Northern Ireland

Winter price freeze for NIE bills

The price of electricity for NIE customers is to remain the same, following the Utility Regulator's annual review.

Iain Osborne said it was good news at a time when wholesale electricity prices were rising and remained volatile.

"It is a welcome outcome for households, especially as we enter the winter months," he said.

Dublin-based Airtricity entered the domestic electricity market in June, promising to undercut NIE by about 14%.

It is the first supplier to compete with NIE Energy since the market opened to competition in 2007. Its prices are not directly controlled by the Utility Regulator.

'Uncertain'

Mr Osborne said the NIE price freeze, which followed the Utility Regulator's annual review of its prices, came at a time when customers in the Irish Republic and parts of Great Britain faced higher bills.

"While today's announcement is good news for consumers, the future for electricity prices remains uncertain," he said.

"We will continue to monitor the situation and scrutinise tariff proposals to ensure electricity bills are kept as low as possible."

A Consumer Council spokesman said they were "satisfied" at the news that prices would not rise.

"However, the way the electricity market operates here means prices are still higher than the rest of the UK," said its head of energy, John French.

"Currently the average NIE domestic bill will remain 11% higher than the equivalent domestic bill in GB."

He added: "The Consumer Council would like to remind consumers that since June 2010 many households are now able to choose their electricity supplier."

The Utility Regulator said many factors were involved in Airtricity's ability to offer lower charges, such as different wholesale purchasing arrangements, introductory offers or new business models.

It said a number of factors meant electricity prices in Northern Ireland were historically about 10% higher than in Great Britain:

  • Higher energy transport costs;
  • Economies of scale in Great Britain because of its larger market;
  • The additional cost of long-term legacy generation and associated contracts (not present in GB markets), and;
  • Northern Ireland's reliance on gas, compared to GB's spread between nuclear, gas and coal.

ESB, the main electricity company in the Irish Republic, confirmed in June it was buying NIE for just over £1bn.

In a Utility Regulator comparison of annual bills based on October 2010 prices, average ESB customers would pay £568 a year, as opposed to £496 for NIE consumers.

The average NIE bill is £79 higher than the lowest priced electricity provider in Great Britain.

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