NI threat to end co-operation on electricity market

The Northern Ireland Utility Regulator has threatened to end co-operation with the Republic on retail electricity and pull out of an agreement on co-ordination between the retail electricity markets on the island.

In a consultation paper published last week, the regulator said a number of concerns about arrangements with the Republic had come to light in the past 18 months, including problems with the design of a common database.

The “harmonised retail systems” arrangement is not a common regulatory policy, but is designed to make it easier for suppliers to operate in both North and South through common IT mechanisms.

The regulator said there were concerns that the pending roll-out of smart-metering in the Republic could result in an “extended freeze” of the system for a number of years. This would mean changes could not be made to it that would allow the Northern regulator implement new policies in its own jurisdiction – this might include areas such as special tariffs for vulnerable customers or for vacant sites.

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“It is our provisional view that the restrictions harmonisation places on regulatory decision-making risk putting us in a position where we cannot in future act consistently with our statutory duties, and that they may instead fetter our discretion to implement the policy changes required to fulfil our principal objective,” the regulator said.

Unlike the electricity wholesale market, where legislation provides for joint decision-making by a single body for the island of Ireland, regulation policy in relation to the retail electricity market continues to be made independently by each regulatory authority.

Unwinding

While there would be a cost of unwinding the current arrangements, the regulator did not consider it significant in light of the constraint that would be removed by doing so, and the risks of continuing with the present arrangements.

Green Party leader Eamon Ryan said the proposed end to co-ordination of retail electricity markets was "a worrying sign of what could come with a hard Brexit and the breakdown in Assembly talks".

He said the Northern regulator’s concerns “should not stop us working together in the design and operation of both retail electricity markets”.

“We need such innovation to promote the use of electric vehicles and other demand-management technologies. Returning to having two different retail markets on our small island system makes no economic sense.”

Mr Ryan, who raised the issue with Minister for Communications, Climate Action and Environment Denis Naughten in the Dáil on Wednesday, said it was up to Tánaiste and Minister for Foreign Affairs Simon Coveney, and Mr Naughten, to intervene "to stop things falling apart".

Mr Naughten said on Wednesday he was not aware of the Utility Regulator’s report but would be taking note of it.

The Commission for Regulation of Utilities (CRU) in the Republic said it was aware of the consultation as both regulators operated closely in this area .

“The CRU will be assessing the impact of this proposal on all aspects of the retail market in Ireland and if necessary will provide information to UR as part of this process,” it said.