TransCo price curb urged

Industry wants Monopolies and Mergers Commission to act on gas supply costs

By Arlene Foster

The Energy Intensive Users Group (EIUG), which represents UK industry’s biggest users of energy, has written to the Monopolies and Mergers Commission (MMC) urging tougher price controls for TransCo, the monopoly gas pipeline business.

The move last week by the group, whose members include British Steel and ICI, follows the MMC’s decision to extend its inquiry into price controls until the end of May to consider new material submitted by TransCo.

Pipeline tariffs represent about 10% of EIUG members’ gas bills and industry is concerned that the MMC may make further concessions than those already suggested by Ofgas.

Last year the industry regulator changed its original price control proposals for a one-off price cut of 20-28% in 1997-98 to a reduction of just 20%. `We want the levels back up to 28%,’ said Lisa Walters, economic adviser to the EIUG.

This would bring industrial users’ estimated savings of £600-£40,000 and give customers the deal they deserve, she added.

`We urge the MMC to seta challenging target for TransCo and will do everything in our power to ensure customers stop paying monopoly charges over the course of the next price control.’

The EIUG is also concerned that customers will end up paying the price for Labour proposals of mandatory leakage targets for privatised water companies, should the party come into power.

`While we welcome the proposals, customers fear they will have to foot the repairs bill,’ said Walters. She called for a good balance between creating a `watertight’ infrastructure and competitively-priced supplies.