Select Committee on Northern Ireland Affairs Second Report


  The Northern Ireland Affairs Committee has agreed to the following Report:—



  1. On 26 December 1998, a severe storm affected Northern Ireland, with gale force winds causing very substantial damage to overhead electrical distribution lines. In the course of that day, around 162,000 customers of Northern Ireland Electricity plc (NIE),[1] some 24% of the total customer base in Northern Ireland, had their supplies interrupted for some period of time, and at the peak about 110,000 customers (16%) were off-supply simultaneously. Around 63,000 customers remained off-supply at midnight. A combination of the scale and complexity of the damage to the system, and continuing inclement weather which both caused further faults and delayed repairs, meant that the last customers did not have their supplies restored until 1 January 1999, some six days later. In all, electricity supplies to an estimated 24 6,000 customers were affected over the period 26 to 31 December. [2]

  2. Not surprisingly, NIE was deluged by attempts to call its telephone Helpline— 650,000 in all over the period 26 to 31 December and over 300,000 on 26 December alone. The volume of traffic was way beyond NIE's call handling capacity and, at certain times and in certain places, beyond the capacity of the telephone system. This failure to be able to contact NIE enhanced customers' dissatisfaction with NIE's response to the storm. Many customers who did make contact complained of receiving misleading, inadequate or out of date information.

  3. As a result of the delays in reconnecting some customers and the difficulties in obtaining information from NIE, there was a widespread perception in Northern Ireland that NIE' s response had been inadequate. This perception was reinforced by recollections of previous disruption to electricity supplies, on Christmas Eve the year before, again caused by adverse weather conditions. We therefore decided on 13 January to look into NIE's response, its compensation proposals, and ways in which future improvement might be effected.

  4. We have taken oral and written evidence from both NIE and from the Director General of Electricity Supply for Northern Ireland (" the Regulator"). We have also received written evidence from the Northern Ireland Consumer Committee for Electricity, and a range of other individuals and bodies. Much of this is set out in the Appendices to the Minutes of Evidence. Included in our publicity for the enquiry was a general invitation to make written submissions. Somewhat surprisingly in the light of the concerns expressed at the time, we received responses from only two electricity consumers and one local authority. We are most grateful to all who submitted oral or written evidence.

  5. We have been ably advised in the course of this enquiry by Professor John Surrey, lately of the Science Policy Research Unit, University of Sussex. We are most grateful to him for his guidance in relation to matters relating to NIE's capital expenditure programme.

  6. NIE published, in early February, a comprehensive report on the storm,[3] which included the measures they planned to take in response. We have drawn on this, as well as on the oral and written evidence, for the purpose of this Report. Storms associated with the same weather system also caused widespread damage to the overhead distribution system and, in some areas, the transmission system, in large parts of Scotland and Northern England. In all, six Public Electricity Suppliers (PES) in Great Britain declared system emergencies. In Great Britain, over 400,000 customers were off-supply at one time or another as a result of storm damage to the supply system and over 7,600 customers were off-supply for more than 72 hours.

  7. In May 1999, the Office of Electricity Regulation (OFFER) published a report[4] on the supply interruptions in Great Britain following the storms, and the responses of the PES. We have drawn on this, too.

  8. This is the second time that aspects of the electricity supply industry have been subject to scrutiny by this Committee. In November 1995, our predecessors reported on electricity pr ices in Northern Ireland. [5] Although this enquiry was primarily focussed on issues arising from the storm, it has inevitably ranged more widely as many of the considerations cannot be detached from the wider ongoing public debate about the future structure of the electricity supply industry in Northern Ireland and the continuing interest in reducing the current differential in electricity prices between Northern Ireland and the rest of the United Kingdom.

  9. The affairs of NIE have also been the subject of a Monopolies and Mergers Commission (MMC) enquiry, following the failure of NIE and the Regulator to agree on revised restrictions of transmission and distribution charges and supply charges to apply from 1 April 1997, and their subsequent ref erral to the MMC by the Regulator. The MMC's extensive report[6] was presented to the Regulator in March 1997 and forms the basis of the price controls now in operation. Both NIE and the Regulator refer to this report in their evidence.

1  Northern Ireland Electricity plc is a wholly-owned subsidiary of Viridian Group plc. Back

2  Appendix 33, p. 119. Back

3  Referred to in this Report as the "NIE storm report". Back

4  Supply interruptions following the Boxing Day storms 1998, OFFER, May 1999, referred to in this Report as the "OFFER report". Back

5  Second Report from the Northern Ireland Affairs Committee, Session 1994-95, HC 395. Back

6  Northern Ireland Electricity plc: A report on a reference under Article 15 of the Electricity (Northern Ireland) Order 1992 (The Stationery Office: April 1997). This report is referred to subsequently as the "MMC Report". Back

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