Utility Regulator Consults on SONI Price Control

The current SONI price control expired at the end of October 2007. The current control is an extension of the 2004 price control. The new price control is being introduced at the beginning of a period of change in the Northern Ireland electricity industry with the introduction of full retail market opening and the new wholesale arrangements of the Single Electricity Market (SEM).

This paper, deals with one element of the final SSS tariff formula (BTSOt term) and essentially sets the Total Revenue SONI can recover from customers for the duration of the control period. The Allowed Revenue will consist of operating costs and allowances for capital expenditure and depreciation on the asset base together with a reasonable return for investors on those assets and any new assets acquired throughout the price control period.

Responses are invited on any of the issues raised in this paper and in particular on:

• Form, scope and duration;

• Proposed Operating Costs adjustments;

• Capital Expenditure;

• The Regulatory Asset Base;

• Depreciation methodology;

• Weighted Average Cost of Capital;

• Total Allowed Revenue;

• The X Factor;

And

• Incentive Mechanism.

Please also suggest any alternative relevant measures/actions.

Responses to this consultation paper should be sent to:

Andrea Heaney
Queens House
14 Queen Street
BELFAST
BT1 6ER
E-mail: andrea.heaney@niaur.gov.uk

By Friday 11th January 2008.

Unless marked as confidential all responses will be published.

Copies of this document will be made available in large print, Braille, audio cassette and a variety of relevant minority languages if required.

Notes for Editors

The Utility Regulator is the informal name for the Northern Ireland Authority for Utility Regulation (NIAUR) the regulator of the Electrcity, Gas and Water and Sewerage industries in Northern Ireland. NIAUR’s powers are derived from the Electricity (Northern Ireland) Order 1992, the Gas (Northern Ireland) Order 1996 as amended by the Energy (Northern Ireland) Order 2003 and the Water and Sewerage Services (Northern Ireland) Order 2006.

For further information contact:-

Conall McDevitt, Weber Shandwick Tel: 028 90764911, 07770 886933