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Ouseley J has handed down an important judgment for electricity distributors and their connection customers on the question of whether statute requires distributors to pay interest on sums received by them from customers in advance of connection works being carried out.

The Gas and Electricity Markets Authority had determined that any such advance sums constituted “security” within the meaning of section 20 of the Electricity Act 1989 with the consequence that interest was payable, notwithstanding widespread and longstanding industry practice to the contrary. Ouseley J has quashed that determination, holding that GEMA’s approach would introduce “no clear advantage to the consumer. It could not have been Parliament’s intention, with the language it used, to achieve such a result”.

The full judgment is available here.

Javan Herberg QC and TomCoates represented GEMA.

Michael Fordham QC and Naina Patel represented the distributors Scottish Hydro Electric Power Distribution Plc and Southern Electric Power Distribution Plc, who intervened in support of the claim against GEMA.

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