CMA grants energy firm permission to appeal Ofgem licence changes

Following the request on 2 March 2023, the Competition and Markets Authority (CMA) has now granted Northern Powergrid, specifically Northern Powergrid (Northeast) Plc and Northern Powergrid (Yorkshire) Plc, permission to appeal.

Northern Powergrid is seeking to challenge modifications to their electricity distribution licences, which affect how much they can charge their customers. The charges are regulated by the RIIO-ED2 price control decision issued in November 2022 by Ofgem.

The appeal focuses on the way Ofgem calculated the costs Northern Powergrid would spend on maintaining and investing in its networks over the next 5 years, including how different views on the impact of the move to net zero on distribution companies were taken into account.

Having granted permission, the CMA now has 6 months to reach a final view on the appeal. The review will be conducted by an independent group of 3 CMA panel members.

For more information on the process of such appeals, please see CMA70, which outlines appeal rules, and CMA71, the CMA’s appeal guide.

All information on this case is available on the Energy Licence Modification Appeal 2023 page.

Notes to editors

1. Ofgem is the Office of Gas and Electricity Markets (GEMA). It is Great Britain’s independent energy regulator.
2. RIIO stands for Revenue = Incentives + Innovation + Outputs for electricity distribution.
3. Under the appeals regime governed by the Electricity Act 1989, an appeal to the CMA against a decision by GEMA to proceed with the modification of a licence condition can only be brought: (a) by a relevant person – for present purposes, this is a ‘relevant licence holder’; (b) by submitting an application for permission to appeal within the applicable statutory deadline; and (c) after having obtained the permission of the CMA. The CMA may refuse permission to appeal only on one of the prescribed statutory grounds. The potentially applicable grounds in the present case are that the appeal: (a) is brought for reasons that are trivial or vexatious; or (b) has no reasonable prospect of success. The grant of permission may be made subject to conditions.
4. The statutory regime provides that: (a) the CMA’s decision whether to grant permission to appeal is to be taken by an authorised member of the CMA; and (b) a group that is constituted for the purpose of carrying out the CMA’s appeal functions must consist of 3 members of the CMA panel.