Britain's move to competitive gas supply in the residential market has taken a major step forward.
A pilot program in which about 500,000 customers in Southwest England have a choice of gas supplier got under way Apr. 29.
Government had hoped 50,000 households would buy gas from new suppliers from the outset, but initially it appeared only about 28,500 had made the move.
The program is the first stage in a plan to end British Gas plc's long monopoly on residential gas supply and give all U.K. households a choice of gas supplier starting in 1998 (OGJ, July 24, 1995, p. 12).
Industry regulator Office of Gas Supply (Ofgas) last March issued licenses for gas supply in Cornwall, Devon, and Somerset to Amerada Hess Gas (Domestic) Ltd., British Fuel (Oils) Ltd., Eastern Natural Gas (Retail) Ltd., London Total Energy Co. Ltd., Northern Electric plc, Norweb Gas Ltd., Southern & Phillips Gas Ltd., Texaco Ltd./Calor Gas Ltd., and Western Gas Ltd.
U.K. Industry & Energy Minister Tim Eggar played down the shortfall in customers transferring from British Gas, saying, "I am delighted with the take-up so far. If this level of interest is replicated when competition goes nationwide in 1998, 1.25 million consumers will change supplier on the first day."
Eggar said a further 5,000 residential customers had been registered by new suppliers in the 2 weeks before the pilot program started, and more are likely to transfer as customers become aware of the financial benefits.
He said, "New suppliers are offering 15-20% or more, or 70 ($105), off the average bill. Several companies are offering appliance servicing as well as supplying gas."
A spokesman for Transco, the supply network operating arm of British Gas, said 28,482 customers changed allegiance on the first day, and this is expected to rise to 34,373 July 1.
"This is nowhere near the aval- anche Ofgas had hoped for," said the spokesman. "There haven't been great numbers flooding to change, and a handful of customers have even rung in to say they were not aware they had changed and wanted to change back."
The spokesman said Transco's network management system has operated smoothly since the nine new suppliers began using the company's grid.
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