Select Committee on Northern Ireland Affairs Minutes of Evidence


Further Memorandum submitted by Northern Ireland Electricity plc

  There are several recent letters in which you have requested clarification or further informaiton to assist you in the drafting of the Committee's report. I am pleased to respond as follows:


  In your letter dated 23 June 1999 you asked us to provide information to support our statement that urban and rural customers are exposed to starkly different experiences of customer minutes lost (CML).

  Figure 6.4 in the MMC report (attached) was based on information which NIE provided to the Commission during its inquiry into NIE's price controls. It demonstrates that customers in predominantly urban areas such as Belfast and Londonderry, where the distribution network is largely underground and the population relatively dense, experience relatively low CML levels compared to customers in rural districts such as Newry and Dungannon. There the network is predominantly overhead and the customer base is widely dispersed and CML levels are an order of magnitude higher. The MMC commented (in paragraph 6.21 of their report) that this pattern is also evident in GB.

  This urban/rural differential is also reflected in an analysis of average annual CML on underground and overhead networks respectively as requested in your letter. Whilst the underground/overhead split is not an exact proxy for the urban/rural split (indeed a significant number of urban customers are supplied by a mix of underground and overhead network), the analysis is indicative of the wide variation in quality of supply experienced by different groups of customers.

  Table 1 below, provides the breakdown of customer minutes lost associated with faults and pre-arranged outages on the HV network over the seven year period from 1992, excluding the Boxing Day storm.


HV Network CML/CC—Allocation on the basis of affected overhead or underground component (excluding Boxing Day 1998)
Overhead Network (CML/CC) Underground Network (CML/CC)
7 year average470 48
Range391542 4060

  The customer minutes lost associated with overhead and underground components respectively are each normalised by the number of customers in each category by assuming that 40 per cent of customers have an overhead supply. The range of values provides an indication of the best and worst of the seven years included in the analysis.

  This analysis indicates that the number of customer minutes lost per connected customer due to outages on the overhead network is an order of magnitude higher than those attributable to the underground network.

  This is consistent with the results of the inter-district comparison presented in Figure 6.4 of the MMC report and supports the statement that urban and rural customers are exposed to starkly different experiences of customer minutes lost (CML).


  In your letter dated 23 June 1999 you requested clarification of the assumptions underlying our breakdown of the domestic customer's bill into the three components—generation, transmission and distribution, and supply. The assumptions and methodology are as follows:

    —  We have based our calculations on an annual consumption of 3,300 units as this is the basis on which tariff comparisons between supply companies are normally made.

    —  The total annual bill (£297) is calculated by reference to our published Home Energy" tariff which is 9.0p per unit for a domestic customer using 3,300 units per annum.

    —  The generation component (£171) was calculated by applying the published NIE bulk supply tariff (the form of which is approved by Ofreg) to a Northern Ireland domestic load profile. The load profile consists of electricity demands in kW for each half hour time period in the year. This profile was produced by the Electricity Association in 1997 following load research, carried out by them at our request on a sample of domestic premises in NI.

    —  The transmission and distribution component (£117) is calculated by reference to the charges for supplies to domestic premises contained within our published Use of System statement (which is also approved by Ofreg).

    —  The supply component (£9) was then calculated as the balancing figure between the total charges (£297) and the sum of the generation costs (£171) and the transmission and distribution costs (£117).

  We discussed this approach in detail with Ofreg on 6 July and Ofreg understand our methodology and will respond to you separately.


  In your letter dated 29 June 1999 you requested clarification of:

    —  the total number of customers who lost supply over the period 26-31 December;

    —  the number of customers off supply for longer than 24 hours;

    —  the number of customers receiving goodwill payments; and

    —  the cost of the goodwill payments.

  As explained in previous correspondence (4 June 1999) the NAFIRS system associates each network incident with a network device (circuit breaker or fuse) rather than with individual customers affected. Our estimates of the number of customers affected were derived from the number of interruptions reported in NAFIRS by applying a scaling factor to take account of, inter alia, double counting of some interruptions where restoration of supply was completed over two or more stages.

  This limitation of the NAFIRS system in terms of its ability to provide precise data on the number of customers affected in circumstances where there is widespread network damage is well recognised. In their recent report on the Boxing Day storms in GB, OFFER highlighted its concern about the lack of ability to accurately identify the number of customers off supply.

  With the benefit of additional information which became available through the goodwill payments exercise, our best estimates of the number of customers affected are as follows:
number of customers affected during Boxing Day 162,000
number of customers affected during 26-31 December 246,000
number of customers off supply less than 24 hours 65,000

  The figure of 65,000 customers off supply for longer than 24 hours respresents 26 per cent of the 246,000 customers affected over the period 26-31 December. The 19 per cent which appears on page 19 of the Storm report was estimated on the basis of our standard scaling factor. In light of the more detailed data which became available during the work on goodwill payments, the 19 per cent figure was amended. (We believe there is no need to revise the figure for the number of customers affected during Boxing Day and our estimate remains at 162,000 as per the Storm report).

  In addition to the 65,000 customers who were off supply for longer than 24 hours and who were therefore entitled to goodwill payments, we made a further 16,000 goodwill payments to customers who suffered low voltage or where representations were made that the duration of interruption was so close to the 24 hour threshold as to merit a payment. The total number of goodwill payments made to date is around 81,000, and as the payments are tailing off, we expect this to be close to the final figure.

  The total cost of goodwill payments to date is £9.5 million.

  To summarise:

    162,000 customers were affected on Boxing Day.

    246,000 customers were affected during 26-31 December.

    65,000 customers were off supply for longer than 24 hours.

    81,000 goodwill payments have been made at a cost of £9.5 million.

6 July 1999

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 1999
Prepared 29 July 1999