bruncher wrote:Hasn't the entire privatisation exercise been a waste of everyone's time? Well regulated monopolies would have saved us all this hassle.
Back twenty odd years ago I bought a house, and the house was connected to the gas mains. What I didn't know about then was 'Independent Gas Transporters' (IGTs), but I was soon about to find out fast.
Back in the early 90's the government of the time decided to introduce competition to the market to connect new homes to the gas main, rather than the house builders just pay Transco's set fees (or NationalGrid as it is now). The argument was that competition would reduce prices, and that was a 'good thing'.
Reduce prices it did, with the IGTs far undercutting Transco's fees, so far so good. But then came the next problem.
When you pay your energy supplier for gas, part of the supplier's costs are paying for the gas to be moved through the national gas grid to get to your home. With Transco the charge to move the gas hundreds of miles across the country was tiny compared to the cost of the gas itself. However with the IGTs and the last 20 feet of pipe from the street to your house; well their response was "That will be £50 a year please" to the energy supplier.
"Hang on" the government said "that isn't what we intended" - to which the response from the IGTs was "well there is nothing in the regulations you created to put a maximum on what we can charge". OK said the government, well we will put a cap on now, to which the response from the IGTs was - "if you do we will take you to court for the lost profit we will get over the next 20 years or so".
Thus for 10 years or more, before Ofgem finally fixed the problem, choosing a gas supplier was tricky because there were only two or three firms who didn't pass on the £50 charge to the consumer as a surcharge, with the rest doing so but hiding the fact they did in their small print.
