Industry body the Gas Forum has voiced concern over the timing of new arrangements for dealing with gas theft, as well as Ofgem proposals for an incentive scheme.
The regulator proposed putting the new regime in place by the end of the year. The Gas Forum is backing the design of a new service that promises a data-driven and risk-based approach to tackling the problem.
However, the industry body said the current timeline was “challenging” because there were privacy questions, unresolved governance issues and an incomplete understanding of the costs of the service.
The forum was also worried that there was no agreement on the value of gas being stolen, with annual estimates ranging from £60 million to £400 million.
In a letter to the regulator, the organisation objected “strongly” to proposals for an incentive scheme that would be based on a market share baseline.
The forum said that would be inappropriate because it could be seen to be “giving an unfair advantage to those suppliers who have high levels of theft and penalising those who don’t”.
It warned the incentive could have perverse consequences, making detection of theft more rewarding than theft prevention.
The letter was signed by Colette Baldwin, Eon regulation and policy executive and chair of the Gas Forum’s distribution supplier workgroup. It said: “If any financial inducement to improve performance is required, then some form of performance assurance framework with financial consequences should be considered instead.”
There would be difficulties proving “genuine theft” of gas as opposed to unrecorded gas, it added, and a risk that customers would be unfairly accused of stealing gas.
This article first appeared in Utility Week’s print edition of 31 August 2012.
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