Ofgem imposes its biggest ever fine
Britain's energy regulator, Ofgem, has imposed its biggest ever fine of £41.6 million on National Grid, owner of Britain's main gas pipeline system.
National Grid has been accused of breaching competition law by abusing its position in the market.
Ofgem’s Chairman, Sir John Mogg, said: "Ofgem has imposed a substantial fine on National Grid for a serious breach of competition law. National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers."
"The abuse has prevented suppliers from contracting with other companies for cheaper metering deals and could discourage suppliers from installing smart meters."
National Grid, owner of 99 per cent of all gas meters in the UK, struck long-term contracts in 2004 with five of the six major energy suppliers to supply and maintain gas meters. The contracts held financial penalties for any supplier who installed more than a small number of meters manufactured by rival operators.
By doing so, the implementation of cheaper, more advanced meters, has been severely restricted. Ofgem states that "National Grid has deprived gas suppliers and customers of access to lower prices and improved service".
With an annual revenue approaching nearly £9 billion last year, National Grid may not see the fine as a significant setback. Responding to the Ofgem fine, it said: "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".
