RP7 Draft Determination

On the 28 November 2023, we published a consultation for our Draft Determination for the RP7 price control for NIE Networks.

NIE Networks is responsible for building and maintaining electricity transmission and distribution networks, which allows consumers to access a secure supply of electricity. As a natural monopoly, NIE Networks is subject to economic regulation which provides protection for all electricity consumers in terms of quality and cost. 

The amount of revenue which NIE Networks collects via supplier tariffs is determined by the Utility Regulator through periodic price control reviews following scrutiny and challenge of the company’s business plans. 

RP7 is our seventh regulatory price control for NIE Networks, which will run from April 2025 to March 2031.

John French, Utility Regulator Chief Executive explains further: 

“RP7 is creating the foundation for Northern Ireland’s journey towards net zero and will facilitate a more efficient use of the electricity system. 

“Our decisions within this draft determination will ensure NIE Networks is fully able to support the energy transition in Northern Ireland. Whilst this additional investment will increase the network cost for electricity consumers, we will ensure that the transition is affordable, fair and inclusive for all.” 

Our proposals within the Draft Determination include: 

  • Overall total expenditure of £2.21 billion, which is a 16% reduction on NIE Networks’ request of £2.55 billion. Major transmission investment (D5 projects) is not included in the comparison. 
  • A total of £1.349 billion for capital expenditure, which includes investment in the distribution and transmission networks and metering work. 
  • Bills for typical domestic consumers who don’t change their usage or adapt to green technologies, will be £13 lower under our proposals than NIE Networks’ RP7 Business Plan. 
  • Domestic consumers who do increase their electricity usage and install heat pumps or use a home charger for an electric vehicle, will see their electricity costs increase. However, this additional electricity cost will be offset by a reduction to their home heating and transport costs. 

  • Dependent on usage and based on our estimates,  small businesses could see a 3%-9% increase to the network element of their bill, whilst large energy users could see an 11%-19% increase on the network element of their bill. 

  • We have updated our measure of inflation to CPIH (Consumer Prices Index including owner occupiers' housing costs) as we consider this is a better reflection of actual impact on consumers.

  • A rate of return of 4.79% including gearing of 55%. The proposed gearing addresses the potential imbalance between equity and debt returns.

We have published an ‘Overview of the Draft Determination’ that provides a non-technical summary of RP7 and our proposals. 

An ‘Executive Summary’ is also available which provides an overview of our draft decisions. 

Our draft determination is open for consultation until 22 March 2024.