§ Lord Lairdasked Her Majesty's Government:
Whether they have calculated the negative impact on Northern Ireland consumers and business of the gas transportation tariffs in the United Kingdom. [HL1331]
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)Gas is supplied to Northern Ireland under a commercial contract between Centrica plc and Phoenix Natural Gas plc, the main gas supplier in Northern Ireland. This contract is a matter for the parties involved.
Gas transportation charges in Great Britain are levied by Transco and regulated by Ofgem, the independent regulator through Transco's price control. Centrica has to pay transportation charges on the national transmission system to ship gas to Northern Ireland and I understand that it prices the level of these charges into the prices it charges customers, including Phoenix.
The extent to which Centrica's transportation charges are passed through to Phoenix is a commercial matter between Phoenix and Centrica.
§ Lord Lairdasked Her Majesty's Government:
Whether, with respect to Northern Ireland, they will refer Centrica plc and its implementation of the gas transportation tariffs in the United Kingdom to Ofgem. [HL1332]
§ Lord Sainsbury of TurvilleI believe the noble Lord is alluding to the contract under which Centrica plc ships gas through the national transmission system and on through the Scotland-Northern Ireland interconnect or for Phoenix Natural Gas plc, the main supplier in Northern Ireland. This contract is a commercial matter between the two parties.
The price at which Centrica sells gas to Pheonix comprises energy charges and transportation charges. I understand that Phoenix has raised concerns regarding the level of transportation charges levied through its contract. These transportation charges are levied on Centrica and other shippers by Transco and regulated by Ofgem. Centrica prices the level of these charges into its gas contracts with customers, including Phoenix.
If Phoenix believes that its contract with Centrica is no longer commercially favourable, it will no doubt give consideration to any options it may have to reviewing these arrangements.