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CMA rejects energy companies' appeal over electricity dispute
The Competition and Markets Authority has rejected an appeal from energy suppliers SSE and EDF over their request for lower electricity transmission charges.
The pair had complained to energy industry regulator Ofgem that British generators paid more in transmission charges in 2015/16 than the maximum permissible under EU law and so requested a change to industry rules that would have resulted in generators receiving a £120m rebate from National Grid.
Ofgem last November said the maximum permissible level of charges under EU law had not been breached.
SSE and EDF appealed to the CMA, disputing whether there was an exclusion from the EU cap on transmission charges for the cost of connections between offshore wind farms and the onshore grid.
The CMA concluded that there was such an exclusion and therefore there had not been a breach of the cap and Ofgem was entitled to reject the modification request.
Andrew Wright, senior partner at Ofgem, said: "It is good news for consumers that the CMA has upheld Ofgem's decision. If the modification had gone ahead, it is likely that the rebate would have cost consumers up to £120 million and led to further payments to larger generators in the longer term.
"It is disappointing that SSE and EDF challenged our decision. The energy market is under close scrutiny and companies should be working hard to deliver a better deal for customers rather than seeking additional revenues that will add to customers' bills."