Belfast Telegraph

Wednesday 22 October 2014

£30 added to electric bill by broken power line

Northern Ireland householders are paying more for electricity because of a broken link between here and Scotland that may take months to fix.

Until recently, over 30% of our electricity was being imported from a cheaper Scottish source via the Moyle interconnectors.

But in July, one of the interconnectors developed problems, cutting capacity in half. Then, in August, the second broke down.

An industry source says that fixing them requires specialist teams, because of their deep sea location, but the repairs will hopefully be completed by 2012.

Economist John Simpson said the breakdown has resulted in Ulster's electricity consumers paying £30 extra per home a year, resulting in average annual bills of around £600.

Mr Simpson said the electricity market in Northern Ireland must be fixed urgently to address the problem of higher prices.

"We need the investment in the grid, we need an all-island single electricity market working to use electricity from the cheapest generators and we need to exploit the benefits of interconnection with Scotland, as well as the new Irish interconnector with Wales."

Earlier this month, Power NI and rival Airtricity hiked its tariffs by 18.6% bringing the cost of a unit of electricity to almost 17p.

A five-year proposal to upgrade the ageing electricity grid could mean a price hike of 12.5% to pay for it - on top of any hike caused by rising wholesale energy costs.

Already, 44% of local homes are defined as being fuel poor, which is when 10% of income is spent on heating and lighting.

With weather forecasters predicting another bitter winter, concern is rising that many more households will fall into fuel poverty due to rising energy bills.

The average household annual consumption is 3,300 units.

That means Power NI customers paying a standard direct debit rate of 16.93p per unit could expect to spend £559 on electricity (including VAT).

At Airtricity, where the best unit rate is 15.32p (rising to 16.39p in year two), the bill would come to £506, going up to £541.

Two months ago, competitor Budget Energy also entered the domestic electricity market, offering one set price per unit of 12.42p for standard customers.

The company admits that tariffs will rise in the autumn, but an annual bill priced at the current direct debit rate works out at £410 - £149 cheaper than Power NI.

Managing director Eleanor McEvoy said the firm's ability to offer lower tariffs than its competitors was sustainable.

Mr Simpson said there is no reason why higher prices in Northern Ireland, compared to the rest of the UK, should not be reduced.

He stated: "We need to ensure that the regulator incentivises the energy companies to invest adequately, then the market should give better answers."

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