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Systemic failure by broadcasters Ofcom has published the outcome of an inquiry launched in March into the use of premium
18 July 2007 rate telecommunications services in television programmes. The inquiry has found that:
• compliance failures were systemic,
• revenue generation was the major driver in the growth of premium rate services, and
• there was also an apparent lack of transparency through the supply chain and a lack of
clarity about responsibilities.
The conclusion of the inquiry is that broadcasters must be made directly accountable for
their use of premium rate services and that licences should be amended.
ENERGY
Competition Commission
www.competition-commission.org.uk
Energy Code modification appeal The Competition Commission has allowed, in part, an appeal against a decision by the Gas
40/07 10 July 2007 and Electricity Markets Authority to reform the gas offtake regime for Great Britain’s high-
pressure National Transmission System. This is the first appeal heard by the Commission
under the Energy Act 2004 against decisions by GEMA on modifications to gas and electricity
codes. E.ON UK Limited appealed GEMA’s decision to direct modifications to the Uniform
Network Code which sets out arrangements for the transportation of gas in Great Britain.
E.ON challenged GEMA’s decision to implement proposal UNC 0116V and not proposal
UNC 0116A which had been proposed by E.ON. British Gas Trading Limited intervened in
support of E.ON’s appeal. The Commission has quashed the decision to implement UNC
0116V, citing concerns with regard to the proposed reform of flexibility capacity and the
cost benefit analysis on which GEMA’s decision was based. However, the Commission has
not ordered the implementation of proposal UNC 0116A. The decision will now be
reconsidered by GEMA. GEMA is supported by Ofgem, the Office of Gas and Electricity
Markets. Although the decision in relation to proposals 116V and 116A was taken by GEMA,
consultation on the proposals was conducted by Ofgem. Industry codes are rules by which
participants in the gas and electricity industry operate. Six codes have been designated as
codes in respect of which an appeal lies to the CC. The appeals process under the Energy
Act 2004 is concerned with the codes that have the most commercial significance. The
statutory right of appeal was provided for in sections 173 to 177 and Schedule 22 of the
Energy Act 2004, following a consultation by the DTI. The grounds upon which appeals can
be allowed are set out in section 175 of the Energy Act 2004. No appeal can be brought
where GEMA consents to a majority recommendation of a particular modification by the
industry’s own code panel. Certain decisions by GEMA cannot be appealed, such as where
the delay caused by an appeal might have a material adverse effect on the security of supply.
Under the Energy Act 2004, the CC has the power to quash decisions by GEMA, to approve
modification decisions, to direct that recommended modifications rejected by GEMA have
effect, or to remit decisions to GEMA for reconsideration and redetermination in line with
the CC’s directions. An appeal will normally take 12 weeks (exceptionally a maximum of 14
weeks) from the date of GEMA’s decision.
Department of Trade and Industry
http://www.dti.gov.uk/
Energy White Paper Following the Energy Review Report of July 2006, the government has published its Energy
23 May 2007 White Paper. This sets out proposals for dealing with the long-term energy challenges
arising from climate change and the need to ensure clean, secure, affordable energy. The
three objectives to which the government’s proposals relate are:
• encouraging electricity generation from low-carbon supplies,
• ensuring the United Kingdom’s security of energy supply, and
• reducing energy consumption and emission of greenhouse gases.
The proposals will impact widely on the energy industry, in particular on the nuclear and
renewable sectors. The White Paper hopes to encourage an increase in low-carbon electricity
generation by:
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