The Utility Regulator today welcomed the judgment of Mr Justice Girvan in a judicial review sought by power generator, AES Kilroot. The case concerned the Regulator’s decision that the Single Electricity Market (SEM), launched in November 2007, meets the criteria in the contract cancellation condition of Kilroot’s licence.
The Utility Regulator’s Chief Executive, Iain Osborne, stated:
“We welcome the court’s support for the integrity and rigour of our processes. The Single Electricity Market will deliver significant long-term consumer benefits through competition and investment.
Today’s ruling confirms that the SEM enables us to cancel Kilroot’s contract in 2010 - if this is in consumers’ interests. We will consult on the cancellation itself at the right time, and today’s decision reinforces our ability to do that.
The effect is that the Utility Regulator’s rights remain unimpaired to cancel Kilroot’s long-term contract with NIE. These costs are borne by all NI electricity consumers and over the life of this contract is has generally been costly to consumers. “
ENDS
Notes to Editors
# The Utility Regulator is the non-Ministerial Government Department responsible for regulating the electricity and gas industries and water and sewerage services in Northern Ireland.
# Today’s ruling was in the matter of a judicial review brought by AES Kilroot against a decision made by the Utility Regulator in October 2007. The Utility Regulator then determined that the market conditions which allowed for future cancellation of Kilroot’s long term power contracts to sell electricity to NIE had been met as a result of the Single Electricity Market coming into being. The Utility Regulator determined that those market conditions (the Requisite Arrangements under Kilroot’s licence) were sufficiently facilitative of competition in the electricity market, and brought sufficient present and future benefits to consumers to warrant a determination in respect of future cancellability to be made. Kilroot sought to challenge the determination on 9 grounds falling broadly into a challenge over the rationality or substance of the determination, and a challenge over the lack of perceived procedural fairness of the determination.
# In the judgment, Justice Girvan rejected all 9 grounds of challenge. He supported the Utility Regulator as a conscientious decision maker acting in good faith and with knowledge of all the facts. The Regulator’s conclusion that the SEM and its new arrangements facilitated an increase in competition was sound.
# On the question of procedural fairness, the judge supported the Regulator’s approach, since particular economic interests should not dictate the form of a general consultation process.
# The Judge has ordered AES to pay the Utility Regulator’s costs in the case.
# Media Contact - Greg Irwin (0779) 4335860.