Electricity companies challenge regulator

 

TWO COMPANIES which generate and sell electricity have brought a court challenge to decisions by the energy regulator preventing them from including the costs of the new carbon tax in the prices at which they propose to sell electricity on a given day.

The carbon levy involves losses of some €18 million a year to the companies, they claim.

Viridian Power Ltd and Huntstown Power Company Ltd, both with offices at the Navan Road, Dublin, are both wholly owned by another company which in turn is owned by Viridian Power and Energy Holdings Ltd. Their judicial review proceedings against the Commission for Energy Regulation were transferred to the Commercial Court yesterday by Mr Justice Peter Kelly.

Maurice Collins SC, for the applicants, said they wanted orders quashing decisions of the regulator last October directing them not to include in their bidding prices the costs associated with the carbon levy. Those decisions were of significant commercial detriment to his clients, Mr Collins added.

Mr Justice Kelly made directions for the exchange of legal documents and fixed the case for hearing next April.

Both applicants operate electricity generation plants here, under licence issued by the regulator who supervises a regulatory framework under which they and other providers must make offers setting out the price at which they will sell electricity on the wholesale market on any given day.

The regulator examines the offers and the operator offering the best price is given the right to sell its electricity on the day in question.

The companies say they cannot submit their prices as they see fit but, under their licence conditions, must base their offers on the costs they incur in generation.

In those circumstances, they say they considered their licence conditions required them to include in their offers the cost of the carbon levy imposed under the Electricity Regulation (Amendment) (Carbon Revenue Levy) Act 2010. The Act imposes a carbon levy for 2010, 2011 and 2012.

The companies complain the regulator issued directions last October not to include the costs of the levy in their offers. As a consequence, they say they cannot recover the lost of the levy from the sale of electricity, their chief activity, but must absorb this cost involving losses of some €18 million a year for the duration of the levy.

The companies want various orders and declarations, including a declaration that their price offers must lawfully include the amounts in respect of the carbon levy paid, or to be paid, to the regulator. They are also claiming damages for loss caused by the disputed decisions.