Bevan Brittan victory ensures increased Ofgem accountability

Bevan Brittan victory ensures increased Ofgem accountability” />Bevan Brittan has scored a Competition Commission victory against Ofgem that will force the regulator to justify fully any decisions that modify energy industry codes.

This was the first proceeding to go the full course against energy watchdog Ofgem (under its statutory name of Gas and Electricity Markets Authority (Gema)) under the Energy Act 2004. The act paved the way for a new appeals system to be launched, giving the energy sector a more robust mechanism to challenge its regulators.

This case came about following Ofgem’s decision three months ago to impose changes to the arrangement of gas offtake (emissions from energy utilities). This included annual auctions of emissions capacity.

E.on UK challenged the regulator’s decision to modify the Uniform Network Code (UNC), which sets out arrangements for the transportation of gas in the UK.

The three-adjudicator panel, chaired by Dame Barbara Mills QC, part-allowed the call by E.on to reform the gas offtake regime for the UK’s high-pressure National Transmission System. However, the Commission quashed part of the decision, citing concerns about the proposed reform of emissions trading and the basis of Gema’s cost benefit analysis.

Duncan Sinclair, legal director at Ofgem, said the watchdog is considering the issues carefully.

“The concept of a quick appeals process of our decisions on industry proposals in this area is in principle a good one,” he said. “On the other hand, the timetable of this process was particularly burdensome for all parties.”

E.on instructed Tim Boyce from Bevan Brittan and was represented by lead counsel Alan Griffiths of One Essex Court. David Anderson QC of Brick Court led for Gema and was instructed by Herbert Smith.

Interveners Centrica instructed partner Tim Reid from Ashurst, who instructed Ian Glick QC of One Essex Court.