Economic regulation

Regulated companies are subject to licensing regimes and rules that set the parameters of how they can do business in advance, including limits on the prices they can charge and the returns they can make. They engage often and in detail with their regulator throughout each price control period, and seek to build a constructive regulatory relationship. This allows price review processes, policy changes, legislative uncertainty, licence modifications, new mechanisms, and significant challenges like delivering on net zero and other environmental and sustainability targets, to be managed effectively and with a view to achieving the optimum outcome for consumers.

“The advice received from NRF was undoubtedly excellent, as was their prior knowledge of the sector, just as you would expect. But what marks NRF out was the quality of the collaboration that we had with them.”Legal 500 UK 2022

However, sometimes things go wrong and the issue is too significant – for the business, investors, consumers and/or other stakeholders – to go unchallenged. Companies have the right to expect fair and lawful outcomes from their regulator based on sound analysis and unbiased decision-making. Where this is not the case, companies and other stakeholders may from time-to-time need to take steps to hold regulators to account, requiring specialist legal advice and assistance.

Our team has extensive experience of advising companies facing this uncertainty, working collaboratively with them and their economic and financial advisers to navigate the regulatory framework and promote positive outcomes. We regularly support companies in developing and reviewing their business plans, critiquing policy proposals and legislative developments, responding to consultations, advising on regulatory impact assessments, and assisting with risk reviews and horizon-scanning. Members of our team have worked in house and at regulators, and understand the commercial and operational challenges of an intrusive regulatory regime. We advise companies on how to promote successful regulatory outcomes through strategic engagement and, where necessary, through dispute resolution including challenges under the Freedom of Information Act, appeals to the UK Competition and Markets Authority and applications for judicial review.

Our recent experience

Advising National Grid Electricity Transmission plc and National Grid Gas plc on appeals to the UK Competition and Markets Authority against Ofgem’s RIIO-T2 price control
Advising Bristol Water plc on its appeal to the UK Competition and Markets Authority for redetermination of Ofwat’s PR19 price control
Advising Electricity North West Limited as an interested third party in appeals by various water and sewerage and water companies to the UK Competition and Markets Authority against Ofwat’s PR19 price control
Advising Energy Networks Association as an intervener before the UK Competition and Markets Authority in the appeal by NATS En-route Limited (NERL) against its RP3 price determination set by the Civil Aviation Authority
Advising an electricity transmission operator on the proposed introduction of a competition proxy model by Ofgem for funding large onshore transmission projects
Advising the System Operator of Northern Ireland (SONI) on its appeal to the UK Competition and Markets Authority against NIAUR’s price control determination for 2015 – 2020
Advising Electricity North West Limited as an intervener in the price control appeals by British Gas Trading Limited and Northern Powergrid against Ofgem’s RIIO-ED1 price controls