Court Decision.

Episode 3

The Scarlet Letter

The letter published in this Episode is from a British Gas “junior customer services manager” to a Stornoway gas custom… Oops-a-daisy; that should have read; “from a British Gas Executive Officer to a Stornoway gas customer.” Don’t know why I said “junior customer services manager”. It’s almost as if I was trying to downplay her actual position for some unknowable purpose – which I most certainly was not! But, no big deal. You will have noticed, I did not capitalise the job-title, I used it only once and you, dear reader, should have read it subjectively!

Anyhow, to the letter: It was written in June 2017 by the same Executive Officer who had contacted another Stornoway customer one month previously to offer him £2045.62 to compensate for money he had “overpaid “due to “incorrect information” being given when he “called” (five times) about access to a more economic tariff: The incorrect information was that “Sainsbury’s Energy does not deliver propane gas to Stornoway” – which, of course, was accurate. It does not: being an abstract advertising entity, Sainsbury’s Energy doesn’t deliver gas to anywhere! - and it was written a mere three months after the MP for the Western Isles had released a press statement claiming that his constituents in Stornoway were being “massively overcharged by between £600,000 and £1 million a year”. You might think then, that an Executive Officer at British Gas would be extremely careful not to forward blatantly false information in response to the customer enquiry: “Why can’t I switch to another energy-supplier?” You’d think!

Indeed why would she do otherwise? It’s not as if she would have been trying to keep secret the fact that the propane gas which the “Piped Propane” customers of Stornoway use, is delivered to the town on behalf of British Gas by SGN: Everyone knows that! Or that it is brought in by road-tanker which isn’t cheap. In fact it’s hugely expensive: Everyone knows that too! Or that British Gas doesn’t have to pay a penny towards these transportation costs since they are met, by the Industry Regulator, Ofgem!!! Well, sort of… Ultimately the costs are met by every gas customer in the UK (no matter their supplier) through a levy applied to every unit of gas they use. And everyone knows that too! Don’t they?

Of course having its product delivered to Stornoway completely free of charge isn’t the end of the matter. The costly maintenance of the stored gas after it has been delivered free of charge has to be paid for. As does the expensive upkeep of the Pipe Network. Fortunately for British Gas, Ofgem comes to the rescue once again and pays that too!  Which means that its Stornoway operation must be the most profitable aspect of British Gas’ business in the UK: It’s pure profit! British Gas needs invest nothing in Stornoway. So it doesn’t! It doesn’t even offer its Stornoway customers access to the “goods and services” available to its network gas customers, despite the 1995 Gas Act requiring it treat its “Propane Estate” customers on exactly the same “contractual terms” as its network gas customers. And everyone knows that too! Don’t they?

Given the above, you would not expect that a British Gas Executive Officer would attempt to mislead a customer into thinking that the “high costs” involved in supplying his gas were met by her company and not Ofgem. Then again, as you know, I didn’t expect its outside counsel to inform The Court that the Executive Officer who penned the letter below was: “a junior customer services manager”.

Here’s the letter in full (customer’s name withheld):

                                                                                                                                                                                                                                                 Executive Office

British Gas

2^nd Floor, Lakeside West

30 The Causeway

Staines

Middlesex

TW18 38Y

T 01784 874994

executiveoffice@britishgas.co.uk

8 June 2017

Dear (Stornoway customer)

Thank you for your reply to my recent letter regarding the tariffs that are available to our piped propane gas customers in Stornoway. I was very sorry to learn that you’re unhappy with my response.

Our most recent letters offering a Sainsbury’s tariffs [sic] are based on current prices and of course the differential between Scottish Gas and Sainsbury’s prices are not fixed, it varies as the energy market changes.

You’ve asked why you cannot change supplier. While Stornoway is theoretically open to competition, the high cost of supplying gas means that, in practice, other suppliers do not choose to supply. Centrica is required by the Gas Act 1986 (as amended by the Gas Act 1995) to provide supply and is the only gas supplier for Stornoway as a result, under the Scottish Gas and Sainsbury’s Energy branding.

We’ll continue to show the Cheapest Tariff Message on our bills and statements and if you want to change your tariff in the future, please contact us.

We’ll continue to liaise with your MP regarding this complaint.

Yours sincerely

Kathy White

Senior Customer Manager

Executive Office.

The audacity inherent in this letter is only compounded by the position of its author. Remember this as we consider British Gas’ response to Mr Stornoway customer: Kathy White is not only an Executive Officer in British Gas, she is the Executive Officer who was selected to liaise with the MP for the Western Isles subsequent to his press statement accusing British Gas of overcharging his constituents by up to £1million per annum.

Ms White’s response to the question: Why can’t I access British Gas’ cheapest tariffs? begins:

…regarding the tariffs that are available to our piped propane gas customers in Stornoway.

That assertion (if true) is proof positive that British Gas was, at the time of writing, in clear violation of its obligations as prescribed in “The Scheme”, Schedule 5 of the 1995 Gas Act” (An agreement drawn-up and thereafter agreed between British Gas the then Secretary of State for Trade & Industry, Michael Heseltine) which required British Gas to treat its Piped Estate customers on exactly the same “contractual terms” as its network gas customers. How so? Because if British Gas had been treating its Stornoway customers on the same contractual terms as its network customers on June 8 2107 the answer to the question would necessarily have been:

                                 

                                  Dear Stornoway customer

                                  As required by the 1995 Gas Act, all of our tariffs are available

                                  to all of our customers no matter their location.

                                                                                                    Yours sincerely, etc. etc.

Of course, that’s exceedingly small potatoes compared to Ms White’s next assertion.

 “While Stornoway is theoretically open to competition, the high cost of supplying gas means that, in practice, other suppliers do not choose to supply.”

This statement, from a British Gas Executive Officer should really be the subject of a formal investigation by the appropriate authorities:  writing to a customer from British Gas’ Executive Office to imply that it is the only supplier willing to fund the transportation of gas to his area whilst being fully aware that the cost of gas transportation to his area – no matter the supplier - is zero, must, surely, be of regulatory concern.

Ms White’s assertion: “We’ll continue to liaise with your MP regarding this complaint”, is important. It clearly implies British Gas had been in contact with the MP with regard to this specific complaint. That being so, it raises the very important question - did it also advise the MP that other energy suppliers were refusing to supply his constituents because of the “high cost” of transporting the gas to Stornoway? If it did, that would constitute an astronomical increase in the consequential significance of the largest energy supplier in the UK proffering demonstrably incorrect information.

Why does this matter to anyone outside the Stornoway Piped Propane Gas Network?

It matters because the consequences of the Industry Regulator electing not to investigate communications such as the above letter are not limited to customers in a remote part of the UK.

If the Industry Regulator allows British Gas to imply to its customers in Stornoway that it (British Gas) meets the cost of transporting gas whilst, in reality, these costs are met by the Industry Regulator itself, that raises an urgent question as to the de facto relationship between the Industry Regulator and one particular supplier. And if that relationship is anything other than that prescribed by Law, it should be of concern to every UK citizen. Because if Ofgem, ostensibly an Arm’s Length Business (ALB - formerly a Quango), is prepared to overlook any energy supplier misleading correspondents (possibly including elected representatives) in one area of the country, it is just as likely to do so in another? The fact is, if such communications are overlooked by Ofgem it necessarily undermines both its Statutory Role (as Industry Regulator) as well as the public’s ability to trust a Government Sanctioned ALB.

Many readers may conclude that the above is an incidental issue, geographically restricted to a remote archipelago. Such a conclusion would be misguided: History concerns itself exclusively with the recording of the ultimate consequences of apparently, incidental issues.

Next Week:  The irresistible appeal of British Gas!