Large firms being hit by high electricity charges: watchdog
Big business users of electricity in Northern Ireland are being charged some of the highest prices in Europe, according to a new report released today by the Utility Regulator.
Although the regulator found that both domestic consumers and 'very small industrial and commercial consumers' – which account for about 70% of the customer base – are paying around the EU average for electricity, the remaining 30% of commercial customers are having to pay a premium to the EU average.
The regulator didn't pin down a specific reason for the imbalanced price structure but offered a number of explanations.
"We suggest that market size/economy of scale issues, fuel mix at the wholesale level, energy policy (including taxation) and regulation may be drivers of regional price variances," Utility Regulator chief executive Shane Lynch said, adding that more work remained to be done.
CBI Northern Ireland director Nigel Smyth said charging higher rates to larger companies is damaging for the economy.
"Many of these large electricity users are competing globally and we need to ensure they have access to competitively priced electricity," he said.
"These companies are critical for the future growth of the economy, yet they are paying disproportionately more for their electricity, and future investment is at risk."
And he welcomed the regulator's decision to look into competition in industrial and consumer markets and to "robustly scrutinise network price controls whilst ensuring that necessary investment can be efficiently financed".
Professor John Simpson said that any investigation needs to be carried out quickly.
"The evidence is clear that Northern Ireland's big business consumers are paying more for their electricity and the sooner we get it resolved the better."
The regulator said it wants to hear from customers on the issue.
"We also recognise that regulators, policy makers, consumer representatives and the electricity industry especially all have some responsibility in helping to explain the pricing picture," Mr Lynch stated.
"For that reason we would like to facilitate a debate among interested stakeholders on this very important aspect of our energy policy and regulation.
"We therefore would welcome views on the paper by 24 May, 2013."