Response to the DETI’s Consultation on
“Gas Bill – Policy Consultation”
Ref: PD 2009 0300
August 2009
1. Introduction
1.1
The Consumer Council welcomes the opportunity to respond to the
Department for Enterprise, Trade and Investment’s Gas Bill
consultation. We welcome this review of the Gas (Northern Ireland)
Order 1996 as it provides an opportunity to provide additional
protection for natural gas consumers.
1.2
The Consumer Council’s role is to give consumers a voice - and to
make sure that voice is heard by those who make decisions that affect
consumers. A Non-Departmental Public Body, the Consumer Council
was set up by statute in 1985 to promote and safeguard the interests of
all consumers in Northern Ireland.
1.3
The Consumer Council has certain specific responsibilities for energy,
passenger transport, food, and water.
1.4
A key feature of the Consumer Council’s work is the need to carry out
research to determine consumer concerns and to campaign for the
best possible standards of service and protection. The Consumer
Council has a major role to play in educating consumers so that they
will have the skills and confidence to meet future challenges.
2.0
Executive Summary
2.1
The Consumer Council is supportive of all the proposals outlined under
this consultation document.
2.2
We acknowledge that these proposals are either formalising existing
arrangements, particularly regarding meter stamping and gas safety, or
providing additional protection for Northern Ireland consumers, in
respect to special administration and guaranteed service standards.
2.3
We support the proposal of rights of access, however urge companies
to act responsibly when exercising this additional power and to ensure,
as far as is possible, that meter tampering has occurred before gaining
access.
2.4
We seek assurances that consumers will be no worse off following the
implementation of any of these proposals, in particular the proposal to
introduce deemed contracts. Our view is that those consumers on
deemed contracts should not be charged any more than the supplier’s
published tariff.
2.5
As the legislative timescale for the amendment to the Gas (Northern
Ireland) Order 1996 means it is unlikely to be operation until June
2011, we urge suppliers to voluntarily implement measures which will
provide more protection for consumers as soon as possible.
Particularly, we believe guaranteed standards of service could be
implemented by gas companies sooner than the legislative timescale.
3.0
Extension of the powers of access
3.1
The Consumer Council recognises that the Gas (Northern Ireland)
Order 1996 does not allow gas licence holders access to their meter
unless they have reasonable cause to suspect there may be a danger
to life or property. We realise that this is not in line with existing
legislation in respect to electricity meters. Therefore we are supportive
of DETI’s proposal to allow licence holders the right to enter premises if
they suspect gas meters or fittings are being tampered with.
3.2
The Consumer Council is strongly against the practice of meter
tampering. Our main concern is safety and ultimately meter tampering
is dangerous, not only for the household but for the community as a
whole. Secondary, we also realise that all consumers pay for any loss
of revenue associated with the practice of meter tampering. It is
estimated that this practice costs the consumer £1m per year and we
support any reasonable measures to stop this practice.
3.3
That said, we urge licence holders to act in a reasonable and fair
manner. DETI’s proposal will allow licence holders access to meters on
the suspicion of meter tampering. As safety is our main priority we
support this practice, however customers should not be left without a
supply of gas until such times as it has been proven that meter
tampering has occurred. We would expect all licence holders to take a
responsible and considered approach and have due regard for the
sensitivities during the period of investigation. Further, licence holders
must not abuse their position and must demonstrate reasonable
assurance of meter tampering before gaining access to meters.
3.4
We support DETI’s proposal to make certain gas equipment exempt
from judgement and bankruptcy processes.
4.0 Guaranteed Gas Standards of Performance
4.1
The Consumer Council has long called for the inclusion of guaranteed
standards of performance (GSS) for gas, to afford consumers the
similar levels of standards as electricity consumers. We consider this
proposal long overdue.
4.2
We urge all gas companies to implement GSS on a voluntary basis to
address the inequality between electricity and gas consumers more
quickly than the legislative timescale.
4.3
We look forward to working with the Northern Ireland Authority for
Utility Regulation (NIAUR) in relation to developing the standards of
performance. Indeed, we have already considered areas which we
believe should be covered by GSS and have previously shared these
with both NIAUR and DETI.
4.4
GSS act as a driver for gas companies to improve standards and
enhance the service delivered to consumers. Therefore they should be
sufficiently challenging. Our main interest is in improving the service
consumers receive, however where the gas company does not meet
the standard we believe the company should pay compensation to the
customer. The overarching principle of GSS is not to ensure the
consumer receives compensation for poor service but rather to
incentive the company to deliver high standards.
4.5
We strongly advocate that the compensation payments awarded to
consumers for failed delivery must come from the profits of the gas
company. We believe it perverse that any money paid to consumers as
a result of a failed service delivery should be recovered from all
consumers. This would negate any incentive on companies to deliver
high standards if the companies were simply allowed to pass on any
additional cost to their customer base.
4.6
In our view, a financial penalty is the main incentive for any company to
improve service delivery and do not believe any other measure will
achieve this.
5.0 Special Administration Regime for Electricity and Gas
5.1
The Consumer Council supports DETI’s proposal to implement a
special administration regime in the event of a network company
becoming insolvent, to ensure continuity of supply is maintained for
both electricity and gas consumers.
5.2
The Consumer Council queries whether the Gas (NI) Order 1996 is the
most suitable legislation for this condition, given the proposal covers
both gas and electricity. We note that a similar condition exists within
the Water and Sewerage Services (Northern Ireland) Order 2006 and
suggest that an amendment to the Energy (Northern Ireland) Order
2003 would be more appropriate.
6.0 Gas Meter (Testing and Stamping)
6.1
The Consumer Council has no objection to DETI’s proposal to amend
the legislation to give NIAUR delegation powers in respect to testing
and stamping gas meters.
6.2
However, we do not believe that the responsibility of meter testing
should reside within the gas industry, especially in cases of a meter
dispute. We would recommend the delegation by NIAUR to an
appropriate independent body for verification and testing, and for
NIAUR to choose the most cost effective option when considering this
appointment.
7.0 Deemed Contracts
7.1
The Consumer Council recognises that the proposal to implement
deemed contracts to the Gas (Northern Ireland) Order 1996 will bring
it in line with corresponding legislation in electricity.
7.2
We accept that deemed contracts will provide both the gas consumer
and the gas industry additional protection in the scenario where a
contract has not been explicitly between the customer and supplier
agreed but gas has been used.
7.3
Whilst we recognise that the purpose of this consultation is to
implement the legislation for deemed contracts and that the NIAUR will
create the appropriate licence conditions, nevertheless we wish the
following to be taken into consideration:

Customers on deemed contracts will be charged the published
tariff;

Customers on deemed contracts should not be restricted in a
competitive market and must be free to shop around;

Domestic customers on deemed contracts should not be prevented
from switching supplier if they are in debt, in the way domestic
contracted customers are not;

Customers on deemed contracts should be provided with a copy of
the deemed contract, on their request. Suppliers should also make
available a copy of the deemed contract on their website;

Deemed contracts should be developed in consultation with the
Consumer Council.
8.0 Gas Safety Management
8.1
The Consumer Council supports the existence of a single telephone
contact for gas emergencies.
8.2
We agree the responsibility to provide a single telephone contact for
gas emergencies should be shared by all gas licence holders. We
accept that this should not solely be the responsibility of Phoenix
Natural Gas. We would like to acknowledge that the proposal to reflect
this is the legislation is only formalising current industry practice where
responsibility is shared.
9.0
Gas Storage
9.1
The Consumer Council is aware that legislation is already in place
requiring companies to apply for a licence to build or operate natural
gas storage facilities.
9.2
As the proposal outlined in this consultation is to clarify the conditions
in relation to third party access to off shore gas, a requirement under
EU Directive 2003/55/EC, we accept that this amendment in
necessary to the Gas (Northern Ireland) Order 1996.
9.3
We will provide a response to NIAUR’s consultation on the Gas
Storage Framework, which sets out options how third party access will
be treated. We recognise that this framework is needed to assist
companies interested in developing gas storage in Northern Ireland.