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Regulator Ofgem has called on meter providers to sell or lease meter assets to incoming providers to improve competition in the non-domestic gas market.
Ofgem has made the call as part of a set of steps designed to address concerns about the health of competition in the sector following a review of gas metering products and services which started in February 2015.
It said it wants to minimise unnecessary change of meter upon a change of meter provider, which it says is accounting for 2 per cent of the average consumer gas bill.
The regulator will chair a meeting of market participants “at which we expect companies to come with proposals to make this market work better”, it said.
It is also calling on gas suppliers to take advantage of opportunities such as the smart meter rollout to tender for the appointment of meter providers to reduce the considerable rental charges they pay. It said it will “enhance our monitoring of the market”, and if progress is not observed will consider whether further action is necessary.
There are around 1.4 million non-domestic gas meters in Great Britain and gas suppliers spend approximately £120 million per year procuring metering products and services.
Ofgem said the market has remained “highly concentrated” with National Grid retaining two-thirds of the market a decade after the market was opened to competition, and therefore competition is not working “as well as it should be”.
“Significant costs” when suppliers switch meter provider present a barrier to entry and expansion, and higher energy bills for consumers.
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