Consumers Need Evidence That Electricity Prices Are Fair, Says Consumer Council
Thursday 19 January 2012
•Why does the price of electricity produced by wind generators rise when the price of gas rises1?
•Why does the most expensive electricity generator set the price that is paid to all generators on the Island of Ireland2?
•Why are some generators making profit margins of between 20 and 50 per cent when NI’s top 100 companies are seeing margins between 1 and 6 per cent?
•Why are wind generators paid for being on standby when the wind is not blowing?
•How can increasing renewable energy – which will cost consumers more - be considered separately from tackling fuel poverty3?
These are some of the questions the Consumer Council is putting to the NI Executive and the NI Utility Regulator today as it launches its report – ‘Consumer Council Analysis of the McIldoon Report – Orphans in the Energy Storm’[4].
Following a series of significant increases in energy prices and within the context of NI having the highest levels of fuel poverty in the UK (double that in GB), the Consumer Council is urging the Executive and the Regulator to re-examine the McIldoon Report and ensure that energy policy and regulatory frameworks provide consumers with the best possible deal.
Antoinette McKeown, Consumer Council Chief Executive explains: “In light of recent energy price rises, the Consumer Council has reviewed Douglas McIldoon’s 2008 report and we agree with his continuing conclusion that energy policy in Northern Ireland remains confused and contradictory today. Our concern is that consumers could be paying less for their electricity but the Consumer Council cannot act alone to achieve that. At the very least we believe there should be debate around how electricity prices could be lowered; this report is our contribution to that debate.”
ENDS
For further information please contact Keelin Kelly at the Consumer Council on 028 9067 2488, 07799 032203 or email kkelly@consumercouncil.org.uk
Notes to Editor
Douglas McIldoon is a former NI Utility Regulator and was commissioned in 2008 by the then Regulator to produce his report.
Northern Ireland currently has the highest energy bills in the United Kingdom and recent statistics from Westminster show that the highest average annual energy bill in Great Britain is around £1,000 cheaper than the average annual combined oil and electricity bill in Northern Ireland. Furthermore, in Northern Ireland 44 per cent of households are in fuel poverty compared to 13 per cent in GB.[5]
A copy of the Consumer Council’s report can be downloaded at www.consumercouncil.org.uk/publications or you can request a copy by telephoning 0800 121 6022. Douglas McIldoon’s original 2008 report can be found at: http://www.uregni.gov.uk/uploads/publications/McIldoon_Review_051208.pdf
[2] Those plants which are generating less expensively are being paid above their operating costs and are therefore receiving additional profit or, as McIldoon describes, a ‘super-profit’.
[3] The Department of Enterprise, Trade and Investment has set a target of 40 per cent renewable electricity by 2020, but acknowledges that this could add between £49 and £83 annually to a household bill – based on electricity prices at September 2010.
[4] The original report by Douglas McIldoon was produced as a result of unprecedented increases in energy prices in 2008.
[5] 2009 Northern Ireland House Conditions Survey, Northern Ireland Housing Executive and English House Conditions Survey
Related Documents
- Consumer Council Analysis of the McIldoon Report - 568.4KB PDF Document
