SSE complains of “yoyo” Northern Ireland electricity prices

Consumers in Northern Ireland have faced yoyo electricity prices leading to “double-digit swings” in bills. That’s the complaint from Scottish supplier SSE which runs Airtricity, Northern Ireland’s second largest energy […]

Register now!

By Vicky Ellis

Consumers in Northern Ireland have faced yoyo electricity prices leading to “double-digit swings” in bills. That’s the complaint from Scottish supplier SSE which runs Airtricity, Northern Ireland’s second largest energy provider.

This follows comments from Northern Ireland’s First Minister Peter Robinson, who recently despaired: “There must be a better way than going up and down, yo-yoing prices?”

Energy supply in the small nation has been a restricted affair until very recently. Right up to June 2010 there was only one power supplier for domestic and business energy users, Northern Ireland Electricity, which is now known as Power NI.

Since then, when new rules were brought in to improve competition, a number of others have entered the energy market.

On the surface this seemed to have done the trick as in March, the regulator NIUR – the Utility Regulator – published a report which found electricity prices for domestic consumers and small industrial or commercial users were around the EU average in the period January to June 2012.

However Northern Ireland’s energy prices tend to be steered by the prices of Power NI which are still approved by regulator NIUR every six months.

In July, Power NI put prices up by nearly a fifth, ten months after it dropped prices – against the trend in Europe – by almost the same amount. The average annual bill swung from £588 in October 2011 down to £505 in October 2012, a drop of 14.1%, before promptly whooshing back up by 17.8% to £596 in July – months earlier than usual.

Although this drop in regulated energy prices brought short term customer relief, actually it “masked the fact” a decrease in prices was “unsustainable,” according to David Manning, SSE’s Director of Corporate Affairs for Ireland.

In a blog on his firm’s site, he wrote: “At Airtricity we said last October the downward move was unsustainable but we had no choice as an energy provider to follow the decrease if we wished to remain competitive and remain in the market.”

He went on to question what the customer gained from a short term fix: “Ultimately the customer must repay now for the cut in last year’s regulated price control. Where’s the customer benefit in that?”

Consumer groups in Northern Ireland echoed the worry, suggesting “stable” prices were much more desirable.

Aodhan O’Donnell, Interim Chief Executive at the Consumer Council said: “The Consumer Council is also concerned about the volatility of electricity prices.

“Stable prices allow consumers to plan their spending across the whole household budget, with no sudden shocks. Evidence shows that electricity prices have been volatile and we urge the Utility Regulator to consider how the volatility we have seen can be avoided in future.”

However the Utility Regulator regulator blamed international wholesale prices for the “yoyo” tariffs.

A spokesperson said:“The continued volatility of international wholesale fuel costs is the main reason for recent increases and decreases in the regulated tariff in Northern Ireland. The Utility Regulator has no control over wholesale fuel costs and has no role in regulating the prices that Airtricity charges its electricity customers.”

The spokesperson added the regulator “constantly look at ways of exerting downward pressure on energy prices” and referred to plans for a review of the effectiveness of competition in the retail market in Northern Ireland in the new year.