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Wednesday, 19 June, 2002, 11:08 GMT 12:08 UK
Regulator presents electricity proposals
Initial proposals prompted a strong response
Initial proposals prompted a strong response
The electricity regulator has presented his final proposals to reduce prices to Northern Ireland Electricity (NIE).

It is part of the usual five yearly review of costs.

NIE claimed initial proposals to reduce bills by 27 on average would lead to job losses and blackouts.

Stock market analysts have suggested the company may have to go to the Competition Commission to achieve a satisfactory outcome to its regulatory price review.

Douglas McIldoon
Douglas McIldoon: New proposals

Ofreg Regulator Douglas McIldoon has offered NIE an alternative option which he says would cut average electricity bills by 6 a year and would result in greater savings in the long term.

"When I put forward my proposals in March, there was a certain reaction to them," he said.

"I think that everyone is tired of the dispute between Ofreg and NIE, so what I have done today is made my peace offering to NIE.

"First of all, I fixed what was their main cause of complaint in the March proposals.

"They said the proposals in March would not allow them to continue to refurbish their rural network and would result in them not having enough lines to deal with storms and emergencies.

Morning trade

"So, I have taken them at their word - I'm giving them the extra money to do that and I am going to hold them to their word as far as that part of the programme is concerned."

Mr McIldoon said he was now proposing a small reduction next year, followed by a small reduction in successive years.

Meanwhile, shares in NIE's parent company Viridian fell in morning trade on Wednesday.

Jack Gorman of Davy Stockbrokers said: "Based on the traditional approach, the regulator has come some way towards what NIE was looking for in terms of a (revenue) reduction of 16.7% instead of 25% which is the mid-point in his initial proposals.

"A reduction in the regulatory asset base would be something that would persist rather than just have an impact over this regime. That is something the company would have a very serious issue with - maybe enough to provoke them to go to the Competition Commission."

 WATCH/LISTEN
 ON THIS STORY
The electricity regulator Douglas McIldoon:
"This is a radical new approach to price control which will be in everyone's interest"
BBC NI's economics editor James Kerr:
"The five yearly review of electricity prices always provokes a row"
See also:

10 May 02 | N Ireland
26 Mar 02 | N Ireland
06 Nov 00 | N Ireland
28 Oct 00 | N Ireland
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