The gas industry is just too nice.

24th Aug 2020

 

According to the journal Scientific America, it has been proved that humans are not instinctively selfish individuals, but our first impulses are selfless. And watching the gas industry at work, I argue that it is sometimes just too nice.

Amid accusations aimed at the energy industry of ripping off the consumer, I have never seen this motivation in my dealings with gas network staff from the CEOs down. If anything, just the opposite is true. When there is a gas emergency, the networks take pride in going the extra mile to help vulnerable or stranded customers. When the power networks can’t cope with extra demands placed on it to deal with the emergency, the gas networks don’t blame them, they just get on with the job.

When Ofgem unilaterally decided to change the target to help the fuel poor, which the regulator was warned would reduce the number of measures installed and people helped, the networks took the view that they would try and achieve it anyway. Why? Because they want to do the right thing, despite the obstacle.

It is the gas networks, through projects such as H21, HyNet, HyDeploy, Freedom Project, and H100 that is leading the debate around decarbonisation of heat to homes. Why? Because they have embraced Net Zero, even before the politicians and regulator thought to do so.

So when Ofgem announced that RIIO GD2, the next regulated price settlement, had to be focussed around consumer engagement, the gas networks threw themselves at it. They did exactly what Ofgem asked and sought the views of consumers. They tested these views through dedicated Customer Engagement Groups and in turn submitted to Ofgem what customers told them.

So it was no surprise, well not to me, that Ofgem just ignored this and gave a draft determination that frankly could have been devised months ago, without all the wasted effort. In short, they wanted to reduce the returns earned and cut consumer bills from the outset and will do so. The gas industry will respond, as it always does, nicely. But sometimes, just sometimes, you do feel that being nice doesn’t win any friends.

 Best Wishes

Mike Foster, EUA