New deal struck for gas customers

http://news.bbc.co.uk/go/rss/-/1/hi/northern_ireland/6191654.stm

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Gas customers in Northern Ireland are to benefit from a new deal with gas company, Phoenix, the energy watchdog has said.

Iain Osborne, chief executive of Ofreg, said bills would not rise as sharply as they have done in the past.

However, the new deal will not mean a cut in gas bills. Phoenix said the agreement would bring "longer-term pricing stability" to the market.

Phoenix has spent £400m building the gas network in Northern Ireland.

Under the original terms of its licence, it had until 2016 to recover those costs.

Of the average household bill of £628, 22% - or £138 pounds - goes towards those costs.

But with time running out to recoup the investment, customers were facing a significant increase in prices.

After five months of negotiations the energy regulator, Ofreg, made an agreement with Phoenix who will now have another 30 years to recover the costs.

The company will also get a slightly reduced return on its investment - a saving of £25m that will be passed on to consumers.

Ofreg, the Office for the Regulation of Electricity and Gas, is an independent public body which protects the interests of electricity consumers by promoting effective competition in generation, transmission and supply.