The energy regulator said that the decision endorses its April 2008 findings, which found that the multi-million pound contracts struck by National Grid with suppliers in 2002 when the metering market was opened to competition harmed new entrants’ ability to compete and acted against consumers’ interests.
Ofgem said that the effect of the Court of Appeal’s decision is that suppliers will be free to renegotiate the terms of contracts with National Grid Gas, and it opens the door to claims for damages against National Grid by competing meter operators, as the competition law regime allows.
Lord Mogg, chairman of Ofgem, said: “We welcome the Court of Appeal’s endorsement of Ofgem’s decision. This confirms that National Grid breached the law and acted anti-competitively. It is a victory for consumers and strikes a firm blow in favor of new and competing entrants in Britain’s energy market.”
The ruling follows an earlier decision in April 2009 in favor of Ofgem by the Competition Appeal Tribunal.
However, National Grid said that it is disappointed with the decision but is pleased that the Court of Appeal has recognized the unusual nature of the case, including Ofgem’s involvement in the development and negotiation of the contracts, and has halved the fine to GBP15m.
Mark Fairbairn, executive director of National Grid, 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.”
National Grid is reviewing its next steps, which could include an appeal to the Supreme Court.
