Select Committee on Northern Ireland Affairs Minutes of Evidence



Memorandum on the Powers and Responsibilities of the Electricity Regulator


  The duties of the Director General of Electricity Supply for Northern Ireland (DGES) are set out in the Electricity (Northern Ireland) order 1992 and include:

    —  ensuring that all reasonable demands for electricity are satisfied;

    —  ensuring that licensees can finance their licensed activities; and

    —  promoting competition in generation and supply.

  In discharging these duties the DGES has a further duty to exercise his functions in a manner which is best calculated to protect the interests of consumers in respect of:

    —  the prices charged and the other terms of supply;

    —  the continuity of supply; and

    —  the quality of the electricity supply services provided.

  In summary the Director's main aims are to promote an efficient and competitive electricity industry in Northern Ireland and to protect the interests of electricity consumers.


Standards of Performance

  The Director General has set Standards of Performance to encourage NIE to provide a high level of service to customers. There are two sets of Standards:

  Guaranteed Standards of Performance which set service levels for a number of common activities including restoration of supply and which must be met in each individual case. If NIE fails to meet the prescribed Standard, then a payment must be made to each individual customer affected. Details of the Standards are shown in Annex 1.
  (NB NIE is exempted from making payments where its default on a Standard results from factors beyond its control—such as severe weather).

  Overall Standards of Performance which provide targets for the performance of the company as a whole. NIE is not obliged to make payments to affected customers, but is required by law to conduct its business in such a way as can reasonably be expected to lead to achievement of the Standards. Details of the Standards are shown in Annex 2.

Codes of Practice

  NIE is required by its Licence to publish and make available Codes of Practice for customers. The Codes must be approved by the Director. Revised Codes were approved by the Director and launched in September 1998. The Codes are titled:

    Using Electricity Efficiently in your Home

    Using Electricity Efficiently in your Business

    Services of the Elderly and People with Disabilities

    Paying for your Electricity

    Making a Complaint

    Using your Powercard Meter; and

    Tariff Customers in Default (issued to advice agencies only).

Customer Complaints

  The Director, through his Department Ofreg, provides a complaints service for customers dissatisfied with NIEs performance. Customers with an electricity problem should first approach NIE, but if the matter is not dealt with to their satisfaction they may refer it to Ofreg. Ofreg currently deals with 200 plus complaints annually.

Capital Expenditure and Network Refurbishment

  Most of the revenues of NIE's regulated business are subject to price controls. The Transmission and Distribution (T&D) business (which was the part most affected by the Boxing Day storm) has a separate price control formula which lays down the maximum revenue that NIE is permitted to raise from customers for this part of the business. It is this revenue, agreed between NIE and the Director and collected exclusively from customers, which supports capital expenditure and asset replacement.

  NIE is free to determine its capital expenditure and asset replacement priorities within the budget allocated by the price control.


  The Director General and Ofreg staff dealt with over 1,000 calls from irate customers immediately after the Boxing Day storm. Several members of staff cancelled leave to ensure an optimum level of service was available. Customers welcomed the opportunity to speak to someone about their difficulties, as in many cases NIE's communications problems meant they had been unable to make contact with the company, or were limited to a recorded message. Ofreg staff took steps to ensure NIE were aware that customers who had called were off-supply.

  In addition to handling customer calls, Ofreg staff were active in persuading NIE that meaningful good-will payments to affected customers were essential. Payments were increased as a result of this pressure and agreement was reached eventually that no customer should be worse off financially than would have been the case had the company not been exempt, as a result of the severe weather, from the guaranteed Standard relating to restoration of supply.

  Following the Christmas/New Year storms in 1997-98, Ofreg staff met with NIE several times during the year to encourage better performance in future. At a meeting on 12 November 1998, NIE explained that a Trouble Management Process was in place to deal with future emergencies. This Process clearly failed to cope with the Boxing Day 1998 situation and the Director has asked NIE for a full report explaining why this was so.


  In the immediate post-Boxing Day period the NICCE was active through its Chairman and members in championing customer concerns in the media and with NIE. The Committee plans to pursue NIE to ensure its communications and infrastructure are able to cope better with any future emergency. Further information on NICCE is contained in Annex 3.

3 February 1999

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