Consultation on the development of a cost-reflective tariff structure

The Utility Regulator has initiated a project to review and reform the structure of electricity network use of system (UoS) charges in Northern Ireland. The structure of network tariffs plays a critical role in determining how network costs are recovered and how users interact with the electricity system.

The current tariff structures were developed in a different energy context and may no longer fully reflect the way in which users make use of the network or the costs that they impose. At the same time, the electricity system is undergoing significant change, including the potential for increased electrification of transport and heat, and growth in distributed generation. Recent developments include policy reforms to connection charging arrangements, which are expected to reduce barriers to network access and support increased electrification and uptake of low-carbon technologies.

The planned roll-out of smart meters is also a key enabler of tariff reform. Smart metering will provide access to more granular consumption data and enable the implementation of a wider range of tariff structures, including time-of-use and dynamic tariffs. It will also support electricity suppliers in offering retail tariffs that reflect time-varying costs, thereby strengthening the price signals available to consumers and increasing opportunities for demand-side flexibility. The roll-out of smart metering therefore represents an important development since our previous Call for Evidence in 2021 and is a key factor supporting the timing of this project.

These changes present a number of challenges, in particular the extent to which the current tariff structures may become less cost-reflective over time. This could lead to some users making a lower contribution to network costs compared to their use of the system, while others bear a greater share. Ensuring that network costs are allocated fairly across users will therefore be a key consideration in the review.

In addition, network charges form only one component of the overall electricity bill, alongside wholesale electricity costs and supplier costs. This highlights the need to consider how the signals and incentives provided by network tariffs operate alongside other elements of electricity pricing and wider market arrangements, and whether misalignment between them could lead to inefficient or unintended outcomes for consumers.

Where evidence supports reform, changes to tariff structures could provide an opportunity to ensure that charges are more cost-reflective, support the efficient use of the electricity network and facilitate the transition to a low-carbon energy system. 

The consultation sets out our proposed programme of work. We have posed specific questions to help focus on each aspect of the consultation; however, consumers and stakeholders are welcome to express views on any particular aspect of the consultation that they wish to.

The consultation will close at 12:00pm on 16 December 2026. 

Our preference is for responses to be submitted via Citizen Space or by email, using the response template provided along with the consultation, to Electricity_Networks_Responses@uregni.gov.uk with cc to fiona.rooney@uregni.gov.uk

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