{"id":81923,"date":"2017-06-26T15:01:14","date_gmt":"2017-06-26T15:01:14","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=00ced653ae646a3f16d042a4df754066"},"modified":"2017-06-26T15:01:14","modified_gmt":"2017-06-26T15:01:14","slug":"news-story-cma-issues-final-determination-in-ni-gas-distribution-appeal","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=81923","title":{"rendered":"News story: CMA issues final determination in NI gas distribution appeal"},"content":{"rendered":"
\n

In December 2016, the Competition and Markets Authority (CMA<\/abbr>) granted permission<\/a> to Firmus Energy (Distribution) Ltd (FE<\/abbr>) to appeal on 4 grounds against the UR<\/abbr>\u2019s decision to modify its licence.<\/p>\n

FE<\/abbr> has the licence to develop a gas distribution network in 10 towns across Northern Ireland (NI<\/abbr>). This appeal relates to the price control on FE<\/abbr>, which was one of the price controls made by the UR<\/abbr> for the 6-year period from January 2017 to December 2022.<\/p>\n

In its determination, the CMA<\/abbr> has allowed the appeal on some of the grounds. It has allowed the appeal on one ground, concerning the incentive to connect new customers to the gas network. The CMA<\/abbr> has also allowed the appeal in part on one other ground in relation to FE<\/abbr>\u2019s operational expenditure (opex<\/abbr>) \u2013 the amount allowed for the costs of operating its gas distribution network. It will therefore quash the UR<\/abbr>\u2019s decision on those points. The CMA<\/abbr> rejected FE<\/abbr>\u2019s appeal in whole on 2 other grounds.<\/p>\n

The CMA<\/abbr> has remitted the connection incentive matter back to the UR<\/abbr> for reconsideration, requiring it to determine the appropriate value within 6 months.<\/p>\n

In addition, the CMA<\/abbr> determined that the opex<\/abbr> allowance for FE<\/abbr> should include an allowance for extra costs for one omitted item. The UR<\/abbr> has already, last month, implemented a modification to FE<\/abbr>\u2019s licence allowing an increase in opex<\/abbr> allowance to account for these costs.<\/p>\n

The UR<\/abbr> announced the details of the price controls in September 2016<\/a> and published its final decision on 28 October 2016<\/a>.<\/p>\n

The final determination will be published shortly on the case page<\/a>, where other information relating to this appeal can be found.<\/p>\n

Notes<\/h3>\n
    \n
  1. \n

    An energy licence holder may appeal to the CMA<\/abbr> against a decision by the UR<\/abbr> to amend the conditions of its licence. The CMA<\/abbr> must decide whether the appellant has demonstrated that the UR<\/abbr>\u2019s decision was wrong on one or more of the grounds set out in its notice of appeal.<\/p>\n<\/li>\n

  2. \n

    The CMA<\/abbr>\u2019s group of panel members determining the appeal (the Group) has been: Phil Evans<\/a> (Chair), Roger Finbow<\/a> and Jon Stern<\/a>.<\/p>\n<\/li>\n

  3. \n

    The Group received and considered submissions from interested parties in addition to those from FE<\/abbr> and the UR<\/abbr>.<\/p>\n<\/li>\n

  4. \n

    The appeal has been conducted according to the CMA<\/abbr>\u2019s published rules<\/a> and guidance<\/a> for energy licence modification appeals.<\/p>\n<\/li>\n

  5. \n

    There were 4 grounds of appeal, with 12 sub-grounds in total. The 2 grounds which were rejected in whole concerned the treatment of under-recoveries (through which FE<\/abbr> can delay receipt of allowed revenue), and the appropriate weighted average cost of capital and the ability of FE<\/abbr> to finance its operations.<\/p>\n<\/li>\n

  6. \n

    The \u2018connection incentive\u2019 is a mechanism designed to promote connections by customers to the gas network.<\/p>\n<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    The CMA has issued its final determination in an appeal against the NI Utility Regulator\u2019s (UR) price control decision on gas distribution.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/81923"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=81923"}],"version-history":[{"count":0,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/81923\/revisions"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=81923"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=81923"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=81923"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}