30th Mar 2015 11:26
LONDON (Alliance News) - UK antitrust regulator the Competition and Markets Authority Monday said it has granted permission for one of the UK's electricity transmission companies and British Gas to appeal against price controls that have been introduced by the market regulator Ofgem on the transmission companies.
On March 4, Northern Powergrid (Northeast) Ltd, a unit of Berkshire Hathaway Energy, and British Gas Trading Ltd, a unit of FTSE 100 constituent Centrica PLC, both sought to appeal over the price controls finalised by Ofgem in November last year.
Northern Powergrid is one of the UK's five electricity network operators, alongside SSE Power Distribution, owned by SSE PLC, Electricity Northwest, owned by funds controlled by the Commonwealth Bank of Australia and a fund controlled by US bank JP Morgan, UK Power Networks, owned by Cheung Kong Group, and SP Energy Networks, which is owned by Spain's Iberdrola.
The anti-trust regulator said British Gas Trading is appealing as a "party materially affected by the decision" as it is not an electricity distribution network operator.
In November, Ofgem said it had finalised price controls on the transmission companies which would save consumers around GBP2.1 billion. When the regulator tabled its draft proposals in July, it had said that the companies had identified GBP700 million of savings themselves, but the regulator's further price controls resulted in an additional GBP1.4 billion of savings.
Ofgem's move to impose tougher price controls than the energy transmission companies were expecting came amid increased political pressure to cut rising energy bills amid the economic downturn that followed the financial crisis. UK politicians were being criticised for not doing enough to protect consumer budgets being squeezed at one end by low income growth and the other by rising bills for things like power.
On Monday, the Competition and Markets Authority confirmed it has given permission for both companies to appeal the price controls and will now appoint a group of panel members to determine the companies' appeals, it said.
The appeal process, which will give both Ofgem and the companies the chance to make there cases, will close on April 22, but the Competition and Markets Authority did not state when a final decision would be made.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
CentricaSSE