by Roger Milne
Former British electricity regulator professor Stephen Littlechild has criticised the way the Northern Ireland Utility Regulator chief executive Shane Lynch carried out the latest transmission and distribution price control (RP5) for power
company Northern Ireland Electricity (NIE).
Littlechild claimed the approach of the Utility Regulator was out of step with best practice and in several respects “an example of how not to regulate”.
His comments came in a report commissioned by NIE’s parent, the Irish energy giant ESB. Extracts from the report were leaked to the Irish media.
Littlechild’s report was drawn up following the draft determination published by the Utility Regulator in April, which substantially cut the NIE’s proposed allowable investment budget.
A spokesman for the regulator said RP5 was being undertaken in a manner “broadly consistent with practice elsewhere”.
He insisted that a recently concluded consultation on the draft determination “produced an excellent response from a range of stakeholders”.
The Utility Regulator expects to publish its assessment on the comments as part of its final determination on 23 October.
· Last month, the Competition Commission ruled that the Utility Regulator was not justified in placing a new price control on Phoenix Gas. Professor Martin Cave, deputy chair of the Commission, said the price control risked damaging confidence in the regulatory system, “which in turn could inhibit future investment”.
Regulator seeking to claw back NIE’s cash
A fraught relationship between Northern Ireland Electricity (NIE) and its regulator has been further soured by a row over the company’s accounts and changes in its capitalisation policy.
The Utility Regulator issued a report in which it argued it would be justified in effectively reclaiming millions of pounds for customers, on the grounds that NIE had been overcharging for some of its activities such as tree management.
The regulator proposed making retrospective changes to the company’s regulatory accounts. NIE disputes the findings.
This article first appeared in Utility Week’s print edition of 7th September 2012.
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