The Utility Regulator today announced its plans to help business customers benefit more from competition in the electricity supply market in Northern Ireland. This is one of the main messages from the Regulator’s report following its inquiry into business electricity tariffs in Northern Ireland.
The inquiry was prompted following complaints by business customers who experienced a rise in their electricity bills after a Public Service Obligation (PSO) rebate ended in October 2009. From the 57,000 business customers, 17 forwarded written complaints to the Regulator and the Department of Enterprise, Trade and Investment.
Key findings of the report were:
• communication to customers on changes to their tariffs from October 2009 (specifically in regard to the PSO rebate) was unclear or not timely;
• comparing quotes between electricity suppliers is not always straightforward for customers:
• some customers find their electricity bills difficult to understand and missed the information about the rebate ending;
• there is evidence that customers do not fully understand the risk management options available to them:
• there is evidence that competition is developing and from the introduction of the Single Electricity Market in 2007, the number of customers switching suppliers has increased, however it is still relatively immature;
• of the 17 customers involved in the inquiry, five only received one quote; and
• 66% of business customers still remain with the incumbent supplier (NIE Energy).
Commenting on the publication of the report, Shane Lynch, Director of Electricity at the Utility Regulator said:
“We have listened carefully to what business customers told us.
“Whilst the electricity supply market is still relatively immature, there are encouraging signs that competition is developing, particularly since the introduction of the single electricity market in 2007.
“The inquiry has shown us that some customers need to be better informed to take full advantage of the developing market. The market needs active suppliers and well informed customers to reach its full potential.
“We will meet with suppliers at the earliest opportunity to discuss how the operation of the market can be improved. Furthermore, we intend to continue our dialogue with business customers to help introduce improvements that meet their needs.”
The Regulator’s report identifies several actions for enhancing the electricity supply market:
• develop a single source (website) for information on electricity tariffs;
• encourage suppliers to improve the clarity of their billing and quotation information;
• produce a buyer’s guide as a tool for businesses to choose their electricity supplier more effectively;
• more regular briefings with business customers by the Regulator; and
• increase monitoring of the electricity supply market by the Regulator.
ENDS
For further information, contact Adele Boyle on 028 9031 6343 or 07794 965922.
Notes to Editors
1. The Utility Regulator (Northern Ireland Authority for Utility Regulation) is the independent non-Ministerial Government Department responsible for regulating the electricity and gas industries and water and sewerage services in Northern Ireland.
2. The electricity tariffs inquiry was announced on 11 November 2009, following concerns raised by business customers. The inquiry involved interviews with all 17 business customers that had complained and four suppliers.
3. The inquiry focused on:
• Distribution of and communication from electricity suppliers to business customers in regard to the £100million PSO rebate.
• Hedging arrangements offered by electricity suppliers to business customers and the extent of uptake.
• Transparency and understanding of the underlying costs incurred by electricity suppliers.
• Considered the scope and merits of re-profiling the forecast PSO levy.
• Additional issues raised during the inquiry were competition and regional comparisons.