The Electricity Regulator, Douglas McIldoon has welcomed NIE’s decision to accept his revised price control proposals for the company’s Transmission and Distribution business.
“Provided no additional costs are imposed on the industry, customers will see a reduction each year in their electricity bills,” said Mr McIldoon.
“By 2007 the cost of distributing electricity in Northern Ireland will have fallen - in real terms - by 45%. However, the major breakthrough is the incentive which NIE will have to reduce the Northern Ireland electricity bill.
“This price control - which is a brave experiment by both NIE and Ofreg - will release all the skills, talent and enterprise of NIE and put them at the service of its customers much more effectively than they have been in the past. I look forward to developing this approach with the company.
“NIE - whose Supply business has already done so much pioneering work - now has a regulatory framework which should enable it to become the most creative, exciting and successful electricity company in the British Isles. I believe it has the capability of rising to that challenge.”
Notes for Editors
NIE’s T&D business is subject to periodic price controls. The proposals referred to in this release cover the period 1 April 2002 to 31 March 2007.
Using a 1999/2000 price base, the cost of moving a unit of electricity through the NI network fell from 2.7p in 1992/3 to 1.92p in 2001/2 and will have fallen to 1.48p in 2006/7. This is a fall of 45%.
Over the 15 years since privatisation average prices in GB will have fallen from 2.23p to 1.23p in 2004/5.
The T&D charge accounts for about 40% of the average domestic bill. Most of the rest is accounted for in generation costs.
The availability element of generation costs has fallen by 32% between 1992 and 2001/2. Fuel costs however have risen by 25% offsetting the fall in generation costs,
Generation efficiency at 30% is low. It will increase next year with Ballylumford’s CCGT and by 2004/5 should be about 50% higher than today.
The special features of this price control are:
NIE will be incentivised to reduce total system costs leading to further savings to customers;
NIE will be incentivised to promote energy efficiency which will both reduce customers’ bills by avoiding the need to purchase as much electricity and protect the environment.
For further information or to arrange an interview with Douglas McIldoon, please contact Nick Carson on 07711 482807 or 028 9127 5965