Power NI defends 18% price hike
Company boss admits supplier's customer base is 'eroding'
POWER NI has defended an almost 18% rise in customer bills, blaming it on a 70% increase in gas prices in March and problems with an undersea power cable.
Managing director Stephen McCully told the Enterprise, Trade and Investment committee that while prices were back to what they were in 2011, they were still over 11% lower than in 2008.
This week Budget Energy became the third energy company in Northern Ireland – behind Power NI and Airtricity – to announce a 17.8% rise in bill prices as of July 1.
Power NI remains the biggest energy provider in Northern Ireland but Mr McCully admitted that "the customer base is eroding".
He said that some of the specific costs related to the price rise are generation costs and the Moyle Interconnector – a power cable between Scotland and Co Antrim designed to deliver cheaper electricity, but which has been running at half power since 2011.
"Generation is a major contributor to the price rise and world fuel prices are the main factor," he said.
"Gas prices have driven the most recent increase, and the increase in gas prices this calendar year peaked in March with a 70% increase in natural gas prices.
"The shortfall from the last two financial years represents £32m and £12m for Power NI.
"We are going back to 2011 prices but with that increase prices in 2013 will still be more than 11% lower than they were in 2008 at the start of the recession and are still 17% lower than in the Republic of Ireland."
Last week, Utility Regulator Shane Lynch told the committee that according to research, consumers here are paying a fair price for power which is average across the EU.
In March, the Regulator published the first element of new research conducted into comparative electricity costs in Europe for industrial and commercial users.
However, he said that while Northern Ireland domestic and small business consumers were paying an average price for electricity, large business customers paid among the highest prices in Europe.
Energia also gave evidence to the committee.