Court Ruling on consumer access to Heathrow electricity

07/11/14

Mr Justice Green gave a highly significant judgment in the field of energy supply today ([2014] EWHC 3678 (Admin)). It followed the rolled up hearing of an application for judicial review by UK Power Networks Services (Contracting) Ltd (“UKPNS”) of a decision taken by the Gas and Electricity Markets Authority (“Ofgem”) on 31 March 2014.

The claim turned on the right under EU law of certain high voltage electricity users at Heathrow Airport to switch from buying their electricity from the owner of Heathrow Airport, Heathrow Airport Ltd (“HAL”) to a different electricity supplier.  The question raised by the proceedings was who bears the obligation under EU law (specifically Directive 2009/72/EC, which is part of the Third Package of measures liberalising the electricity market), as implemented by amendments to the Electricity Act 1989, to facilitate the switching of suppliers by high voltage electricity customers at Heathrow.  Each of UKPNS and HAL had argued that the other party bore this responsibility.  The reason for UKPNS’ involvement was that UKPNS has contractual obligations related to the operation and maintenance of the high voltage part of the electricity distribution network at Heathrow Airport. 

In the decision under challenge, Ofgem had found that UKPNS bore the relevant responsibilities under the Act and Directive.  UKPNS sought to challenge this conclusion, in particular because Ofgem had reached its decision despite recognising that UKPNS was not actually able to perform the obligations that it had been found to bear.

Mr Justice Green granted both UKPNS’ application for permission and the claim itself, remitting the matter to Ofgem for re-consideration.  The Judge considered that “the Authority erred in law in a number of important respects in the manner in which it approached the issues before it” (para 11).  Amongst Ofgem’s errors were its conclusion that only one party could owe the third party access obligations under EU and domestic law, and its failure to ask itself which the relevant system was in respect of which third party access is required.

The judgment is here.