Ofgem is minded to close an investigation into power exchange company Epex Spot as the company has committed to take steps to avoid distorting competition.
But before it makes the final decision, the regulator has opened a public consultation and will consider any comments raised about the commitments Epex and its parent company EEX have made.
In December 2018 Ofgem launched an investigation under the Competition Act into whether Epex had “abused a dominant position” by failing to take the steps required to enable main rival Nord Pool to participate in certain electricity trading auctions between the British and Irish energy markets.
The energy regulator says Epex’s actions are likely to have distorted competition, potentially leading to an increase in fees or a reduction in service or choice for customers.
As a result of Ofgem’s investigation, Epex has committed to take steps to enable Nord Pool to participate in the auctions and to carry out an internal review of its competition law training.
These commitments, which do not constitute an “admission of wrongdoing”, should ensure that Nord Pool is able to access the auctions by 23 July.
Responding to the investigation Wolfram Vogel, director of public and regulatory affairs at Epex Spot, said: “Epex Spot fully cooperates with Ofgem on this and is committed to finding the best solution for the market, as quickly as possible.
“This is why Epex Spot has submitted commitments to Ofgem, that are now open for public consultation.
“At this stage of the investigation, Ofgem has preliminary concerns only. Epex Spot’s offer of commitments to Ofgem does not constitute or imply any admission of any wrongdoing by Epex Spot.
“Epex Spot does not consider itself to have infringed competition law and has not been found guilty of any infringement by Ofgem at this stage.”
A Nord Pool spokesperson said: “Nord Pool welcomes Ofgem’s statement today and with it the opportunity to provide input to Ofgem’s consultation and to comment on the commitments being proposed.
“We believe that this serves to emphasise the importance of establishing a level playing field between nominated electricity market operators if they are to deliver the full value of electricity market coupling both to market participants and to consumers.
“We welcome the opportunity to participate fully in the Great Britain – Ireland market coupling, which we have always recognised as being highly significant for increased social welfare and security of supply in the island of Ireland.”
Arrangements to implement the auctions between the British and Irish markets went live in October 2018 and were intended to provide for both Nord Pool and Epex, as the two power exchanges operating in Great Britain. To date, only Epex has been able to do so.
If Ofgem formally accepts the commitments from Epex after the consultation it will be able to close the investigation.
The consultation will be open for 11 working days.