It was only last week that this column was berating the energy regulator Ofgem for levying footling fines of no deterrent value. The energy regulator's £42 million penalty against National Grid yesterday answers that criticism. The fine is one of the biggest on a British company by a British regulator. Even so, it is still only about a week's profits for Grid.

Grid stands accused of stifling competition in the supply of gas meters by locking gas suppliers into lengthy contracts of as much as 20 years under which they could only replace a very small number of meters. Suppliers going to rival companies for meters faced big penalties.

After Ofgem went to the trouble of introducing a special regime to foster competition in this esoteric corner of the gas industry, it was certainly heavy-handed of Grid to act in a way that made it virtually impossible for a competitive market to develop.

But Grid argues it indirectly offered a good deal to end-using domestic gas customers, slashing the fees it charged suppliers for the meters. Suppliers such as British Gas and npower entered voluntarily into these arrangements and there was no evidence consumers were harmed in any way.

Both sides are completely confident that they have European competition law on their side, which either says something about lawyers or something about EU competition law. Someone is going to be sorely disappointed. By appealing to the Competition Appeal Tribunal, Grid is seriously raising the stakes both for itself and for Ofgem.

The appeal could delay a final decision by another year. This saga has already gone on for years. Grid risks an even bigger fine if it loses and a bigger hit to its judgment. Taking its punishment quietly and moving on might have been the easier option.

For the energy regulator too, the stakes are high. Ofgem has already tied up its people for three years fighting over an issue which, at the end of the day, accounts for only £11 of the annual bill of the typical residential customer.

Its resources might have been better concentrated elsewhere.

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