Customers to pay £2.8m legal bill after Northern Ireland Electricity's failed appeal
Electricity giant's challenge to watchdog's ruling on spending costly
Electricity customers here will have to hand over £2.8m after Northern Ireland Electricity (NIE) lost a two-year wrangle over the amount it wants to spend on upgrading infrastructure.
NIE previously rejected a decision by the Utility Regulator that the company could only spend £1bn on improving infrastructure, such as telegraph poles and pylons.
But NIE wanted to spend £1.3bn between 2012 and 2017 – meaning customers' bills would go up by £57 over three years.
The Competition and Markets Authority (CMA) yesterday backed the regulator.
It said NIE will now invest £1bn under a spending plan that will result in bills coming down by £10 per customer by the end of September 2017.
The Consumer Council said this would "bring some comfort" to users.
NIE must also refund customers for any extra costs it charged since 2012 when the debate over spending on infrastructure began.
It's understood that any refund will be factored into bills from next year.
Utility Regulator chief executive Jenny Pyper said: "This final determination will deliver over £1bn of investment by NIE at no additional cost to consumers."
But the CMA said NIE could recoup £1.4m of its legal bill from its customers. And the total amount that could be clawed back by all three bodies from electricity customers – the CMA, NIE and the regulator – comes to £2.8m.
A spokeswoman for NIE, which has a monopoly on transmission and distribution of electricity, would not comment on how costs would be reclaimed.
The company said: "We now look forward to working closely with the Utility Regulator in implementing the commission's decision."
It's expected the costs will be met from the fixed 'network' element of the typical electricity bill, which makes up around 20-25% of the tariff.
It's understood NIE will negotiate with the Regulator on how costs will be clawed back, with input from the Consumer Council.
Stephen Kelly, chief executive of Manufacturing NI, said the conclusion demonstrated that NIE's early plans for the bigger spend on infrastructure "do not represent value for money for consumers and NIE's customers".
Electricity costs were a pressing issue for companies, he said.
"Our manufacturing employers endure the second most expensive electricity in Europe and this damages our ability to compete for work, attract investment and creating or sustaining jobs right across Northern Ireland."
He said businesses and families deserved affordable electricity and called on the Department of Enterprise, Trade and Investment to challenge the cost of generation, which accounts for up to 70% of bills.
Aodhan O'Donnell, interim chief executive of the Consumer Council, said that consumers would be glad to see the lengthy wrangle between the Regulator and NIE process was finally at an end.
"The cost of energy is the number one concern for both domestic and business consumers who expect the lowest possible price for their electricity but also need assurance that the lights won't go out.
"Consumers should be reassured that NIE's spending plans have been scrutinised not only by the NI Regulator but also by the Competition Commission."
NIE had said it needed the additional money to bring its ageing infrastructure up to date.