CAT judgement on gas metering contracts

 

TIDMNG. TIDM35DT TIDMBD02 TIDM87QJ 
 
RNS Number : 3853R 
National Grid PLC 
29 April 2009 
 

29 April 2009 
 
 
National Grid plc 
 
 
Competition Appeal Tribunal judgment on Gas Metering Contracts 
 
 
National Grid plc ("National Grid") welcomes the Competition Appeal Tribunal's 
judgment earlier today not to uphold in full Ofgem's 2008 decision that National 
Grid had infringed the Competition Act 1998 by entering into a number of 
metering contracts with UK gas suppliers in 2004. 
 
 
Although the Tribunal found that certain aspects of our legacy gas metering 
contracts were unacceptable, it recognised that Ofgem was involved in the 
development of the contracts and stated in its judgment: "We can well understand 
National Grid's surprise and dismay when the Authority opened its investigation 
into these agreements ... and imposed such a substantial fine". 
 
 
The Tribunal found that there was no abuse in respect of our new and replacement 
gas metering contracts, justifying our decision to appeal, and therefore we are 
disappointed that the GBP41.6m fine originally imposed has only been reduced to 
GBP30m. 
 
 
National Grid Executive Director, Mark Fairbairn said: "We note the Competition 
Appeal Tribunal's judgment, in which it has upheld our arguments that aspects of 
Ofgem's decision were flawed.  We are however disappointed that the Tribunal 
found certain aspects of the legacy meter contracts, which offered lower prices 
to customers than regulatory terms, were unacceptable. 
 
 
"We continue to believe that our gas metering contracts have not harmed 
consumers, competition or gas suppliers.We will now thoroughly review the 
judgment and consider our next steps." 
 
 
 
 
Additional information 
 
 
National Grid Metering provides regulated gas meter and meter reading services 
on behalf of gas suppliers for an asset base of around 18 million* domestic, 
industrial and commercial meters.  With revenues of GBP349m*, it 
represents around 3% of National Grid as a whole. 
 
 
The investigation related to Metering Services Agreements (MSAs). These are 
domestic gas metering contracts which were freely and openly negotiated with gas 
suppliers and discussed with Ofgem. They were offered to suppliers as a lower 
cost alternative to the default regulated contracts. 
 
 
National Grid also owns a non-regulated meter business, OnStream, which provides 
rental, installation, maintenance and meter reading services for gas and 
electricity meters throughout Great Britain, on behalf of energy suppliers. 
 
 
National Grid is reviewing the detail of the judgement and considering the 
options which could include seeking leave to appeal to the court of appeal. 
 
 
* Revenues and meter numbers as at 31 March 2008. 
 
 
Contacts 
Investors 
George Laskaris        [phone]+1 917 375 0989 (m) 
Richard Smith       [phone]      [phone] (m) 
Media 
Ross Hayman+44 (0)1926 65 5272+44 (0)7876 038750 (m) 
Chris Mostyn         [phone] [phone] (m) 
Gemma Stokes         [phone] [phone] (m) 
Graham McQuarrie+44 (0)1926 65 5273 [phone] (m) 
Brunswick 
Paul Scott     [phone]    [phone] (m) 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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