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| Ofgem fines National Grid £41.6m | Ofgem fines National Grid £41.6m |
| (about 2 hours 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. | 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. |
| Smart meters | Smart meters |
| GAS METERING 18 million gas meters1.2 million replaced annuallyNational Grid: 40% of marketNational Grid claims deal saved customers £120m over 4 years Source: National Grid | GAS METERING 18 million gas meters1.2 million replaced annuallyNational Grid: 40% of marketNational Grid claims deal saved customers £120m over 4 years Source: National Grid |
| Underlying the complaint is the issue of smart meters, which tell customers exactly how much energy they are consuming at any one time. | Underlying the complaint is the issue of smart meters, which tell customers exactly how much energy they are consuming at any one time. |
| Ofgem has been a strong advocate of smart metering which they believe can help households reduce their energy consumption. | Ofgem has been a strong advocate of smart metering which they believe can help households reduce their energy consumption. |
| Liberal Democrat Environment spokesman Steve Webb said that "the government must now take urgent action to ensure a smart meter is installed in every home as quickly as possible." | Liberal Democrat Environment spokesman Steve Webb said that "the government must now take urgent action to ensure a smart meter is installed in every home as quickly as possible." |
| "Smart meters are good for your pocket and good for the planet. It is vital that all households get access to these meters as soon as possible." | "Smart meters are good for your pocket and good for the planet. It is vital that all households get access to these meters as soon as possible." |
| '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 was consulted throughout this process of contract development and negotiation and has acknowledged that National Grid had no intention to breach the Competition Act." |
| However, an Ofgem spokesperson said National Grid's assertion was untrue: "Ofgem was not consulted throughout the process of contract development negotiation. National Grid could have asked us for guidance but didn't." | However, an Ofgem spokesperson said National Grid's assertion was untrue: "Ofgem was not consulted throughout the process of contract development negotiation. National Grid could have asked us for guidance but didn't." |
| Ofgem also counters that under the terms of National Grid's contracts, suppliers wrongly faced penalties if they replaced more than a certain number of gas meters. | Ofgem also counters that under the terms of National Grid's contracts, suppliers wrongly faced penalties if they replaced more than 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. | |
| 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. |
| National Grid's turnover from its gas meter business is around £260m a year. | National Grid's turnover from its gas meter business is around £260m a year. |