Utility Regulator comments on Power NI’s tariff announcement

Following our regulatory review of Power NI’s tariffs, the company today announced a change to its domestic consumer bills.

While our review identified a need for a significant increase to Power NI’s tariffs (60.5%) - due to significant increases in wholesale electricity costs - the UK Government’s energy price guarantee (EPG) scheme will automatically apply a discount to those tariffs from 1 November 2022. This discount will more than offset the increase identified by our tariff review, meaning that Power NI’s customers will see a net 10.4% decrease on their bills. This is a saving of £98 per annum for a typical customer.   

Commenting on the announcement, John French, Chief Executive of the Utility Regulator said:

“Regulated suppliers in Northern Ireland are required to seek our approval before they change their tariffs. Our scrutiny of Power NI’s tariffs identified a need to increase their tariffs because of skyrocketing wholesale prices. The increase also reflects the fact that the company has not changed its tariff since July 2022 and had built up a large under-recovery of revenue at a time of ongoing volatility in wholesale prices.

“However, this is the first regulated tariff review in the context of the UK Government’s EPG scheme. This scheme reduces the amount consumers will be charged per unit of gas or electricity for two years, effective from 1 November 2022. This significant support by the UK Government will mean that Power NI’s customers will actually see a reduction in their bills from 1 November 2022. 

“This means that, from 1 November 2022, when the new tariff takes effect, the average domestic Power NI credit customer (with the EPG applied) will pay £847 a year, compared to the GB average standard tariff (£1,369 per year) and the RoI average standard tariff (£1,634 per year).

“This means that the typical Power NI customer bill will be 38% lower than the equivalent in GB and 48% lower than the equivalent in the RoI.

“Further tariff reviews for all suppliers are likely, given the ongoing volatility of wholesale prices and the effect of changes to the EPG discount. The latter to be announced by the UK Government every three months going forward.

“Separate to the EPG support, we are working with the UK Government and local energy suppliers to ensure that the £400 Energy Bill Support Scheme payment is paid to Northern Ireland consumers as soon as possible.

 “At a local level, we will continue to use everything in our regulatory toolbox to support consumers. I continue to remind energy suppliers of the requirement that they adopt a sympathetic approach to customers’ ability to pay, and of their obligations to avoid customer disconnections and consider other approaches to protecting people in debt.

“We are also working with suppliers and the Consumer Council on a series of practical commitments, called an Energy Charter, to protect consumers over the coming months.

“Consumers who are worried about the impact of these higher prices should always contact their electricity or gas supplier in the first instance, to make them aware of their circumstances, and discuss the options available to them. In addition, there are also a number of agencies who can provide free and independent advice to households, including Advice NI, Christians Against Poverty and Money and Pensions Service’s MoneyHelper.”

A briefing paper has been published. 

Media contact - Greg Irwin, 07794 965911.