Belfast Telegraph

Gas bills set to rise after ruling

Average household gas bills in Northern Ireland will increase by around £2 a year after a provisional Competition Commission (CC) ruling.

The utility regulator referred an appeal by Phoenix Natural Gas Ltd (PNGL) to the Commission in March following the company's decision to reject its two-year price control determination covering 2012 and 2013.

The company is the owner and operator of the natural gas distribution network in the Greater Belfast area and Larne.

The utility regulator's original proposed changes would have reduced household bills by £10.

Chairman of the Phoenix Inquiry Group and CC deputy chairman Professor Martin Cave said: "Our decision has been guided by the long-term interests of customers, who would benefit from further expansion of the gas network in Northern Ireland.

"By trying to change elements of the price control which PNGL had valid cause to believe had been previously agreed, the utility regulator's proposals risk damaging confidence in the regulatory system which in turn could inhibit future investment. It could also increase PNGL's costs in the long run due to higher costs it may face in financing its activities; this would in turn be reflected in customer bills.

"Such investment is particularly important to fund any future expansion of the gas network in Northern Ireland, where the majority of customers use oil rather than gas, even though it is far more expensive."

A typical household converting from oil to gas can save £1,000 a year.

A Phoenix spokesman said: "We will continue to engage fully with the Competition Commission leading up to publication of their final decision paper in the autumn to ensure the best possible outcome for all stakeholders in the natural gas industry in Northern Ireland in the longer term.

"Phoenix believes that the Competition Commission's involvement in this process will lead to a more stable regulatory environment for Northern Ireland, which will benefit consumers and investors alike."

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