Utilita Energy Ltd, R (On the Application Of) v Secretary of State for Business, Energy And Industrial Strategy

In judicial review of regulatory policy, a court will not treat a decision as irrational merely because the decision-maker could have consulted, sequenced or balanced matters differently. Consultation is adequate where the proposal is sufficiently clear when read fairly and in context. A public authority must have regard to equality, consumer and environmental considerations in substance, but the duty does not require a particular outcome. A policy preference is lawful if the decision-maker remains open to the merits of the individual decision. Relief may be refused where it is highly likely that the outcome would have been substantially the same, or where granting relief would serve no purpose.

The claimant, an energy supplier, sought judicial review of three government decisions concerning the enrolment or replacement of first-generation smart meters and the date after which certain meters would not count towards roll-out targets.

The First Decision required eligible SMETS1 meters to be enrolled with the Data Communications Company within 12 months of eligibility and required unenrolled meters to be replaced with SMETS2 meters by the end of 2020. The Second Decision fixed 15 March 2019 as the end date for pre-payment SMETS1 meters. The Third Decision required the DCC to provide services for the claimant’s Secure SMETS1 meters.

The issues included rationality, consultation, environmental considerations, equality and statutory duties, cost-benefit analysis, predetermination and property rights.

1. The claim was dismissed. The court granted permission to re-amend the claim form, but refused permission to apply for judicial review of the Third Decision because there were no arguable grounds.
2. The First Decision was not irrational, discriminatory or otherwise unlawful. Secure meters were materially different from the four cohorts considered earlier because the government lacked sufficient technical and commercial information to consult on them. The government was entitled to consult separately and in a different sequence.
3. The consultation on the replacement duty was adequate. Read fairly, as a whole and in context, the reference to replacing any unenrolled SMETS1 meter with an SMETS2 meter by the end of 2020 clearly included Secure and EDMI meters.
4. The government had regard to environmental impacts. The decision-making material recognised both the environmental benefits of interoperable smart meters and the risk of replacing meters before the end of their working lives. Even if there had been a breach, no remedy would have been granted because the later lawful Third Decision enabled Secure meters to be enrolled.
5. The duties under Equality Act 2010 section 149, the Gas Act 1986 and the Electricity Act 1989 required regard to specified matters, not a particular result. The materials showed substantive consideration of equality, consumer, environmental and vulnerability issues. Relief would in any event have been refused under section 31(2A) of the Senior Courts Act 1981 and under ordinary public-law discretion.
6. The cost-benefit analysis disclosed no arguable public-law error. The government could take account of avoided replacement costs because the replacement obligation was lawful. It was not legally required to reallocate core DCC costs already considered in relation to the other cohorts.
7. The consultation was not predetermined. A decision-maker may have a predisposition in favour of a policy, provided the individual decision remains open and is considered fairly on its merits.
8. The A1P1 and common-law property-rights ground was not determined because the claimant pursued it only if the Third Decision were quashed, and that condition was not met.