Financial penalties policy 280618
| Year | 2018 |
| Published date | 28 June 2018 |
| Energy Sector | Corporate |
Utility Regulator
June 2018
1
Our Policy with respect to Financial Penalties
BACKGROUND
1.1. The Energy (Northern Ireland) Order 2003, as amended (“the Energy Order”)
provides that in certain circumstances we may impose a financial penalty on
any electricity or gas regulated person
1
. The Water & Sewerage Services
(Northern Ireland) Order 2006 (“the Water Order”) provides that in certain
circumstances we may impose a financial penalty on any relevant undertaker
(i.e. a company appointed as a licence holder for the provision of water or
sewerage services). The term ‘regulated company’ is used in this document to
encompass both any electricity or gas regulated person and any relevant
undertaker under the Water Order.
1.2. Both Orders provide that the amount of a penalty must be reasonable in all the
circumstances of the case and that it must not exceed 10% of the turnover of
the regulated person/licence holder.
2
In the alternative, as per Article 45(9)(b)
of the Energy Order, where the regulated person is or is part of a vertically
integrated undertaking and the relevant condition or requirement to which the
contravention
3
relates is imposed on a vertically integrated undertaking
(2009/73/EC), a penalty imposed shall not exceed 10% of the turnover of the
vertically integrated undertaking.
1.3. The Orders require us to prepare and publish an up to date statement of policy
with respect to both the imposition of financial penalties and determination of
their amounts. This statement therefore adopts a cross-utility approach to in
addition make provision for the Utility Regulator’s role and responsibilities in
respect of the imposition of financial penalties and the determination of their
amount as regards any holder of a licence for water or sewerage services in
Northern Ireland.
1.4. We cannot impose a penalty on a regulated person/licence holder under the
Orders where we are satisfied that the most appropriate way of proceeding is
under the Competition Act 1998. We have powers to investigate and fine a
company under the Competition Act 1998. If our investigation proves to be one
1
Regulated person’ means both licence holders and exemption holders.
2
Meaning 10% of applicable turnover in the preceding business year as supplemented and determined in
accordance with the Electricity and Gas (Determination of Turnover for Penalties) Order (North ern Ireland)
2005 in the case of electricity and gas licence holders and the Water Industry (Det ermination of Turnover
for Penalties) Order (Northern Ireland) 2007 in the case of penalties imposed on a water or sewerage
service licence holder.
3
Contravention includes for example a failure to comply.
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