The principal objective of the Utility Regulator (UR) in relation to gas is “to promote the development and maintenance of an efficient, economic and co-ordinated gas industry in Northern Ireland” while having regard to “the need to ensure a high level of protection of consumers of gas”.
To help meet this objective we retain price controls on dominant, former monopoly, gas suppliers. The two price-regulated gas supply companies are:
SSE Airtricity Gas Supply (NI) Ltd (SSE Airtricity) in the Greater Belfast area
firmus energy (Supply) Ltd (firmus) in the Ten Towns area
We do not retain price controls on firmus energy in the Greater Belfast area.
The current SSE Airtricity price control lasts for a period of five years from January 2012 to December 2016. This control can be found on our website.
The current firmus price control runs from April 2015 to December 2016. This control can be found on our website.
Both SSE Airtricity and firmus energy supply limited submit their proposed supply operating costs which are those costs which relate to the day to day operating of the supply business to the UR. These costs are thoroughly scrutinised and the appropriate level of operating costs are approved by the UR. The UR also sets the allowed margin for both SSE Airtricity and firmus Ten Towns i.e. the level of profit which they are allowed to make. The current scope and customer coverage means that the current price-regulated threshold is for customer using less than 25,000 therms (732,500kWh) per annum. This is typically domestic properties and small to medium sized businesses.
We are currently finalising the final determination for the latest price control for SSE Airtricity and firmus which will run from April 2017 for SSE and January 2017 for firmus.
The consultation on this latest control was published in June 2016.
The paper presented our proposals for the price controls for SSE Airtricity and firmus. There was also a proposal for removing the price control on those using between 2,500 and 25,000 therms (73,200 and 732,500 kWh) per annum known as EUC 2, typically small to medium sized industrial and commercial properties for SSE Airtricity.
The final decision paper is due for publication in November 2016.
Protecting customers is at the heart of the Utility Regulator’s role and ensuring that customers pay the correct price for energy from the price regulated gas is a core part of our work. We do this in consultation with the Department for the Economy and the Consumer Council.
We scrutinise the tariffs submitted by SSE Airtricity for the Greater Belfast area and firmus for the Ten Towns area to ensure that the maximum average price approved is not more than the sum of the costs allowed under the price control determination. This ensures that customers pay no more than the costs of purchasing and supplying gas plus a pre-determined allowance for the operating costs of the business and an agreed profit margin.
The most recent tariff reviews were published in February 2016 and took effect in April 2016. The maximum average price for SSE Airtricity’s domestic and small business customers in Greater Belfast decreased to 101.01 pence per therm from 1 April 2016, an average reduction of 10.2%. For firmus supply the maximum average price for domestic and small business customers in the Ten Towns area decreased to 115.51 pence per therm from 1 April 2016, an average reduction of 7.7%.
We continue to monitor wholesale costs on a monthly basis and will act as appropriate.