NIE Networks, responsible for delivering a secure and reliable electricity supply to consumers, is subject to economic regulation to ensure fair pricing and efficient operation. The Utility Regulator's price control mechanism determines the revenue that NIE Networks can recover from customers through supplier tariffs.
The RP7 price control, which will span from April 2025 to March 2031, will enable NIE Networks to undertake essential infrastructure upgrades and invest in innovative technologies to enhance network performance and support the integration of renewable energy sources.
Elaine Cassidy, Director of Price Controls, explained: "The Utility Regulator has today approved an investment package for NIE Networks of £2.23 billion over a six-year period, starting in April 2025.
"This investment package, that we refer to as RP7, will facilitate the transition away from fossil fuels to renewable energy sources. It will also secure a robust and resilient network to support innovation and provide increased capacity, while securing long-term value for Northern Ireland's electricity consumers.
"The programme of work identified within RP7 is key to delivering the required investment in Northern Ireland's electricity network that will help achieve the Northern Ireland Executive's Energy Strategy and the targets set in the Climate Change Act.
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"In our role as economic regulator, we are committed to ensuring that there is a fair, affordable and just transition to net zero for all electricity customers. Our central aim for RP7 was to strike the right balance between making sure that consumers benefit and are protected, while providing the necessary investment to future-proof Northern Ireland's electricity network, as we journey towards net zero."
The key decisions within the Final Determination include:
• Overall total expenditure of £2.23 billion, which is a 12.6% reduction on NIE Networks' request of £2.55 billion.
• A total of £1.789 billion for capital expenditure, which includes investment in the distribution and transmission networks and metering work that will benefit all electricity customers.
Impact on consumers:
• All electricity customers pay a network charge as part of their total electricity bill that they receive from their supplier. This network charge pays for the electricity network.
• The network charge for a typical domestic consumer is currently around a quarter of the overall bill. The amount that business customers currently pay for the network charge is slightly lower than a quarter of the overall bill.
• The increased investment within RP7 does come at a cost for both households and businesses, however the cost impact will depend on the customer's actual electricity usage.
• A domestic consumer who does not change their consumption is not expected to see any material change in the network charge of their electricity bill.
• Consumers who choose to adopt low carbon technology (such as heat pumps and electric vehicles) will see an increase in line with their increased electricity consumption, but this cost will be offset by them not having to pay for petrol/diesel for their car or their previous source of home heating (e.g. home heating oil).
• Small businesses will see an increase of less than £10 per year by the end of the six year price control period.
• Medium sized businesses could see a 4%-6% increase to the network element of their bill (which accounts for slightly less than a quarter of the overall bill). This is an estimated figure and will vary depending on usage. This estimated increase is a reduction from the 3%-9% increase projected in our Draft Determination.
• Large energy users could see an 8%-15% increase to the network element of their bill (which accounts for less than a quarter of the overall bill). This is an estimated figure and will vary depending on usage. This estimated increase is a reduction from the 11%-19% increase projected in our Draft Determination.
Elaine Cassidy, Director of Price Controls, continued: "We have followed a robust process in coming to our final decisions. The first key milestone for RP7 was the publication of a consultation on our approach in March 2022, so this has been a thorough process. This involved extensive engagement with NIE Networks and public consultations on both our approach to the price control and our Draft Determination, involving a range of key stakeholders.
"RP7 is creating the foundation for Northern Ireland's journey towards net zero and will facilitate a more efficient use of the electricity system. Our job as NIE Networks' economic regulator is to enable them to facilitate a fair, affordable and just transition for all electricity consumers."
