Contract Revisions Due to Electricity Market Reform

The Situation

When the UK Government introduced the New Electricity Trading Arrangement (NETA) in 2001, it abolished the rules and institutions on which existing power purchase agreements relied. Some generators and customers disputed whether their agreements could be carried over to NETA, and who should pay the new charges that subsequently arose.

NERA's Role

NERA Director Graham Shuttleworth was retained by a generator to represent its case at an "Expert Determination," at which an appointed "Expert" was to arbitrate the generator’s case against its customer. Mr. Shuttleworth explained how NETA had affected energy prices, and advised whether and how the contract should be amended -- in light of NETA’s effects -- to fulfill its original commercial intent. Mr. Shuttleworth also presented a report that explained how NETA had replaced one method of remunerating generators with another, and rebutted the customer’s case during oral questioning.

The Result

The dispute was resolved in favor of the generator, who noted that "NERA’s role as an expert witness was fundamental to the Expert's appreciation of the strength of our case."