ESB stages legal challenge to directive from regulator

A High Court challenge by the ESB's Independent Energy subsidiary to a 10-point directive from the electricity regulator is likely to focus on a requirement for it to submit contracts to Mr Tom Reeves for clearance. This is understood to be the company's main objection to the directive.

The case was mentioned in court yesterday before Mr Justice Kelly who listed it for further mention on Thursday when, if all documents are ready, it is expected a hearing date will be set next week.

The three matters to be dealt with, before the full judicial review hearing, will be an application by electricity firm ePower to be joined to the action as a notice party; an application by Mr Reeves, to lift a stay granted by the High Court last December preventing his directive being published and coming into force and a further application by the regulator to have the ESB subsidiary undertake to meet, if it loses its legal challenge, any damages suffered by third parties as a result of the proceedings.

On December 22nd last, ESB Independent Energy secured leave from the High Court to challenge, in judicial review proceedings, the regulator's directive. It also secured a stay on the directive coming into force.

The case arises from how power generated by the ESB is auctioned to independent suppliers who sell it on to industrial customers. ePower has refused to pay for a tranche of power secured in protest at what it alleges are anti-competitive strategies pursued by ESB Independent Energy. Such claims were denied by the ESB subsidiary. In court yesterday, Mr Richard Nesbitt SC, for the regulator, said he would be ready to file a statement of opposition within seven days. He was also seeking the stay regarding the directive be lifted and that the ESB subsidiary, as a condition of leave to take the judicial review proceedings, should be required to undertake to meet damages which any third party might suffer.

His client had no application to ePower's application to be joined as a notice party to the proceedings.

He said it was unclear whether the stay preventing the directive coming into effect would expire yesterday or was to continue pending the full judicial review action. That issue should be agitated next week and the regulator was seeking to lift the stay.

Mr Donal O'Donnell SC, for ESB Independent Energy, said he was "taken aback" by Mr Nesbitt's comments. He had understood the stay continued until the full hearing. There had been "cantankerous" correspondence between the regulator and his client but this was the first time it had been suggested the stay was not granted pending the full hearing.

Mr Justice Kelly said he would list the case for mention on Thursday with a view to having the issues raised decided the following week. The stay should continue pending determination of the motion to have it set aside.