Home Knowledge Competition Authority clears ESB’s purchase of Northern Ireland Electricity with commitments

Competition Authority clears ESB’s purchase of Northern Ireland Electricity with commitments

In October 2010, the Authority cleared, subject to remedies, the acquisition by ESB, Ireland’s largest electricity utility, of Northern Ireland Electricity (“NIE”) which owns the electricity transmission and distribution systems in Northern Ireland. ESB is active in the generation, transmission, distribution, wholesale and retail supply of electricity.

In the Republic of Ireland, ESB owns and operates the electricity distribution system. It also owns the electricity transmission system, with an independent company, EirGrid, acting as licensed operator and having responsibility for the planning and development of this grid. In Northern Ireland, the electricity distribution system is owned and operated by NIE. NIE owns the transmission system in Northern Ireland and is responsible for the planning and development of the system in consultation with SONI, its independent operator. NIE and SONI are required to consult EirGrid to coordinate planning and development of the transmission systems in both jurisdictions.

The Authority found that since each transmission and distribution grid is legally confined to its own jurisdiction, there was no horizontal overlap between the parties’ transmission and distribution systems. However, it was concerned that, post-acquisition, due to NIE’s role in planning and developing the transmission grid across the island, ESB may have been in a position to acquire, through NIE, commercially sensitive information regarding these grids. This could have given ESB an unfair advantage in its electricity generation or supply business. In order to address this competition concern, the Authority accepted ESB’s binding commitment to prevent NIE from sharing commercially sensitive information with it.

William Fry acted for ESB in this transaction.