National Grid is appealing against the decision by energy regulator Ofgem to impose a £41.6million fine for restricting the development of competition in the domestic gas meter market.
Ofgem said the energy network’s behaviour had infringed the Competition Act and hampered efforts to extend the use of smart metering – technology which gives users and producers real time information about energy use, cost and its potential carbon footprint.
Sir John Moog, Ofgem chairman, said: “Ofgem has imposed a substantial fine on National Grid for a serious breach of competition law. National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers.
“The abuse has prevented suppliers from contracting with other companies for cheaper metering deals and could discourage suppliers from installing smart meters.”
But National Grid, which provides metering for 18 million customers, insists it has helped build a competitive market.
The company says it did not infringe competition law and is lodging an appeal against the fine the Competition Appeal Tribunal.
Steve Holliday, National Grid chief executive, said: 'National Grid has been instrumental in helping Ofgem to develop competition in the UK metering industry, and we strongly believe we have never acted anti-competitively in the development of our contracts.
“Despite nearly three years of exhaustive analysis by Ofgem, we believe there is no evidence that National Grid has harmed consumers, competition or gas suppliers, and we are left with no option but to present our case to the Competition Appeal Tribunal.”
Ofgem claimed the company breached competition law due to the nature of its long term contracts with five of the six major energy suppliers to supply and maintain gas meters.
These contracts included financial penalties for suppliers who replaced more than the small number of meters allowed under the contract with National Grid.
As a result the regulator says this “severely restricted” the rate at which old meters could be replaced by cheaper or more advanced meters from rival meter operators.
National Grid said contracts were voluntarily entered into by gas suppliers and delivered substantial reductions in charges for meter services. It argues Ofgem was consulted throughout this process.
Ofgem said the energy network’s behaviour had infringed the Competition Act and hampered efforts to extend the use of smart metering – technology which gives users and producers real time information about energy use, cost and its potential carbon footprint.
Sir John Moog, Ofgem chairman, said: “Ofgem has imposed a substantial fine on National Grid for a serious breach of competition law. National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers.
“The abuse has prevented suppliers from contracting with other companies for cheaper metering deals and could discourage suppliers from installing smart meters.”
But National Grid, which provides metering for 18 million customers, insists it has helped build a competitive market.
The company says it did not infringe competition law and is lodging an appeal against the fine the Competition Appeal Tribunal.
Steve Holliday, National Grid chief executive, said: 'National Grid has been instrumental in helping Ofgem to develop competition in the UK metering industry, and we strongly believe we have never acted anti-competitively in the development of our contracts.
“Despite nearly three years of exhaustive analysis by Ofgem, we believe there is no evidence that National Grid has harmed consumers, competition or gas suppliers, and we are left with no option but to present our case to the Competition Appeal Tribunal.”
Ofgem claimed the company breached competition law due to the nature of its long term contracts with five of the six major energy suppliers to supply and maintain gas meters.
These contracts included financial penalties for suppliers who replaced more than the small number of meters allowed under the contract with National Grid.
As a result the regulator says this “severely restricted” the rate at which old meters could be replaced by cheaper or more advanced meters from rival meter operators.
National Grid said contracts were voluntarily entered into by gas suppliers and delivered substantial reductions in charges for meter services. It argues Ofgem was consulted throughout this process.
You might also like...
Consultation launched over restricting RHI funds for biomass combustion
Proposals put forward by government as part of Clean Air Strategy would restrict financial support for biomass installations in urban areas on the gas grid; biogas systems would still get funding however
UK faces billion-pound funding gap as fuel poverty work stalls
EUA trade body argues that new findings show government commitments to improve energy efficiency of domestic heating have stalled, raising important questions around low carbon funding
Solar power groups urge ongoing government support for ‘export tariff’
Open letter signed by hundreds of organisations urges environment minister to ensure ongoing commitment to mechanism to pay for solar power to be fed back into national grid
"Industry must change the way it works to successfully deliver major projects"
BESA president Tim Hopkinson calls for embracing of offsite construction and digital procurement
