in the charges to inflation minus 5 percentage points.
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