In the matter of: Bulb Energy Limited (In energy supply company administration)
[2023] EWHC 1647 (Ch)
Wales and West Utilities Limited, R (on the application of) & Anor. v Gas and Electricity Markets Authority & Ors.
21 November 2022
[2022] EWHC 2940 (Admin)
High Court
A gas company sued because the government regulator wouldn't let them pass on all their debt costs to customers. The court said the regulator's rules were fair and the gas company's arguments were wrong.
Key Facts
- •Wales & West Utilities Ltd (WWU) challenged the Competition and Markets Authority's (CMA) decision upholding the Gas and Electricity Markets Authority's (GEMA) price control decision.
- •The challenge concerned the methodology used to calculate WWU's cost of debt allowance, particularly the exclusion of derivative-based interest costs.
- •WWU argued that GEMA's standardized approach, based on a hypothetical 'reasonably efficient operator', was unfair, discriminatory, and unlawful.
- •The CMA's decision was appealed on five grounds, relating to statutory interpretation, GEMA's financing duty, the cost of debt and tax approaches, and the licence modification process.
Legal Principles
Statutory interpretation of sections 23D(2) and 4(a) and (b) of the Gas Act 1986, and section 4AA of the same Act.
Gas Act 1986
Standard of review for appeals under sections 23B-23G of the Gas Act 1986 – a rehearing, not a de novo reconsideration.
Gas Act 1986, sections 23B-23G
Wednesbury unreasonableness – irrationality, discrimination, or perversity.
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223
Locus standi in judicial review – the right to bring a claim.
Various case law on judicial review standing
Outcomes
Permission to apply for judicial review refused on all five grounds.
The CMA's interpretation of the Gas Act 1986 and its application of the relevant legal principles were found to be correct and lawful. WWU failed to demonstrate any arguable grounds of error.
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