Published Thursday, 26 July 2012
NIE says it needs to carry out a major upgrade on its electricity network. (© UTV)
The regulator has proposed NIE could make an investment of £600m to maintain a high level of network reliability including operating costs but NIE estimates a cost of approximately £1 billion for the upgrade.
The regulator is consulting with NIE to try and control costs prices so that the cost of work to be carried out on improvements will not inflate consumer prices.
The lack of agreement has led to ratings agencies including Fitch issuing a warning to traders stating that NIE could become a risky investment.
A Utility Regulator spokesperson said: "Our principal statutory objective is to protect consumers, but in so doing, we must have regard to the need to secure that the company is able to finance its activities.
"We note that Fitch has not downgraded NIE T&D (Transmission and Distribution) and that they are awaiting the conclusion of the regulatory process.
"The proposals in our draft determination on NIE T&D's price control are focused on protecting consumers both now and in the future.
"Consumers deserve to have a modern high performing electricity network which will accommodate renewables, at a reasonable cost. Our proposals are designed to achieve all of this."
UTV Business editor Jamie Delargy says that the potential credit downgrade itself would not necessarily affect customers however.
"If the credit rating is downgraded it will cost NIE which operates the network, it will have to pay more to borrow money in the bond market," he said.
"What that means is if it has less money because it has to pay extra to the bond market, it will have less to pay to shareholders."