Investigation into National Grid Gas plc’s compliance with Special Conditions E2B, E6 and E20, Standard Special Condition D9 and A40 of its gas transporter licence in respect of its Distribution Networks

Opened:
Nov 2008
Decision Proposed:
Jan 2011
Closed:
May 2011
Company:
National Grid
Regulation Area:
Sectoral Regulations
Breach Area:
Misreporting

The Gas and Electricity Markets Authority ("the Authority") has confirmed its decision to impose a financial penalty on National Grid Gas plc (NGG) for its failure to comply with Special Conditions E2B, E6 and E20, Standard Special Condition D9 and A40 of its gas transporter licence with respect to the reporting of its mains decommissioning activities.

Under those provisions of its licence, NGG was required to provide to Ofgem for each regulatory year a report of the mains decommissioning work completed by NGG in that year.

The ability of regulators to rely on accurate information from regulated companies is a fundamental part of the regulatory regime. The Authority therefore regards any contraventions of the obligations on regulatory information as serious.

Ofgem conducted and completed an extensive investigation into NGG’s regulatory reporting in this context for the years 2005/06, 2006/07 and 2007/08.

The Authority found that NGG contravened the provisions of Special Conditions E2B, E6 and E20 and Standard Special Conditions D9 and A40 of its licence during the relevant period.

The Authority considered it appropriate to impose a financial penalty for these contraventions. The Authority decided to impose a financial penalty of £8 million on NGG.

Further details can be found in the final penalty notice.