Eirgrid had no duty to explain exclusion of companies from grid ‘auction’, court hears

Applicants say reasons were not given for their refusals to be allowed bid, claiming breach of fair procedure

High Court action taken by Kilshane Energy Ltd and two other companies. Photograph: iStock
High Court action taken by Kilshane Energy Ltd and two other companies. Photograph: iStock

EirGrid had “no duty” to provide reasons for why it excluded three companies from an “electricity auction” where companies bid to be allowed to supply the national grid, the High Court has heard.

The companies are claiming the decisions would have “cascade effects” on projects that cost tens and hundreds of millions of euro.

Kilshane Energy Ltd, which plans to build two power plants, is challenging a decision by EirGrid, which was backed by the Commission for Regulation of Utilities (CRU), refusing the company permission to participate in the auction, which the High Court has heard was the “only game in town”.

Tony McBride SC, for Kilshane, told Mr Justice Micheál O’Higgins that his client planned to build two 299MW power plants at Huntstown in north County Dublin but was refused access to the auction.

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Two related energy firms, Coolpowra Flex Gen Ltd and Coolpowra Bess Ltd, have brought similar proceedings against EirGrid and the CRU relating to projects in east Galway.

EirGrid and the CRU are contesting the case.

The applicants argue that reasons were not given to them for the refusals to be allowed to bid at the auction. They claim this was a breach of fair procedures.

At the High Court on Wednesday, Niall Handy SC, for Eirgid, said his client had “no duty” to provide reasons for excluding the companies from the auction, which had 160 applicants.

Mr Handy said that there were six “layers” to the application process and EirGrid had to balance promoting competition and being prudent regarding the security of the grid under the statutory duties of both respondents.

Counsel said that Kilshane and Coolpowra had both complained that reasons for the refusals had not been furnished but that it was not for EirGrid to advise bidders or to act in a way that would improve bids.

Mr Handy said that applying parties had accepted and were bound to the terms of the governing Capacity Market Code (CMC) and the applicants have not challenged the code itself.

Mr Handy said the request for reasons for the refusals was “effectively asking EirGrid to improve their applications so that they would then be entitled to be accepted to the auction”.

“This is not their first rodeo, and nor is it Eirgrid’s. All these people know what they are doing. It is not appropriate to say the standard is too high and then ask what one must do to meet it,” said counsel.

The court heard that the closure of the auction had been deferred from this Thursday until Thursday, December 12th.

Mr Justice O’Higgins has told the fast-tracked hearing he will deliver a decision in the case first and give his reasoning afterwards.