Unidentified gas charges explained!

In some cases when gas enters the national supply, it is not correctly attributed to the right consumer; this instance is commonly referred to as ‘Unidentified Gas’. Unidentified Gas is also known as Unallocated Gas within the gas industry may be caused by a number of factors including theft of gas by end users and unregistered meters, gas leakages and gas measurement errors.

It is hard to identify those responsible for using Unidentified Gas and the cost of these losses has to be recovered. Historically Smaller Supply Points (SSP) had to cover the entire costs of the gas and no costs were attributed to the Larger Supply Point (LSP). However the Allocation of Unidentified Gas Expert (AUGE) has been appointed to devise a plan that will allocate fairly and accurately the costs of unidentified gas between SSP and LSP.

£100 million in unidentified gas charges each year?

The AUGE has estimated that the total volume of unidentified gas is almost seven terawatt hours annually, which is valued at around £100m. One third of the costs will be attributed to the Larger Supply Point and the remaining costs will be attributed to the Smaller Supply Points who consume less than 73.2 megawatt hours of gas per annum. In time LSPs may face the greater burden of these charges, which will be recouped by commercial gas suppliers from the end users.

Large Commercial Gas users should be wary of their suppliers collecting these charges in their supply contracts. We have identified two UK Suppliers prepared to absorb the costs and not pass them on.

Anyone with an Unidentified Gas supply should be aware that Transco intents to prosecute any with such supplies and they could find themselves liable for up to 6 years’ worth of charges and criminal charges.

If you would like to register your supply and avoid back dated charges and potential criminal charges, contact us today for confidential advice.