Metering row costs National Grid £15m
NATIONAL Grid has been fined £15m after the Court of Appeal ruled it had infringed competition rules regarding metering contracts with UK gas suppliers.
The Warwickshire-based utility said it was disappointed with the ruling but pleased that the court had recognised the unusual nature of the case and agreed to halve the fine.
The case began in April last year when the Competition Appeal Tribunal upheld, in part, Ofgem’s 2008 decision that National Grid infringed the Competition Act 1998 by entering into a number of metering contracts with UK gas suppliers in 2004.
In July, the Court of Appeal granted National Grid leave to appeal the CAT’s judgement. The appeal was heard in November, and the Court of Appeal issued its decision yesterday.
The utility said the metering contracts were negotiated over a two-year period, were voluntarily entered into by gas suppliers and delivered immediate and substantial reductions in charges for meter services.
It claimed the move had saved customers around £150m over the past six years.
National Grid said Ofgem had been consulted throughout the contract development process and had acknowledged that the power company had no intention to breach the Competition Act.
In a statement, National Grid said it was disappointed the Court of Appeal had dismissed its grounds for appealing against the CAT judgement.
National Grid executive director, Mark Fairbairn said: “We are disappointed with the Court of Appeal’s decision. We believe our gas metering contracts have delivered substantial financial benefits to our customers in the form of lower metering prices and have neither harmed consumers nor competition.
“However, we are pleased that not only has the fine been halved but the Court of Appeal also recognises the border line nature of this case saying ‘it was not self evident that the arrangements made with the gas suppliers crossed the line into abuse’.”
National Grid is reviewing its next step which could include an appeal to the Supreme Court.
