Northern Ireland

Shane Lynch welcomes Competition Commission's NIE ruling

Media captionNIE wants to increase bills to invest in the electricity grid

NI's former utility regulator has described the Competition Commission's decision to prevent a major price rise by NIE as a "big vote of confidence" in the Utility Regulator.

NIE controls the power grid in Northern Ireland and its charges account for about 20% of a typical household electricity bill.

It wanted to raise bills by about £25 a year, up to 2017.

The commission ruled the increase should only be around £5 a year.

That means the commission has largely backed the position of the regulator which said that Northern Ireland Electricity's (NIE) plan to substantially increase the amount spent on infrastructure would be unfair to consumers.

NIE's plans led to a long-running dispute during which it was strongly critical of the regulator.

Shane Lynch was the regulator during that period and has recently left the role.

In a statement on Friday, he said: "Although there will still be some debate before the final determination this looks like a big vote of confidence in the expertise and independence of the office of the Utility Regulator."

'Responses'

In a statement, NIE said: "We welcome the publication of the provisional determination and will submit our response by the due date, 29 November 2013.

"The Competition Commission will be holding further hearings to discuss responses to the provisional determination during December and we expect the final determination to be published in February 2014."

The commission's ruling is even tougher than the settlement that the regulator had offered to NIE.

In particular, the commission has told NIE to cut its profit margin.

A power industry source in Northern Ireland has told the BBC that the commission's ruling could have implications for the wider UK electricity market.

The source said that it will "set the scene" for negotiations between the power companies and regulators.

The source added that the commission's decision may have "shocked" some of the power companies.

In 2012, the Competition Commission ruled that the Utility Regulator was not justified in attempting to place a new price control on Phoenix Gas, which owns the Northern Ireland gas network.

The commission said while some adjustment was reasonable, the regulator was not justified in acting the way it did.

Phoenix criticised the regulator saying it proposed actions could have "serious adverse consequences" for the continued development of the natural gas industry throughout Northern Ireland.

More on this story