Electricity contract to add £5 to Northern Ireland bills
A contract to provide additional electricity capacity in Northern Ireland will add about £5 a year to household bills, the enterprise minister has said.
System Operator Northern Ireland (SONI), the firm responsible for the reliability of electricity system, awarded the contract last week.
SONI said it was necessary to provide additional capacity to meet a projected shortfall over the coming years.
The three year contract went to AES.
The firm operates the Ballylumford and Kilroot power stations.
The minister, Arlene Foster, said: "There will be some cost impacts, that has never been hidden, on consumer bills.
"But the costs have been minimised through the competitive tendering process and will be around £5 per annum on average to the domestic bill."
It is understood the contract will involve modernising part of Ballylumford.
Under the deal, AES will provide an extra 250 megawatts (MW) to the system, enough to power 160,000 homes
It is estimated that from January 2016, the margin of spare generating capacity in Northern Ireland's electricity system will fall from 600 MW to 200 MW.
EU pollution rules
The amount of spare capacity in the system is falling for a number of reasons.
The main issue is that EU pollution rules mean that part of Ballylumford power station will have to be shut down.
Additionally, the undersea Moyle interconnector has suffered a series of faults and is currently running at 50% capacity.
It is due to be fixed by the end of 2015, before the cables are completely replaced in 2017.
SONI considers that 200MW is not enough spare capacity to guarantee security of supply, if there was a prolonged fault at a power station.