Builders bury true cost of energy

New build property dwellers are losing out at the hands of property developers, paying up to a staggering £15 million in additional charges every year for receiving their gas through private pipe lines, without their knowledge.

Traditionally, all gas pipes were connected to the mains gas network by National Grid Transco. However in a cost cutting exercise, developers are now turning to private companies (IGT – Independent Gas Transporters) to lay pipe work, thereby reducing initial connection charges.

Research by SimplySwitch.com, the price comparison and switching service, reveals that over half (56%) of new home dwellers in the UK were not aware of the higher charges associated with an IGT network. Furthermore, 96 per cent of them were not informed of this at the time of purchase or rental, leaving them with no alternative but to pick up the additional costs long-term.

Karen Darby, from SimplySwitch.com, comments: “Three out of the big six suppliers are currently charging their customers more for receiving their gas through an IGT network. These charges are often hidden, resulting in a higher unit rate and / or a yearly supplemental charge.

“According to our research, over half (54%) of consumers don’t know which mains gas network they are serviced by and it’s only at the point of switching and / or set-up of their utilities they realise. This can be very frustrating for the customer who is effectively picking up the tab for the developer year on year, and the initial savings made during construction are unlikely to have been passed on to them in terms of property price and / or rental rate”.

The research also indicated that 90 per cent of customers felt they should have been told about their gas configuration before committing to a property. A third (32%) cited the developer as the party most responsible for communicating this information whilst the solicitor (18%), vendor (15%) and estate agent (14%) closely followed.

Karen Darby concludes: “Industry regulator Ofgem is estimating that by 2008, over one million homes and businesses will be connected to an IGT network. At present we are facing a situation whereby consumers on the same street may be paying much higher rates for their gas because of where they live. This is only set to get worse with Gordon Brown pledging to build three million new homes by 2020.

“In addition, some suppliers have started to exclude IGT customers from certain new tariffs coming onto the market such as capped, fixed or online and the choice of payment methods is limited. In an era of soaring energy prices it seems unfair that an increasing number of people are paying over the odds and are not receiving the same benefits of competition and choice”.