URE: Final Order

Feb 2019
Sep 2019
Regulation Area:
Sectoral Regulations

On 13 February 2019, the Authority published its notice of proposal to issue a final order on URE Energy Ltd (URE) in accordance with Section 25(1) of the Electricity Act 1989 (EA89).

The Authority had been in discussions with URE regarding compliance with its obligations under Article 7 of the Renewables Obligation Order 2015.

The particular behaviour of concern giving rise to the proposed final order was that URE failed to meet its Renewables Obligations (RO) by failing to produce Renewables Obligation Certificates (ROC) to the Authority by 1 September 2018, or to make payments as an alternative, sufficient to discharge its RO. The draft final order requires URE to make a payment to the Authority in full settlement of its RO for the obligation period of 1 April 2017 to 31 March 2018, including interest, in the sum of £209,013.78 by no later than 31 March 2019.

Representations or objections with respect to the proposed final order were invited to be made to the Authority by 6 March 2019.

Representations were received from SSE and these support the proposal. In summary, SSE welcomed the proposed measures being taken by the Authority in order to protect the integrity of the RO scheme and shared the Authority’s concern that compliant suppliers are penalised by shortfalls arising from non-compliant suppliers, such as URE.

The Authority noted the representations received from SSE in the context of the consultation undertaken pursuant to section 26(1) of the EA89. It considered these representations carefully and concluded that no modifications were required to its findings nor to the proposed final order.

Therefore, on the 8 March 2019, the Authority made the final order, pursuant to section 25(1) of the EA89, requiring URE to:

1. Make a payment to the Authority in full settlement of its RO, for the obligation period of 1 April 2017 to 31 March 2018, including interest, in the sum of £209,013.78 by no later than 5pm on 31 March 2019; and

2. Notify the Authority by email to james.crawford@ofgem.gov.uk of such payment immediately after it has been made.

The Authority set out its reasons for making the final order in a Notice of reasons pursuant to Section 49A(1)(f) and 49A(2) of the EA89 dated 8 March 2019.

URE failed to make the required payment by the deadline set and has not made any relevant payment subsequently.

On 1 May 2019 the Authority issued URE with a Notice of failure to comply with a Final Order within the meaning of section 25 of the Electricity Act 1989. The notice provided URE with written notice, pursuant to Schedule 2(1)(c)(i) of the Electricity Supply Licence, of URE’s failure to comply with the Final Order dated 8 March 2019, namely a failure to pay to the Authority the sum of £209,013.78.

The notice further explained that if this failure was not rectified to the satisfaction of the Authority within three months of URE receiving the notice, the Authority may at any time revoke URE’s Electricity Supply Licence subject to giving no less than 30 days’ notice.

URE did not rectify its failure to comply with the notice within three months. Therefore, the Authority decided that URE’s Electricity Supply Licence should be revoked with 30 days’ notice, in accordance with paragraph 1(c)(i) of Schedule 2 of the Licence.

The grounds for revocation were that the Licensee failed to comply with the final order of 8th March 2019, namely a failure to pay to the Authority the sum of £209,013.78.

The licence was revoked on 14 September 2019.

Further details can be found in the letter to URE and the notice of revocation dated 13 August 2019.