Authority invites comments on proposed Financial Penalties policy paper

Published: 30 September 2004

Consultation opened on 30 September 2004. Consultation closed 29 October 2004.

Summary

The factors that Northern Ireland’s Energy Regulator, The Northern Ireland Authority for Energy Regulation (“the Authority”), proposes to take into account when deciding whether or not to impose financial penalties on companies, and in deciding on the scale of those penalties, are announced in a consultation document entitled Financial Penalties policy paper .

POLICY ON FINANCIAL PENALTIES SET OUT BY NIAER

The factors that Northern Ireland’s Energy Regulator, The Northern Ireland Authority for Energy Regulation (“the Authority”), proposes to take into account when deciding whether or not to impose financial penalties on companies, and in deciding on the scale of those penalties, are announced in a consultation document entitled Financial Penalties policy paper .

Under the Energy (Northern Ireland) Order 2003, the Authority is able to impose financial penalties of up to 10% of turnover if companies contravene licence conditions and certain statutory obligations or fail to meet guaranteed performance standards.

The Authority has now set out for consultation its policy on how and when financial penalties will be imposed and has outlined factors which it will take into account when making decisions on the amount of such penalties. They include:

* The seriousness of the contravention or failure;

* The harm that has been caused to customers or other market participants;

* The length of the contravention or failure;

* Any gains, financial or otherwise, that have been made from a contravention or failure.

Douglas McIldoon, Chairman of the Authority said “The fact that we are able to impose financial penalties on companies is an important extension of the Authority’s powers, provided by the Government in the Energy (Northern Ireland) Order 2003. We would expect to impose penalties when they would be in the interest of customers.

This consultation sets out the factors that we believe should be taken into account before imposing financial penalties and deciding on the scale of those penalties. One main reason for imposing penalties will be to create a real incentive on companies to comply with their licence obligations and to meet guaranteed standards of performance. I look forward to the Department of Enterprise, Trade and Investment (DETI) taking the steps needed to bring this important part of the Energy (Northern Ireland) Order 2003 into effect as soon as possible.”

Any financial penalty imposed by the Authority must be reasonable in the circumstances of the case and must not exceed 10% of the company’s turnover. A penalty cannot be imposed if it would be more appropriate for the Authority to use powers set out in the Competition Act 1998.

Views are invited on these proposals by 29 October 2004 and a final version of the policy on penalties will be issued by the end of November 2004. Please mark any comments you may have for the attention of:

John White
Northern Ireland Authority for Energy Regulation
Brookmount Buildings
42 Fountain Street
BELFAST
BT1 5EE

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