Energy News

Ofgem Fines National Grid £41 Million

Monday 25 February, 2008

By Denae D’Arcy

National Grid, the UK’s power distributor, has today received the largest ever fine handed down from energy regulator Ofgem.

The company is in trouble for anti-competitive behaviour, and Ofgem says National Grid has “severely restricted” suppliers from providing good service.

Ofgem chairman Sir John Mogg said: "National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers."

National Grid maintains domestic gas meters for five of the UK’s energy suppliers. The contracts with the suppliers only allow a small number of meters to be changed each year and Ofgem says this prevents suppliers from offering “lower prices and improved service.”

National Grid owns 99% of the UK’s gas meters but says there is no evidence customers had been harmed and is planning an appeal.

National Grid's chief executive, Steve Holliday, answered the charges:

“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."

Ofgem says the fines stem from National Grid’s contractual agreements with energy suppliers beginning in 2004.

Chris Eagle, Commercial Manager for EnergyChoices.co.uk says this represents a victory for the already pressurised energy consumer:

“National Grid does seem to have an unfair monopoly on the domestic gas metering system. Customers should now see cheaper bills once new gas meters are fitted; a long overdue boon. A new gas meter can add to the energy efficiency of a person’s home; recently developed technology allows for more accurate monitoring of usage.”

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