Euston Energy Ltd, trading as Northumbria Energy: Final Order

Opened:
Jan 2020
Closed:
May 2020

On 10 January 2020 the Authority published a notice of proposal to issue a final order on Euston Energy Ltd (“Euston”) in accordance with section 26(1) and (2) of the Electricity Act 1989 and section 29(1) and (2) of the Gas Act 1986.

The Authority had been in discussions with Euston regarding the requirement to become a DCC User (as defined in standard licence conditions 42.11 and 48.11 of the gas and electricity supply licences respectively).

Standard licence conditions 42.8 of the gas supply licence and 48.8 of the electricity supply licence require licensees to become DCC Users by 25 November 2017. As highlighted in the Authority’s open letter from December 2017, those suppliers who entered the market following the 25 November 2017, should not exit Controlled Market Entry (CME) without being a DCC user.

The particular behaviour of concern giving rise to the proposal to make a Final Order was that Euston failed to become a DCC User by the deadline and remained non-compliant. By failing to be a DCC User in accordance with the licence condition, its existing customers with smart meters were suffering harm because they did not have smart meter functionality. There would also have been harm to customers who lost their smart functionality on switching to Euston. Representations or objections with respect to the proposed final order were invited to be made to the Authority by 10 a.m. on 3 February 2020.

Euston made written representations on 3 February 2020. The Authority noted the representations received from Euston in the context of the consultation undertaken pursuant to section 26(1) of the EA89 and section 29(1) of the GA86. The Authority noted the progress Euston had made to becoming a DCC User since leaving CME and that Euston anticipated becoming a DCC User before the end of March 2020. However, the fact remained that Euston was not compliant with the Relevant Condition despite the fact that Euston should have been compliant before exiting CME.

Therefore, on 6 March 2020, the Authority made the final order, pursuant to section 25(1) of the Electricity Act 1989 and section 28(1) of the Gas Act 1986, requiring Euston:

• to become a DCC User by no later than 31 March 2020;

• not to acquire any new customers or add any customer accounts by upgrading to dual fuel from the date that the Final Order is made until Euston can demonstrate that it is a DCC User.

On 1 April 2020, the Authority received satisfactory evidence from The Smart Energy Code Administrator and Secretariat (SECAS) that Euston had completed all the required steps to become a DCC user and had therefore met the requirements set out in the Final Order for it to be able to acquire new customers and add new customer accounts by upgrading to dual fuel.

On 9 April 2020, the Authority published its notice of proposal to revoke the Final Order imposed on Euston on 6 March 2020. The Authority was satisfied that the Final Order should be revoked because Euston became a DCC User on 1 April 2020 and is therefore compliant with standard licence conditions 42.8 of the gas supply licence and 48.8 of the electricity supply licence.

The Authority gave this notice in accordance with section 26(6) of the Electricity Act 1989 and section 29(5) of the Gas Act 1986. Any representations or objections with respect to the proposed revocation were invited to be made to the Authority by 5 p.m. on 8 May 2020. No representations or objections were received in response to the proposal to revoke the Final Order.

On 11 May 2020, the Authority issued a Revocation Order under section 25(7)(c) of the Electricity Act 1989 and section 28(7)(c) of the Gas Act 1986. The Authority decided that the Final Order was no longer required for the purpose of ensuring Euston’s compliance with standard licence conditions 42.8 of the gas supply licence and 48.8 of the electricity supply licence as Euston became a DCC User on 1 April 2020. The Final Order is no longer in place.