Utility Regulator comments on Power NI’s tariff announcement

Power NI has announced a 27.5% increase to its regulated domestic electricity tariffs. This change in tariff will come into effect on 1 July 2022.

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

“Power NI provided a submission to the Utility Regulator in April to increase their regulated electricity tariff. Following a thorough analysis of all their costs, and in consultation with the Department for the Economy and the Consumer Council for Northern Ireland, we have accepted their submission to increase their tariff by 27.5%.

“Following this increase, Power NI’s tariff for an average domestic credit customer will increase by £204 to £944 a year. From 1 July 2022, Power NI’s regulated domestic tariff will be 17% cheaper than the average standard tariffs in GB and Ireland.”

“The reason for this increase is due to the exceptional rise in international wholesale energy costs during the past 12 months. The rise in wholesale energy has been well documented, with the impact being seen in rising consumer prices across home heating oil, groceries and petrol and diesel. The wholesale cost of energy makes up around 68% of a Power NI domestic customer’s bill, which has resulted in this increase.  

“When calculating the final tariff, the forward price of wholesale energy is used. At present, the forward price continues to remain high and well above the prices we were seeing 12 months ago. For example, the wholesale cost element has increased by 105% (excluding VAT) over the last year since Power NI’s tariff was set in July 2021. However, if the actual cost of the wholesale energy turns out to be lower than forecast, the extra money collected from consumers will be returned to them in the next tariff period. This is an added protection that our regulation provides.

“We continue to see a lot of volatility in the wholesale energy markets, which makes predicting when prices will start to drop, extremely difficult. However, if wholesale prices do begin to reduce, our system of regulation in Northern Ireland allows us to act to make sure that reductions are fully passed onto consumers as quickly as possible

“I understand this is not an easy time for many customers. Help is available if you are struggling with your electricity or gas bill. I would encourage you to contact your energy supplier as soon as possible to discuss the options available to you.”

Further information on the support available to energy customers is available at www.nidirect.gov.uk/covid-19-energy-debt-advice and on the Utility Regulator’s website Energy debt information | Utility Regulator (uregni.gov.uk). The Consumer Council’s website has energy advice for consumers during these difficult times and also provides an independent energy price comparison tool to help consumers save money.

A number of agencies can provide free and independent advice, including Advice NI, Money and Pensions Service and Christians Against Poverty. The NI Energy advice line also offers free comprehensive advice on saving energy in the home and energy efficiency grants.

A briefing paper has been published. 

Media contact - Adele Boyle on 07787 279584.

Further information:

• Since 1 April 2017, the Utility Regulator no longer regulate Power NI’s tariff for small business customers as this market is now fully open to competition.
• The bill comparison with GB and RoI is based on annual consumption of 3,200 kWh and based on the average of the standard tariffs of the main suppliers in GB and RoI.
• As Power NI’s profits are fixed (at 2.2%), any over recovery (and under recovery) made due to a change in the forecast costs is passed on to consumers in the next tariff review. This is not the case for non-price regulated suppliers.
• The tariff has been modelled and forecast over a period of 24 months.