Belfast Telegraph

Friday 22 August 2014

Regulator report met with firm criticism

Manufacturers have offered a scathing criticism of an investigation into electricity pricing released yesterday by the Utility Regulator.

Northern Ireland Manufacturing, which represents 400 firms said it was disappointed with the conclusions of a report into how an October hike in energy costs was communicated to customers.

The regulator’s report found the four electricity suppliers to businesses did not clearly |inform customers the hike |was coming after the end of a rebate on the Public |Service Obligation component of bills. Some large users saw their bills spike by as much as 40%, although they had fallen up to 30% nine months earlier when the rebate started.

Chief executive Bryan Gray said the report did not go far enough and that excessive energy costs would impair |the ability of the Executive to attract energy intensive |investment to Northern |Ireland.

“The report does not reflect the depth of concern in the business community about the level of energy charges here,” he said. “We are disappointed that the regulator has not attempted to quantify or provide any rational explanation for the huge disparity between energy prices here, in Great Britain and our European neighbours.

“Neither does he appear to be developing any strategy for reducing the difference. Our research shows that manufacturers in Northern Ireland are paying between 50% and 75% more than in Britain and over 50% more than in the US. Until this differential is reduced it will continue to prejudice the competitiveness of local companies and eliminate opportunities for inward investment.”

Electricity director Shane Lynch told a briefing of journalists that the regulator had not looked into regional comparisons, but said it would |be difficult to accurately compare the all-Ireland electricity market with that of Great Britain because it is 10 times larger.

The watchdog did agree that greater competition may help bring prices down locally.

Mr Lynch said there is evidence competition is developing since the introduction of the Single Electricity Market in 2007, but the market is still immature, with 66% of the province’s 57,000 business customers remaining with NIE Energy Supply.

By volume of electricity used there is a better split, with Energia taking a 34% share, ESBIE 28%, NIEES 24% and Airtricity 11%. The report also said many customers did not have a good understanding of how the electricity market works and found comparing quotes difficult because bills did not follow a standard template.

The regulator plans to develop a website for information on electricity tariffs, produce a buyer’s guide to help businesses choose their electricity supplier and ask suppliers to clarify bills and quotes.

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