RP5 Competition Commission referral

On 30 April 2013, we referred the NIE RP5 price control licence modifications to the Competition Commission.

A Utility Regulator spokesperson said:

“Towards the end of last year, Northern Ireland Electricity (NIE) rejected our price control determination (known as RP5) for the next five-year period.  Consequently, we have today referred this matter to the Competition Commission for its determination within six months.  This determination will be final and binding. 

We will now assist the Competition Commission with its investigation and we expect that it will also seek views from other interested parties.”

NIE owns the electricity network in Northern Ireland.  Charges for the use of this network typically account for 20-30% of electricity bills.  Given that this business is a natural monopoly, the Utility Regulator sets price controls to protect consumers whilst ensuring that NIE can efficiently finance its licensed activities.

Update May 2013

On 1 May 2013, the Competition Commission issued a news release inviting comments of the price control determination from interested third parties by 31 May 2013.

Update November 2013

Following a period of detailed analysis, numerous submissions and face to face meetings, the Competition Commission issued its Provisional Determination for the NIE RP5 price control on 12 November 2013.  This publication was followed by a public consultation period, having a deadline for responses of 29 November 2013.

Update April 2014

The Competition Commission issued its Final Determination to us and this was published on 15 April 2014.  Commenting on the Competition Commission’s final determination, Utility Regulator Chief Executive, Jenny Pyper said:

“We welcome the publication of the Competition Commission’s final determination.

This final determination will deliver over £1 billion of investment by NIE at no additional cost to consumers.

It also underlines the importance of our rigorous scrutiny of the NIE T and D price control and provides certainty and clarity regarding the regulation of NIE T and D going forward.  It also gives us, as the energy regulator, additional regulatory tools which are consistent with those available to other regulators across the UK.

We have already started constructive engagement and dialogue with NIE on the implementation of the Competition Commission’s final determination.”

Update on the Competition Commission (CC)

The CC is now part of the new Competition and Markets Authority (CMA).   You can find out more about the CMA and what the new organisation does on their website.