NIE bulk supply and public service obligation tariffs

Ofreg consultation (44 pages, PDF) on the process for setting bulk electricity tariffs in Northern Ireland. The bulk supply tariff is used as the basis for energy sales by NIE's power procurement business (which holds long-term contracts with some generators). It also underpins top-up charges, but with an uplift for large imbalances. Spill payments are based on estimates of system marginal price, with a reduction for large imbalances. The public service obligation levy is payable for all electricity sold in Northern Ireland irrespective of source.

The review appears to have been triggered by complaints from second-tier suppliers that there is too much uncertainty about future tariffs and that NIE may have an unfair information advantage. The possible anti-competitive effects of top-up/spill payments and of bulk electricity sales by NIE's power procurement business at a discount to the bulk supply tariff are also raised.

Short consultation period: Responses by Friday 24 November 2006.

For further information or advice please contact Franck Latrémolière.

Filed under Electricity, Ofreg, Price controls.

Reckon LLP is an economics consultancy with expertise in data analysis, economic regulation and competition law.

About Reckon