In 1995 the Gas Act 1986 was amended to allow for the creation of Independent Gas Transporters (IGTs), which develop, operate and maintain local gas transportation networks.
IGT networks are directly connected to the Gas Distribution Network (GDN) via a Connected System Entry Point (CSEP) or indirectly to the GDN via another IGT. Although domestic, industrial and commercial premises are connected to IGT networks, the new housing market constitutes the largest share of the IGT market. The IGTs also serve domestic infill premises.
It is estimated that the number of consumers connected to an IGT network is approximately 870,000, and this is projected to reach the one million mark within a few years. There are nine groups holding an IGT licence, although only five of these groups own and operate transportation assets.
In terms of IGT policy undertaken by the Gas Distribution policy team, Relative Price Control (RPC) was introduced to regulate IGT transportation charges in January 2004. RPC requires that IGT charges to all new customers should be capped at a level broadly consistent with the GDN equivalent charge. For those sites that pre-date RPC (legacy sites), IGTs will continue to charge under the legacy arrangements until they migrate into RPC.
Ofgem monitors the charges of both types of arrangement on a periodic basis to ensure that IGTs are levying charges that fully comply with both the IGT licence and any legacy charging approvals issued by Ofgem. In March 2006, financial ring-fencing of IGTs was implemented to protect the interests of consumers by safeguarding the financial stability of IGTs.