This note is not part of the regulations, but is intended to indicate their general effect.
These regulations, which come into force on the day after the date on which they are made, are urgent regulations made to address potential difficulties for gas consumers and gas retailers arising from the liquidation of the gas retailers in the E-Gas group of companies (E-Gas). The regulations are revoked 6 months after they come into force.
If the liquidator of an insolvent retailer, such as E-Gas, were to disclaim the retailer's contracts with its customers, gas would be supplied to those customers otherwise than under a valid contract. This would result in expense to, and disputes among, other gas industry participants, and could lead to customers being disconnected from a supply of gas.
In order to avoid these outcomes, these regulations provide for the industry body (currently the Gas Industry Company Limited) to transfer the customer contracts of an insolvent retailer to other retailers. The new retailers must continue to supply gas under the transferred contracts for a transition period of a minimum of 30 days. The transferred customers may switch to another retailer, without any fee or penalty, during the transition period, and otherwise will roll over into a contract with the new retailer at the end of that period.
The regulations also—
set out the procedures and methods by which the industry body must allocate customer contracts to other retailers, which involves a random allocation of customer contracts within customer load groups or subcategories, apportioned by retailers' relative market shares; and
provide for the transmission capacity of the insolvent retailer to be provided to any retailer that requires extra capacity in order to supply its new customers; and
require the insolvent retailer to provide certain information to the industry body for consumer billing purposes and consumption reconciliation purposes; and
provide for various transitional matters associated with the transfer of customer contracts, including where customers are part-way through the process of switching to an alternative retailer.