Gas Industry Insider Talks

Wow the Shippers are p*ss*d. Some are apparently considering launching a formal complaint about Steve Smith's threatening tone in the letter he sent.
Clearly Steve is trying to spread the blame for the abject failure of the process. It seems strange and a little nieve to attack shippers when clearly customer groups will side with them. I can just imagine Eddie Proffit at the MEUC would have a ball testifying for suppliers in another CC appeal or JR of an Ofgem decision.

1) The £1bn help for the fuel poor that turned out to be £300m a year.
2) The poor guy from eON who dared to tell the truth.
3) and Ofgem (stangely quiet until Friday) when.

1) Ok Fuel poor first
Poor Gordon must but really under the cosh. He knows any windfall tax will either hit the wrong people or get challenged through the courts... Journo's like to peddle the ignorant staple of 'Windfall tax to help fuel poor' and MP's too stupid or uneducated to understand the consequences jump on the bandwagon.
The concept that Generators, Producers, Shippers, Suppliers and Traders are all involved in a supplying electicity to a customer and that most of the money is not made by the 'supply' business clearly passes them by. (Av Supply margins in the Industrial and Commercial market are 0.5 - 1.0% - that's lower than the average supermarket margin - so hard to see the excesive profit there)
So what can Gordon do but bend over and take it from the Big 6. And of course they're desperate to give some back after getting hit by the BERR and Ofgem supply investigations. Clearly the 'agreement' was the best Gorden can get out of them. Clearly normal consumers will end up picking up the bill for any money that does get spent. I wonder how much money will be diverted into the pockets of government appointed consultants. It'll be interesting to see if one of them finds a space for him on one of their boards in the future!

2) eON. So their new slogon is 'More money for us'.
Storm in a tea cup I would imagine but not the brightest thing to say in a room full of journos. Someone commented that it'd be funny to photoshop 'more money for us' onto their marketing material. I'd have to agree.

3) Ofgem. Steve Smith gets upset and throws toys.
Ofgem sent out a letter last thing Friday threatening Shippers who did not 'ensure their customers are fully aware' of the adhoc DN auctions. They are citing SLC 3 which is a little spurious for me. Steve also suggests that Ofgem will be reviewing 'Shippers' conduct' after the auction.
Since Steve came up with the absurd notion of the auction process in the first place you would think that he would at least have the decency to feel a little shame at their abject failure. It shows an ego a little out of control if you ask me.
It is intersting though that Ofgem attended the meeting on the 19th of August and rather than listen to the concerns raised by consumers about the failure of the process and the increased likelihood of firm load shedding and shippers concerns about unwarrented investment and the cost of running auctions, all that Ofgem took away from the meeting was the comment from Total that they might not support the process.
(Ironically I know that Total we just blustering to make a point and already had decided at that point that they would support any of their customers that wanted to bid.)
The first time I read the letter I got cross but quite quickly I was left with a feeling of how sad it must be to be so out of touch with reality that when you cock something up (as we all do from time to time) that you can't recognise it and be man enough to admit it. I guess it's easier to hit someone else and blame them. Still the last time Ofgem tried to bully the industry it bit back and took Ofgem to the CC... My advice would be carefull Steve the other children may well throw the toys back at you!