The Utility Regulator today announced that it has issued a formal notice of intent to cancel two power generation contracts (called Generating Unit Agreements - GUAs) between Kilroot Power Limited and Northern Ireland Electricity (NIE) plc with effect from 1 November 2010. The GUAs have been in place since the privatisation of NIE in 1992.
The announcement follows two separate public consultations carried out by the Regulator over the last year, the most recent of which concluded last month.
Commenting on the Regulator’s announcement, Iain Osborne, Chief Executive said:
“We have carried out a considerable amount of analysis and consulted extensively to make sure that our decision on the future of these power generation contracts is the right one for consumers.
“Cancelling the contracts will have the beneficial effect of exposing the two units directly to the Single Electricity Market, which will boost effective competition in the wholesale market across the island.
“We are confident that the cancellation will benefit consumers and play a role in reducing electricity bills in the future.”
ENDS
For further information, contact Adele Boyle on 028 9031 6343 or 07794 965922.
Notes to Editors
• 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.
• The first consultation paper was issued on 25 November 2009 which set out the initial thoughts on the type of issues and factors the Utility Regulator believed would or should inform its decision making process in relation to the GUAs, and also to obtain the views of market participants and interested parties. 10 non-confidential responses were received.
• Following consideration of the all responses, carrying out detailed economic analysis and sensitivity analysis into the financial position of the GUAs, and after considering all relevant policy considerations, the Utility Regulator published a second consultation paper on 29 March 2010 with its ‘minded to’ decisions in relation to cancellation. Nine responses were received.