NIAER Comments on NIE Tariff Increases

08 March 2005

Commenting on the NIE tariff announcements NIAER Chairman, Douglas McIldoon, said;

“While any price increase is regrettable, NIE has done well against a background of high fuel costs in holding the price increases well below the average increase in the UK. This outcome has been helped by a very welcome DETI contribution to the energy efficiency component in the tariff.”

The price differential with Great Britain is now almost entirely attributable to the excess costs of the privatisation generation contracts and efforts to address those excess costs are continuing. Despite this, electricity costs are 23% in real terms less that at privatisation and environmentally the electricity that customers consume this coming year will be the cleanest ever.

Notes for Editors

1. The average price per unit for a domestic customer reached a high point of 10.29p in April 1996. This year’s price increase brings it back to 9.95p. These prices are actual. Allowing for inflation this is a 29% real price drop. The real drop since 1992 is 23%.

2. Coal prices have increased by circa 70% since 1999 and gas prices more than doubled. These price increases have been partially offset by more efficient fuel efficiency in the CCGT’s.

3. In 2005/06 about 7% of the electricity consumed in Northern Ireland will be from renewable sources. This is a five-fold increase since the beginning of the decade.

4, Expenditure on energy efficiency in 2005/06 will increase by about £1m over the current year.

5. Market opening this year will give all non-domestic customers the right to switch suppliers. The cost of market opening this year is £4.8m and is built into the tariffs.

For further information contact Terry McErlane at Weber Shandwick Telephone 028 90761007 or 07770886911