Select Committee on Northern Ireland Affairs Sixth Special Report



Letter to the Clerk of the Committee from the Managing Director of Northern Ireland Electricity plc

I have pleasure in enclosing our response to the principal conclusions and recommendations of Northern Ireland Affairs Committee's Second Report—Electricity Supplies in Northern Ireland: Impact of the 26 December 1998 Storm.

Our reply is in effect a summary of the progress that we have made since our experience during the severe weather over the 1998 Boxing Day period. The ongoing programme of investment in the network will provide more resilience to severe weather although no network can be guaranteed to sustain supplies through storm conditions. We believe that the actions we have taken can give our customers renewed confidence in our ability to manage future emergencies. While it is not possible to provide a human contact with every customer who calls us at the beginning of a major incident, we believe that improved information on our messaging systems and swifter communication with the media will give our customers greater reassurance that we are aware of their supply problems and are taking action to restore supplies.

The commitment I have given to all customers in our new customer charter published last month is that "NIE staff will be working night and day to do everything humanly possible to keep any interruption —whatever the cause —to an absolute minimum".

We hope that Northern Ireland does not experience anything like the hurricane storm of Boxing Day 1998 ever again. But if we do, then we believe NIE is significantly better positioned to handle whatever the elements may have in store for us.

I would be delighted to clarify or expand on any part of our reply, or arrange a visit for your committee to view our new incident management centre at Craigavon.

Harry McCracken
3 November 1999

Response from Northern Ireland Electricity plc

Recommendation (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)


Communications Campaign

We have informed our customers of the work that we have done to improve the quality of service to them during severe weather damage to our system - be it snow and ice, lightning, storms or floods.

We implemented a communications programme for Winter/Spring 1999-2000 to improve customer understanding of, and confidence in, NIE and to meet expectations as we head into the winter period.

The campaign is made up of TV, press and radio advertising, all featuring NIE staff, and a customer information pack[1] which has been mailed directly to all customers. We have also met with local authorities and political parties and our new eleven local Customer Service Centre Managers are being promoted in the local media as the new, local face of NIE.

The Customer Service Centres are situated at: Ballyclare, Ballymena, Bangor, Belfast, Campsie, Coleraine, Craigavon, Downpatrick, Dungannon, Enniskillen, Lisburn, Newry and Omagh.

The Customer Information Pack

Each one of our 683,000 customers has received a special customer information pack during the week commencing October 25. The pack included a letter from Harry McCracken, NIE Managing Director, a severe weather advisory leaflet, a fridge sticker, customer charter information and a leaflet encouraging people to test their smoke alarms.

Harry McCracken's letter includes a detachable 'credit card' size information card, which has a customer number and postcode already printed on it. The card has our emergency number on it as well as some useful advice in the event of a power cut.

The severe weather advisory leaflet has useful information on how to cope with power disruption caused by severe weather. It also includes important safety messages and information on our special needs register, and advice on getting information from NIE during severe weather power disruption.

The Customer Charter Leaflet lists NIE's six Charter Pledges as well as our new overall and guaranteed standards. It invites customers to call 0847 455455 to order their copy of the Charter.

A special peel on and off fridge sticker is included in the pack. It contains useful information on what to do in the event of a power disruption, as well as our emergency telephone number, and advice on getting information from NIE during severe weather power disruption.

The Smoke Alarm Awareness Leaflet has been prepared by the Fire Brigade as part of their 'No Battery No Chance' campaign. NIE is very happy to be involved in the campaign and we are including this in our pack to underline our commitment to safety, particularly during power disruptions.

A media action plan has been drawn up for use during a major supply loss. It was tested successfully during the storms of 17/20 September 1999.

The basis of this plan is that if sufficient notice is available, advance warning and safety messages will be provided through media and advertising. During an emergency, power supply up-dates will be continuously issued, particularly through radio broadcasts, in addition to advertising and Internet.

Improving communications with customers during emergencies

Our Call Handling Capacity has been increased as shown in the table below. We have sub-contracted to BT for provision of Call Handlers to supplement the resources available from our Sx3 sister company, and company volunteers.

Christmas 1998
October 1999
Lines to Call Handlers
Lines to Messaging Systems
Total Lines

A planned escalation procedure is in place to deploy call-handling staff within two hours from the declaration of an emergency.

We have modified our call routine arrangements to provide automatic escalation of up to 36 Call Handlers instantaneously for a single major fault during working hours. We can escalate progressively to 280 Call Handlers within four hours.

When fully escalated we will be able to handle in excess of 6000 calls per hour using operators.

A new Interactive Voice Response system (IVR) was commissioned in September. This can offer up to 35 localised messages on 118 lines, equating to over 15,000 two minute calls per hour.

The first stage of our new Customer Service IT system improvements will be introduced at the end of November 1999. The first phase of this will be the implementation of a new call handling and Trouble Management System for approximately 25% of our rural customer base. All Northern Ireland customers will progressively move to this system by May 2000. We have also increased the capacity of our present call logging system from 500 calls per hour to 3400 calls per hour.

The message link service has been increased to 200 lines and is in use as a back-up for our IVR system.

We have issued a letter of intent to place a contract with BT for an advanced messaging system to deal with major fault situations to be progressively introduced between November 1999 and May 2000.

Five separate direct lines have been provided at our main Customer Service Centres for public representatives. These are in regular use.

Fault information is now provided from Customer Service Centres, mailed electronically to our incident centre, collated and dispatched to Call Handling Centres and our media communications group. The information is structured to provide meaningful information to Call Handlers and hence customers.

A comprehensive call handling training programme is underway to be finished by the end of November. 160 Call Handlers had been trained at 20 October.

More than 1800 staff throughout the Viridian Group have volunteered to assist in an emergency. Tasks have been allocated and induction training will be completed during November 1999.

Special Needs Response Units will be established at five main Customer Service Centres in an emergency. We are aiming to contact and provide Acute Care Register Customers with best possible information and advice within the first few hours of an emergency. We will maintain contact as required with special needs customers throughout the duration of the emergency.

We have established links with the health services and we intend to substantially increase the number of customers contacted through these links, and ensure regular updating.

We have formalised arrangements with providers of vital services (water, communications, hospitals and transport) to ensure that appropriate contacts are maintained. All these services will be contacted within 3 hours of the incident and action taken to ensure that, wherever possible, supply is maintained and restored. Additionally we have provided the owners with ex-directory contact numbers for use in an emergency.

Our thirteen Customer Service Centres have a major role in an emergency. Each centre has a manager who will be responsible for leading the local restoration effort. Eleven Customer Service Centres Managers were appointed in April 1999.

Each Customer Service Centre has a local emergency plan conforming to a Best Practice Model. This provides for the analysis of faults, provision of information to the Incident Centre and Management of Restoration, and local contact with media and elected representatives.

Recommendation (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)


The problems experienced with the BT message link service on Boxing Day 1998 have been overcome by increasing the capacity to 200 lines. These are in two banks of 100. Each bank is taken out of service separately to allow the message to be changed.

Recommendation (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)


We thank the committee on behalf of our staff for the warm tribute to the dedication and skill of our staff and have publicised the comments to all our staff.

A revised NIE Emergency Plan has been completed bringing together all processes and procedures adopted to deal with emergencies.

A Duty Incident Centre Team is on standby each week and manages the escalation process associated with emergencies. This team carries out regular risk assessments, based on weather reports and other relevant information, and mobilises appropriate resources for emergency response, including call handlers.

A new Incident Centre has been opened at Craigavon and this is manned by the Duty Incident Team during emergencies.

The Incident Centre is responsible for tracking the use of resources during an emergency and supplementing NIE resources when necessary. Formal arrangements have been made with other electricity companies in Great Britain and the Republic of Ireland to provide additional resources- teams and equipment will be available at short notice to assist in fault repair. Formal contracts have been agreed with local plant hire companies and helicopter providers. Formal arrangements have also been made with suppliers for the supply of materials during emergencies and specifically over holiday periods.

New processes and systems have been developed to improve our ability to quantify the scale of an emergency and to provide quality information to customers. Information flows from Control Centres, Customer Service Centres and field staff are collated through the Incident Centre with regular updates to call handlers, messaging systems and the media.

A plan has been established to ensure the installation and maintenance of standby supplies at key telecommunications installations. Additional links are to be provided on the private digital network to reduce the impact of multiple digital faults. Additional mobile phones are available for operational staff during an emergency. A review is underway to ensure that operational staff are provided with mobile radios. This communications hardware is critical to the restoration effort.

Recommendation (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).


We are confident that, when required to do so at the next price control review, we will be able to demonstrate that all expenditure on the network has been allocated efficiently. In particular, we are convinced that the superior performance of the refurbished circuits during the storm is evidence of the benefits to customers of the significant investment we have been making in our overhead line refurbishment programme.

As regards the allocation of additional expenditure to improving the resilience of the network to storm conditions, rather than wait until the next price review to debate the efficiency of that particular expenditure, we considered it appropriate to discuss with Ofreg our intention to reallocate resources to fund the accelerated refurbishment and supplementary programmes. In April, we submitted to Ofreg details of our plans, together with comprehensive information on storm damage statistics, evidence of the superior performance of the refurbished circuits, the relationship between network age and its vulnerability to extreme weather conditions, details of the refurbishment specification, the capability within the overall capex programme to reallocate expenditure, the costs and the benefits.

Recommendation (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)


We are pleased that the committee has supported our concentration on enhancing the resilience of our overhead network.

A Refurbishment Steering Group has been set up to project manage the accelerated programme of refurbishment and tree pruning. Each element of this year's programme is on target for completion by the end of March 2000. The 33kV overhead lines refurbishment programme has been increased to 350km with associated tree pruning. A further 600kms of supplementary maintenance (eg, decayed pole replacement), with associated tree pruning, will also be completed. On the 11kV network, which was most affected by the severe weather, the refurbishment programme has been increased from 1,500 km to 1,750km this year, with associated tree pruning. A further 500km of supplementary maintenance with associated tree pruning will also be completed. 800 km of LV refurbishment with associated tree pruning will also be completed.

Each element of this work will provide a more secure network which will be more resilient to severe weather conditions. This is a continuous programme which has been on-going since 1994. The vamping up of the programme will be maintained for at least the next 3 years.

We have increased the number of Senior Authorised Persons available to us (a safety authorisation level required to permit work teams to undertake work on the network). We have also increased the capability of our contractors to undertake similar duties.

A further 3 live-line working teams have been trained and are operational on the network. This technique for working on the system while it is live reduces the inconvenience experienced by customers caused when they are taken off supply for a period to facilitate work on the network.

Recommendation (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).


We have established a Working Group to oversee a customer survey to be conducted by an independent firm of market research consultants. The objectives of the research involve determining customers' views on supply reliability and how much more customers are willing to pay to fund improvements in the quality of supply, including the reliability of supplies during storm conditions. The methodology will employ focus groups together with a customer survey and will seek the views of both urban and rural customers.

We are currently involved in discussions with the Northern Ireland Consumer Committee for Electricity and we intend also to consult with Ofreg in order to build a consensual approach to the survey as recommended by the Committee. The work will be completed over the next few months with a view to having the results available in February 2000. This timescale will provide ample time for the outcome to be taken into account when the next price control is being set.

Recommendation (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).


The MMC made it clear that in adopting a particular level of capex for the purpose of setting the existing price control they were not prescribing an investment programme. They recognised there would be competing demands on the capital budget which would give rise to a need for NIE to determine priorities among those demands.

In exercising discretion in the management of the capital budget, we acknowledge the need to justify any reallocation with a rigorous investment appraisal. That is why we presented cost/benefit information to Ofreg in support of our decision to reallocate expenditure to the accelerated and supplementary refurbishment programmes.

However, the benefits attributable to one category of expenditure are not always readily comparable to the benefits from a different category. For example, the primary benefit which flows from load related expenditure is the ability to meet increased customer demand for electricity whilst complying with statutory and licence standards. On the other hand, expenditure allocated to overhead line refurbishment delivers a different package of benefits including an improved quality of supply to rural customers. Comparing one set of benefits with another is therefore not straightforward and inevitability a degree of subjectivity is required.

Within those constraints, we have set out in our submissions to Ofreg our appraisal of the costs and benefits involved in the reallocation of expenditure in response to the changed investment priorities post the Boxing Day storm.

In addition, over the past six months we have been co-operating with Ofreg and its consultant in the development of an agreed approach to capex monitoring and investment appraisal covering all aspects of network investment. As indicated above in our response to recommendation (d), we expect to confidently defend any substantive deviations from the expenditure levels in each of the categories which was adopted by the MMC for the purpose of setting the current price control.

Recommendation (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)


We also welcome this assurance. High generation costs are the principal cause of higher electricity prices in Northern Ireland.

Recommendation (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 of storm damage of the overhead supply network. (Paragraph 71)


We have investigated a range of options for the use of the £40 million which remains within the Government Support package with a view to determining which option delivers the best value to customers in net present value terms of the price reductions achievable. Options include the base case option of "drip feeding" an annual amount to reduce tariffs, using the money to secure a reduction in the Ballylumford contract payments, application to Orimulsion at Kilroot, and application to the transmission and distribution regulatory asset base (which in effect reflects the option suggested by the Committee).

In all, 10 options have been examined. Leaving aside the option of applying the fund to the conversion of Kilroot to Orimulsion (given the uncertainty which currently surrounds the likelihood of that project proceeding quickly) our analysis shows that the best option is to apply the fund to buy down the Ballylumford contract payments. This provides additional value to customers of between £1m-£4m (depending on assumptions as to the future availability of the generating units) over and above the option of using the fund to offset network expenditure. We have therefore recommended the Ballylumford contract buy-down option.

Recommendation (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).


We have carefully studied the recommendations contained within OFFER's May 1999 report and we consider that OFFER's recommendations are covered in the steps which we have already taken and the plans which we have in place.

Recommendation (k)

We note that the Regulator plans to publish very shortly a comprehensive 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)


At the time of writing, Ofreg's report had not been published.

We have outlined in our responses to the Committee's principal conclusions and recommendations a comprehensive progress report demonstrating that we have already implemented practically all our plans as outlined in our Boxing Day Storm Report. We have included implementation dates for those plans still to be fully implemented.

Many of our measures have already been tested during a weekend storm on the 17-19 September this year in a way which we consider confirms the effectiveness of the actions we have taken since the Boxing Day Storm. A copy of our report[2] to Ofreg is attached. (Annex A)

1  Copies of the pack were submitted to the Committee with this Response. Back
2  This report was set out in a letter of 21 October 1999 from the Regulation Officer. Back

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