National Grid fined £41.6m

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The Independent Online

Power distributor National Grid was today fined £41.6m for restricting competition in the UK's gas metering market.







Energy regulator Ofgem said the company, which owns 99% of the UK's gas meters, had "severely restricted" rival suppliers from replacing its equipment with cheaper or more advanced devices.



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 said there was no evidence customers or competition had been harmed and added that it would be lodging an appeal.









Today's fine is the biggest ever imposed by the regulator.



Ofgem said National Grid had struck deals with five of the UK's six major energy suppliers to supply and maintain meters.



The contracts include financial penalties that apply if suppliers replace more than the "small" number of meters allowed under the contract, the regulator said.



Ofgem said: "They have severely restricted the rate at which suppliers can replace even National Grid's older meters with cheaper or more advanced meters from rival meter operators.



"By restricting competition, National Grid has deprived gas suppliers and customers of access to lower prices and improved service."



Ofgem said National Grid had also curbed innovation in the supply and maintenance of household metering.



Sir John said: "Ofgem has imposed a substantial fine on National Grid for a serious breach of competition law."



He said the firm's market "abuse" could discourage suppliers from installing so-called smart meters - which could automatically send data to energy firms for bill calculations and remove the need for meter readers to visit homes.



National Grid, which owns about 21 million gas meters, said it was disappointed with the ruling.



It said the 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.



The company added that Ofgem was consulted throughout the contract process.



National Grid's chief executive, Steve Holliday, said: "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.



"Despite nearly three years of exhaustive analysis by Ofgem, we believe there is no evidence that National Grid has harmed consumers, competition or gas suppliers, and we are left with no option but to present our case to the Competition Appeal Tribunal."



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