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Gas Security for Northern Ireland Moves a Step CloserPRESS RELEASE: Northern Ireland Energy Holdings continues to contribute to lower electricity prices – at a time of record high energy prices
For the sixth year running, Northern Ireland Energy Holdings has been able to avoid charging Northern Ireland customers directly for the costs of operating its Moyle Interconnector, the 500 megawatt subsea connection between Scotland and Northern Ireland. In order to minimise electricity prices to consumers in the year April 2008 – March 2009 NI Energy Holdings has decided to allocate another substantial contribution from its Moyle Interconnector business reserves. This year the company is leaving money in the pockets of Northern Ireland’s energy consumers with a contribution of £3.5m following up on a contribution of £9.4m last year. This means that the company has continued with its track record of keeping total electricity prices to consumers significantly less than they otherwise would have been. This saving is in addition to the savings on the cost of capital associated with the mutualisation of the Interconnector which are estimated to be approximately £13.5m to the end of March 08, a saving of nearly 30% on the non mutual case.
Northern Ireland Energy Holdings Director, Paddy Larkin said “I am delighted that we have been able to make another real contribution to keeping electricity prices down. Our Moyle Interconnector business has had a reasonable trading year and we have delivered lower operating costs. Combined with drawing on our reserves, that has allowed us to make this difference for consumers. This is particularly significant when energy prices have risen to record levels.”
However, Mr Larkin cautioned that the company has some concerns as to its ability to make similar sizeable contributions in the years ahead. The new Single Electricity Market structure which started in November last year does not provide revenue for the Moyle Interconnector which matches its contribution to the electricity system in Ireland.
Mr Larkin commented, “We are concerned that the Single Electricity Market does not properly remunerate the interconnector or its users for the capacity benefits it brings to the system. This is not about supply companies paying more, it’s about an equitable distribution of their payments between generators and Interconnector users. In order to deliver the benefits of interconnection – which are crucial to the market operation – assets owners must receive their fair share of revenue. For Moyle, Northern Ireland consumers have to pick up any shortfall between its revenues and its costs. We have been able to avoid this situation in recent years by calling on cash surpluses from early trading years but obviously this cannot continue indefinitely.”
He added: “This year, in addition to making this further major contribution to lower future electricity prices, the Moyle Interconnector has demonstrated its essential role in ensuring that there is adequate electricity supply available to meet Northern Ireland’s needs.”
-- ENDS –
Patrick Larkin,
Director, Northern Ireland Energy Holdings
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Notes to editors
Northern Ireland Energy Holdings is a company limited by guarantee. Its principal objective is to own and operate energy infrastructure assets in the interests of the energy consumers of Northern Ireland. The company is a mutualised entity and therefore has no shareholders and its primary stakeholders are energy consumers.
The Moyle Interconnector is the electricity link between Northern Ireland and Scotland which was mutualised in April 2003. It was acquired from former owners Viridian and refinanced on a £135 million 30 year bond. The Group was expanded in 2005 with the acquisition and mutualisation of the Scotland Northern Ireland gas transmission pipeline.
For further information contact:
Northern Ireland Energy Holdings Press & Media Contact
Owen McQuade
Lagan Consulting
Tel: 028 9261 9550
Mob: 07967 094494
email: owen.mcquade@laganconsulting.com
Last Updated: 15th February 2008