Transmission and Distribution price control review for NIE plc

Electricity regulator Douglas McIldoon today said that the current review of NIE’s Transmission and Distribution Price Control must address the problem of the continuing divergence of Northern Ireland’s electricity prices from those in Great Britain, the Irish Republic and the rest of the European Union.

Commenting after publishing a further consultation paper which sets out the issues which he believes need to be addressed, Mr Mclldoon said;

“The problems caused by high generation costs, which I am addressing separately, must not be allowed to distract our attention from the fact that T&D prices In Northern Ireland are higher compared to everywhere else.”

Since privatisation, the cost of moving a unit of electricity through NIE’s wires has increased from 17 percent above the GB average to 44 percent above it.

Continuing Mr Mcldoon stressed that the current price control presented NIE with the opportunity to be creative and innovative in meeting the needs of shareholders and customers:

“Incentive regulation will only work If companies are given opportunities to make and retain profits by being Innovative in the way that they deliver services. However customers want and expect the problems which arise from high relative prices to be solved. In solving that problem NIE has opportunities to explore ways of delivering its services, planning its networks and financing its investments which will align the interests of customers and shareholders more effectively than they have been up to now.”

Responses and views are invited from all those with an interest In the issues, Including customers, their representatives and other interested groups, as well as the company. They should be sent by 28 December 2001 to Mary McWIlliams at the OFREG address or via e-mail to mary.mcwilliams@ofregni.gov.uk

The paper can be downloaded by using the link below, paper copies are also available from

OFREG,
Brookmount Buildings,
42 Fountain Street,
Belfast
BT1 5EE

Tel. 028 9031 1575

Fax. 028 9031 1740.

Notes for Editors

This paper is the sixth in the consultation process to establish a new price control for NIE"s Transmission and Distribution business for the period commencing 2002. lt presents the issues that OFREG will have to consider in formulating the new price control.

The paper does not present Initial Proposals for the Price Control. These will be the subject of the next paper which will be published once the responses to this consultation paper have been received and considered. Publication of the Initial Proposals paper is anticipated by the end of January 2002.
For further information or to arrange an interview with Douglas McIldoon, please contact Nick Carson on 028 9127 5965 or 07711 482807