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National Grid, the UK gas and power infrastructure operator, has been fined a record £41.6 million by UK energy market watchdog Ofgem for restricting competition in the market for domestic gas meters.
Ofgem said that National Grid had abused its dominant position in the market, restricted the number of meters made by competitiors from being installed. Ofgem say this harmed consumers.
“Ofgem has imposed a substantial fine on National Grid for a serious breach of competition law,” Sir John Mogg, the chairman of the watchdog, said in a statement.
“The abuse has prevented suppliers from contracting with other companies for cheaper metering deals and could discourage suppliers from installing smart meters.”
National Grid has been accused of restricting the process through which customers can replace their existing gas meters with more efficient ones from rival companies.
Agreements that National Grid had signed with five of the six big UK energy companies to supply and maintain gas meters featured penalties if they replaced more than a limited number of meters, thereby slowing the process.
National Grid responded by saying that it was “extremely disappointed” by Ofgem's decision and intended to appeal.
“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," the company said.
It claimed that the agreements had saved customers about £120 million over four years.
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At the end of the day it is the consumers who will pay the £41.6m., the very people whom Ofgem seek to protect!!
PG, Liverpool,
Jennifer Hynes asks, "How much had this fine cost consumers?"
The answer is £41.6 million, Jennifer.
When are we going to see anyone take responsibility for this mess, and lose their (very lucrative) jobs for their incompetence? I shall not be holding my breath.
Anil Chatterjee, Manchester,
Strange that the regulator does nothing to punish the Big Six energy suppliers, EdF, RWE, Eon, Iberdrola, SSE and Centrica, from operating as a cartel. National Grid, whose transportation costs are marginal to the energy cost we punters pay, is now getting fined, for what exactly?
OFGEM just wants to look tough with the gas transporter (Transco as was) because it took no action against the largest gas supplier, Centrica (aka British Gas) for its recent price hikes. Pathetic really.
Paul, Coventry,
What a complete waste of time.
There is no point in fining a monopolistic company for breaches of competitive trading. The fine is simply passed on to the consumer in higher bills, whilst those directors who authorise such activity just say sorry and carry on regardless, without any personal penalty.
If Ofgem, or any other regulator, is to carry any consumer confidence it needs to target and punsh those company officials responsible.
Pw, Banstead, Surrey
Rather than a fine, it should be ordered to give a rebate to customers.
CA, Manchester, UK
All these 'fines' being imposed on the utilities are nothing more than a stealth tax being imposed on those least able to pay, rather these companies should be ordered to reduce their prices in order to return the money to the people they first fraudulently obtained it from, instead of using it to support Mesa's Brown/Darlings failing monetary polices.
I Johnson, Ramsgate, UK
About time, something was done, to regulate these money grabbing Companies.
Mark, dartford, uk
We bought a little flat and wanted to have gas because in the flat is gas. We phoned several providers, we phoned National Grid, we lost many precious hours on the time to receive gas in that little flat.
Nobody helpt us. They all said, if you don't know the account number and/or the number of the meter we can't help you.
This is crazy, because there is a meter installed in the flat but without a number and there is also gas. Ho can something like this happen.
I think that the maladministration and mismanagement is so disastrous that they do not know what the right hand does if the left hand has done something.
Ingrid, London, UK
Is it not time that serious anti competitive behaviour was criminalised as in the USA.? The 'fine' will be paid for of course indirectly by consumers and those organisations who have been the victims of the behaviour will not be compensated. The Government will collect £41M.
The directors of an organisation found guilty 'without reasonable doubt ' of such should at least be disbarred, if not fined personally or sent to goal
Peter Copping, Manchester, England
The 5 Suppliers entered into those contracts with full knowledge of the alternatives - which only British Gas chose to pursue. The other 5 didnt have the ability or common sense to take advantage of the competitive opportunity on offer - little surprise there then, since we know they dont really like competition!
Graeme, Harrogate,
Wonderful - the regulator fines National Grid £41.6M, which will end up being paid by their customers so will ultimately end up being passed down the chain to the consumer. The very people who suffered financially from the original offence!!!
And of course we also paid for the regulator to be in place and the cost of the extensive (and expensive) enquiry.
Has anyone considered an alternative here - like large fines or jail sentences for senior management
Simon, Leicester,
No the agreements did not save consumers any money. It amended horendously high costs down to just higher than they could be. That is what they are basing their figures upon.
Jonathan Mills, Brighton,
why cant ofgem do anything about gas prices instead they attack nat grid at every chance they have they cut nat grids income every year and expect them to carry on as usual with less workforce. nat grid have targets to maintain and are pienerlised if they dont maintain them the gas meters used by nat grid are perfect for the job intended for, if you ask me the gas suppliers should be looked at as they seem to be making all the money and all they want is for cheaper inferiour meters to be fitted so they get more profit from their customers, its bad enough that they charge the higest gas price if you have a prepayment meter fitted, so low income customers are punished for being poor, so what is ofgem doing about that ?.
phil, luton,
How much will this fine cost us consumers?
Jennifer Hynes, Plymouth, England