Theft on Shipper-less Sites 14th October 2008

Agenda Background Existing Obligations on Industry Parties Theft on Shipper-less Sites Questions

Background We estimate that gas theft costs consumers as much as £220m per annum. Rising wholesale prices increase the cost of theft Evidence from our own revenue protection team is that theft on shipper-less sites is increasing British Gas is developing a UNC modification to increase the effectiveness of the reasonable endeavours scheme

Existing Obligations on Industry Parties Suppliers have a licence condition to inform the Transporter where it discovers or suspects theft of gas has taken place Under schedule 2B (Gas Code) of the Gas Act Transporters have the power to “cut off the supply of gas” where any person: Injures any gas fitting provided by the gas supplier Alters an index to any meter Prevents any such meter duly registering the quantity of gas conveyed At industry discussions our competitors have actively diluted the ERA proposals to incentivise theft Incur additional cost that they are unable to recover

Theft on Shipper-less Sites Shipper-less site scenarios: Theft on site that has never been registered and is not recorded on sites and meters Theft on site where Shipper has removed meter and withdrawn from site Theft on site where Shipper has not removed meter and withdrawn from site Clarification is required on the rights and responsibilities of parties where theft is discovered on a shipper-less site (see questions on next slide)

Questions How many sites have been withdrawn from where a meter is still in situ How many sites have been identified as still using gas after a shipper has withdrawn and is supporting analysis available What do xoserve do when in receipt of an allegation of theft on a shipper-less site What happens when a Transporter engineer discovers an instance of theft? Can the Transporters provide scenarios and volumes of theft discovered ? Can the networks clarify the Gas Safety Regulation process for disconnecting sites and confirm timescales ? Where “theft” is discovered what are Transporters powers to cut off shipper-less sites (prior to GSR) and what are the volumes ? Confirm what training is given to Transporter engineers on “theft detection” Clarify the process for dealing with open meter by-passes