Transco warns over pace of gas competition

More than 1 million homes have so far switched from British Gas to new suppliers as the domestic market moves to towards full competition, the gas watchdog Ofgas revealed yesterday.

But as Ofgas released the figures, Transco, the pipeline network, warned of "critical" risks to Ofgas's accelerated timetable to complete the roll- out of domestic competition.

Clare Spottiswoode, the industry regulator, said the customers numbers were "an important milestone," with almost one in four homes abandoning British Gas in areas where competition has been introduced. The figures included 956,800 customers who had already switched to alternative independent gas companies, along with more than 40,000 others who were waiting for Transco to process the move.

The roll-out began with trials in South-west England in Spring 1996 and has spread to Avon, Dorset, Kent and Sussex. Around a further 2 million consumers in Scotland and the north-east of England were able to choose their gas supplier last November. Ofgas said another 400,000 households had signed up with a new supplier in the next competitive area, which covers 2.8 million homes in Greater Manchester and North Yorkshire and goes live on 27 February.

However the headline statistics hide marked regional differences in the willingness of customers to abandon British Gas. In Scotland and the North- east, where just over 400,000 homes have switched from British Gas, rival suppliers were surprised by the slower than expected switch rate. Transco's intensified warning about the pace of competition reflected Ofgas's decision to open the final two areas of the market over a 48 hour period. Choice will be extended to 3.1 million homes stretching from East Anglia to Hampshire on 22 May, with the final 3.2 million customers in Greater London and Surrey included on the following day. There was originally a four week gap between the two regions in the previous timetable.

Transco, which is building new computer systems to track customers, said there remained "a high probability that errors will occur which will require immediate action to remedy". The pipeline operator said the roll-out was also critically dependent on new suppliers' ability to cope with demand.