Phoenix savings

Published Friday, 26 August 2011
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Phoenix Natural Gas is facing a swingeing price review which, if approved, would wipe £80m or close to 20% off the value of the company's core pipeline business.

The move would save business and domestic customers around £15m over the two years of the price review from 2012.

It would save households an average £25 a year compared with Phoenix's own proposals.

The very largest business customers could see their annual bills go down by £100,000.

The Energy Regulator is proposing to create these savings by writing down the value of the company's regulated assets.

It justifies the move by pointing to work that the company is getting a return on that has not yet taken place.

The Regulator says "gas consumers should not have to pay for pipes before they are built".

The other form of clawback relates to efficiencies the company has benefitted from.

When a regulated firm like Phoenix builds network for less than was expected, it is allowed to charge a return on the difference. Over time this benefit is withdrawn. That's what's happening now.

Phoenix Gas have declined to comment.

© UTV News
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Jamie Delargy
Jamie Delargy

Jamie Delargy is UTV's Business Editor with a keen eye on local and global economic issues.

A Cambridge Philosophy graduate, Jamie had a brief spell in teaching before launching his career in journalism. In his spare time he enjoys a spot of tennis and is an avid reader.

His favourite saying is "Power corrupts. Absolute power corrupts absolutely."

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