Belfast Telegraph

Thursday 10 July 2014

Regulator and supplier under fire from economist over electricity price rise

The Utility Regulator has been challenged to reveal the figures used to calculate the new electricity price rise.

Shane Lynch yesterday claimed the electricity increase of 18.6% - which will come into effect in October - was less than Power NI had originally requested.

He said the energy company "were seeking an even bigger increase" than the 18.6% he approved.

But economist John Simpson said both Power NI and the Utility Regulator had based their calculations on dated figures, and said in order to win back public confidence they should reveal their workings out and the original price hike that was proposed.

"I would criticise both the regulator and Power NI for the starting point they did their calculation from," he said.

"There's no sign they have actually looked at the immediate - and by that I mean this year's - profitability of Power NI and seen whether that's down or up or profitable. This announcement is based on comparisons going back two years and it maybe would have given more of an accurate answer to look at this year's.

"I would criticise them both for not doing their figures."

He further challenged the Utility Regulator by adding: "He (Mr Lynch) does say this increase which he has approved is smaller than the one they first asked for, but we only have his word for that.

"It would be helpful if he told us what the figure was he turned down.

"There's an issue for both the regulator and Power NI in that if they really want the public to have confidence in them, they need to be able to demonstrate how they got the answer they came up with."

The Utility Regulator is the body responsible for monitoring Northern Ireland's electricity, gas, water and sewage industries.

It is an independent, non-ministerial Government department which is accountable to the Assembly.

It is governed by a 10-strong board of directors headed up by Mr Lynch as CEO.

The department's board is made up of former leaders in the utility industry, with backgrounds in water, electricity and gas.

Mr Lynch became CEO in January, after spending almost two years as director of electricity.

He has worked in the electricity industry for 27 years, including as an engineer for NIE, and managing director of Belfast West and Kilroot power plants.

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