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Euston Energy Ltd, trading as Northumbria Energy: Final Order

On 10 January 2020 the Authority published a notice of proposal to issue a final order on Euston Energy Ltd (“Euston”) in accordance with section 26 (1) and (2) of the Electricity Act 1989 and section 29 (1) and (2) of the Gas Act 1986.

The Authority had been in discussions with Euston regarding the requirement to become a DCC User (as defined in standard licence conditions 42.11 and 48.11 of the gas and electricity supply licences respectively).

Standard licence conditions 42.8 of the gas supply licence and 48.8 of the electricity supply licence require licensees to become DCC Users by 25 November 2017. As highlighted in the Authority’s open letter from December 2017, those suppliers who entered the market following the 25 November 2017, should not exit Controlled Market Entry (CME) without being a DCC user.

The particular behaviour of concern giving rise to the proposal to make a Final Order was that Euston failed to become a DCC User by the deadline and remains non-compliant. By failing to be a DCC User in accordance with the licence condition, its existing customers with smart meters are suffering harm because they do not have smart meter functionality. There will also be harm to customers who will lose their smart functionality on switching to Euston.

Representations or objections with respect to the proposed final order were invited to be made to the Authority by 10am 3 February 2020.

Euston made written representations on 3 February 2020. The Authority has noted the representations received from Euston in the context of the consultation undertaken pursuant to section 26(1) of the EA89 and section 29(1) of the GA86. The Authority notes the progress Euston has made to becoming a DCC User since leaving CME and that Euston anticipates becoming a DCC User before the end of March 2020. However, the fact remains that Euston is not compliant with the Relevant Condition despite the fact that Euston should have been compliant before exiting CME.

Therefore, on 6 March 2020, the Authority made the final order, pursuant to section 25 (1) of the Electricity Act 1989 and section 28 (1) of the Gas Act 1986, requiring Euston:

• to become a DCC User by no later than 31 March 2020;

• not to acquire any new customers or add any customer accounts by upgrading to dual fuel from the date that the Final Order is made until Euston can demonstrate that it is a DCC User.

As soon as Euston becomes a DCC User, the sales ban will be lifted and the Authority will begin the process of revoking the final order.

On 1 April 2020, the Authority received satisfactory evidence from The Smart Energy Code Administrator and Secretariat (SECAS) that Euston had completed all the required steps to become a DCC user and had therefore met the requirements set out in the Final Order for it to be able to acquire new customers and add new customer accounts by upgrading to dual fuel.

On 9 April 2020, the Authority published its notice of proposal to revoke the Final Order imposed on Euston on 6 March 2020. The Authority was satisfied that the Final Order should be revoked because Euston became a DCC User on 1 April 2020 and is therefore compliant with standard licence conditions 42.8 of the gas supply licence and 48.8 of the electricity supply licence.

The Authority gave this notice in accordance with section 26(6) of the Electricity Act 1989 and section 29(5) of the Gas Act 1986. Any representations or objections with respect to the proposed revocation are to be made to the Authority by 5pm on 8 May 2020.

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