There are currently seven Generating Unit Agreements (“GUAs”) in place between Power NI Energy Limited (effectively its Power Procurement Business (“PPB”)) and electricity generators in Northern Ireland. PPB manages the GUAs on behalf of consumers and the net benefit or loss made by PPB is passed to consumers as an element of the PSO (Public Service Obligation) levy. The Utility Regulator has the power to direct cancellation of a GUA before its expiry date. Any direction to cancel a GUA early must be given at least 180 days in advance of the relevant cancellation date.
After carrying out two consultations and considering the responses received, undertaking detailed economic and sensitivity analysis and after considering all relevant policy considerations, the Utility Regulator has decided to cancel five of the seven GUAs with effect from 1 November 2012, and has given 180 days notice of its intention to do so. This decision is expected to save electricity consumers around £4m a year.
This decision paper describes in detail the process undertaken and the rationale for the decision.