SUMMARY OF PRINCIPAL CONCLUSIONS AND RECOMMENDATIONS
75. Our principal conclusions and recommendations
are as follows:
(a) We note that NIE plans to implement
measures to improve the information available to call handlers
and to improve its media communications strategy. We welcome this.
It is clear that customers found performance in this respect in
relation to the Boxing Day storms lamentable, a fact which NIE,
to its credit, frankly admits. As we recognise that it will never
be possible for the system to handle this level of calls, the
priority should be to seek to minimise the need for customers
to call to obtain information, so that as many lines as possible
are free for customers seeking to convey information about supply
failures, which can only help to plan the reconnection process.
To that end, we recommend that the comprehensive media communications
strategy in the event of a major disruption to electricity supplies
should be designed so as to minimise the need for queries about
reconnection times, etc. We also recommend that the NIE should
publicise widely its plans for providing information in such circumstances,
perhaps by periodically including an appropriate insert in account
mailings. (Paragraph 32)
(b) We believe that BT should review
the operating arrangements for its 0345 numbers. Its evidence
reveals a substantial apparent weakness in the Message Link service
in that NIE could not update its own messages. This was not due
to a fault, as originally thought; it was due to an inherent design
problem in the service. Inaccurate and out of date messages were
one of the complaints of customers who did get through to the
Link. BT should provide dedicated updating lines as a matter of
urgency. There would also appear to be a case for BT to review
the overall level of capacity on the national 0345 platform: it
appears fortunate that the bulk of the burden from the storm fell
on a holiday weekend when there was little other traffic to these
numbers. This was pure chance. (Paragraph 36)
(c) It is clear that NIE field staff
faced many difficult challenges in restoring electricity supplies
on December 26 and subsequently. Not only was there substantial
damage to the electricity network, the storm had also damaged
NIE's private communications networks. Continued adverse weather
hampered repair teams in the field who were undertaking damage
assessment and restoration work against a background of continuing
damage caused by the weather. We pay tribute to the dedication
and skill of the field staff in particular, who worked throughout
the period 26 to 31 December, often in atrocious weather conditions,
to restore supplies to customers. (Paragraph 38)
(d) We note that OFFER is to consider
the quality of supply achieved during storms in the light of the
historic capital and operating expenditure of PES in Great Britain.
If OFFER deems companies to have been inefficient in their allocation
of expenditure, they will be dealt with through the forthcoming
distribution price control review. We consider that a similar
mechanism would be appropriate in Northern Ireland in the context
of the 2002 revision of the NIE price control. (Paragraph 53)
(e) The level of security of supply through
the overhead supply network is, and will remain, lower than that
through the underground network: customers served through the
overhead high voltage network suffer on average an annual level
of Customer Minutes Lost nearly ten times greater than those served
through underground network. Given that customers pay the same
price for their electricity whatever the means of supply, we believe
that NIE's concentration on enhancing the resilience of the overhead
supply network is reasonable. (Paragraph 59)
(f) Establishing how much more consumers
themselves are willing to pay is an essential input to decisions
on what consumers should be prepared to pay. We emphasise that
this exercise should be completed before the price control and
the allowed level of capital expenditure are re-set in 2002. (Paragraph
60)
(g) Given the difficulty of ascertaining
how far capital underspends are due to genuine efficiency gains,
we support the Regulator's proposal that NIE should provide cost-
benefit evidence that proposed changes in the capital expenditure
programme during a given price control period are economically
efficient and more beneficial for consumers than the original
capital expenditure programme approved by the Regulator. Like
any well run company, NIE is certain to make such calculations
before it decides to defer particular projects. (Paragraph 61)
(h) Given our general support for measures
to improve the resilience of the overhead distribution system
to storm damage, we welcome the assurance from the Regulator that
meeting his target for reducing domestic electricity bills, which,
if achievable, will no doubt be widely welcomed in the Province,
does not depend on a substantial reduction in transmission and
distribution expenditure. (Paragraph 64)
(i) We consider that the scope for
using some of the £40 million remaining from funds announced
in 1995 to reduce the cost of electricity in Northern Ireland
to improve the resilience to storm damage of the overhead electricity
supply network in Northern Ireland should be investigated.
We recommend that, before any of the £40 million is allocated
to reducing generation costs, a thorough study be carried out
of the case for investing some at least of that sum in strengthening
the resilience to storm damage of the overhead supply network.
(Paragraph 71)
(j) Since we took evidence from
NIE, OFFER has published its own report on the experience of Public
Electricity Suppliers in Great Britain in responding to storms
caused by the same weather system. We hope that NIE will study
this report carefully and the recommendations that it makes, as
many of these may also have potential application in Northern
Ireland. (Paragraph 73)
(k) We note that the Regulator plans
to publish very shortly a comprehensive a report on the
lessons to be learned from the storm. We look forward to receiving
copies of this report in due course. We would also like NIE to
let us have a comprehensive progress report at the time that the
Government replies to this Report on the implementation of its
plans, on some of which they have made interim announcements,
to minimise the impact of future severe storms on the electricity
distribution system in Northern Ireland. We would like that report
to include a list of all outstanding steps to be taken, with a
firm timetable attached to each. (Paragraph 74)
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