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Appeals Against GEMA Decisions on Industry Documents

Many of the detailed rules that govern activities in the gas and electricity markets are set out in codes and other industry documents which have been designated by GEMA as part of the licensing framework. Processes for modifications to these codes and agreements are set out in the individual documents with, in a number of cases, the decision on whether to approve or reject a modification being made by GEMA.

The Energy Act 2004 introduced a right of appeal against GEMA decisions on modifications and, in 2005, through the Electricity and Gas Appeals (Designation and Exclusion) Order 2005 (SI 2005/1646), some six industry documents were brought into the appeals framework. Appeals are heard by the Competition Commission. The provisions do not apply in Northern Ireland.

The appeals mechanism is intended to increase the accountability of GEMA’s decisions regarding proposed modifications without unduly increasing regulatory uncertainty or delay. Previously, expensive and lengthy Judicial Review was the only way in which GEMA’s decisions in this area could be challenged by market participants. The appeals process is intended to provide a simpler means of appealing decisions and to broaden the grounds on which an appeal may be brought.

Appeals can be brought by anyone materially affected by a particular modification or by a body or association whose functions include representing persons who are affected. Modification decisions that safeguard security of supply or where GEMA has accepted industry’s recommendation or consensus are protected in that no appeal can be brought in respect of them.

In August 2007 the Government launched a consultation on proposals to include new industry documents within the scope of the Energy Act appeals mechanism: the Distribution Connection and Use of System Agreement (DCUSA) and the independent Gas Transporters Uniform Network Code (iGT UNC).

The closing date for responses to the consultation was 23 November 2007.