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Ofgem fines National Grid £41.6m | Ofgem fines National Grid £41.6m |
(10 minutes later) | |
National Grid has been fined £41.6m by energy regulator Ofgem for restricting the development of competition in the domestic gas meter market. | National Grid has been fined £41.6m by energy regulator Ofgem for restricting the development of competition in the domestic gas meter market. |
Ofgem said the company had committed "a serious breach of competition law". | Ofgem said the company had committed "a serious breach of competition law". |
It said National Grid's actions had prevented gas suppliers from contracting with other firms for cheaper metering deals. | It said National Grid's actions had prevented gas suppliers from contracting with other firms for cheaper metering deals. |
National Grid, which operates the UK's main gas pipeline system, has said it will appeal against the decision. | |
The company is also responsible for the UK's long distance electricity transmission network. | The company is also responsible for the UK's long distance electricity transmission network. |
'Voluntary agreements' | 'Voluntary agreements' |
Ofgem's decision relates to a number of metering contracts National Grid entered into with gas suppliers in 2004. | Ofgem's decision relates to a number of metering contracts National Grid entered into with gas suppliers in 2004. |
National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers Ofgem chairman Sir John Mogg | National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers Ofgem chairman Sir John Mogg |
"These 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, saving customers around £120m over the four years of their operation," said National Grid. | "These 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, saving customers around £120m over the four years of their operation," said National Grid. |
"Ofgem was consulted throughout this process of contract development and negotiation and has acknowledged that National Grid had no intention to breach the Competition Act." | |
Ofgem counters that under the terms of National Grid's contracts, suppliers wrongly faced penalties if they replaced over a certain number of gas meters. | Ofgem counters that under the terms of National Grid's contracts, suppliers wrongly faced penalties if they replaced over a certain number of gas meters. |
"National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers," said Ofgem chairman Sir John Mogg. | "National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers," said Ofgem chairman Sir John Mogg. |
The UK's gas distribution system was formerly run by Transco after the privatisation of British Gas. | The UK's gas distribution system was formerly run by Transco after the privatisation of British Gas. |
In 2002 its parent company, Lattice Group, merged with National Grid. | In 2002 its parent company, Lattice Group, merged with National Grid. |
The new company was first called National Grid Transco, before being shortened to National Grid in 2005. | The new company was first called National Grid Transco, before being shortened to National Grid in 2005. |