NIE rejects regulator's price control

Published Tuesday, 20 November 2012
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A major row between Northern Ireland Electricity and the Utility Regulator is expected to be referred to the Competition Commission after the company rejected spending controls on a network upgrade.

NIE rejects regulator's price control
The row is now likely to be referred to the Competition Commission. (© UTV)

NIE, which owns and operates the electricity network, said in a statement on Tuesday it cannot accept proposals from Utility Regulator Shane Lynch which will determine how much it can charge customers in the future.

The Utility Regulator had proposed in its RP5 strategy that NIE could invest £400m to upgrade their network, but NIE has been seeking almost double that, which would force prices up for homes and businesses.

NIE is also smarting from a plan by the regulator to claw back £32m because of overcharging. The network operator does not accept that it has overcharged customers.

NIE and the Utility regulator have been in ongoing negotiations since the summer and the operator said they had not taken the decision lightly. They said they had made the case for a price control that would "provide an adequate service to its customers" and "finance its activities effectively".

"The final determination does not come close to achieving that objective," spokesperson for NIE said.

The allowances proposed by the Utility Regulator fall substantially short of the amounts required to enable NIE to meet its statutory and licence obligations and to carry out the necessary programme of work for RP5 to deliver the level of service customers expect.

NIE spokesperson

The NIE spokesperson concluded: "Moreover, the Utility Regulator's proposals rely on regulatory arrangements which depart from the well-established system of regulation for network utilities that applies in the rest of the UK, notably in respect of their emphasis on ex post assessments and retrospective adjustments."

Responding to NIE, a spokesperson for the regulator said: "We note the NIE response to our price control determination and associated licence modifications.

"The consultation on the licence modifications closes later today. We will take account of the NIE response, along with any other submissions that we receive, and our board will decide on next steps."

© UTV News
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