Electricity deal to cost £1,600 per household by 2010

Northern Ireland’s electricity consumers are to pay over 1 billion pounds more for their electricity than Great Britain by 2010 thanks to a deal struck during privatisation in the late 1990s. It means providers are prevented from selling cheaper electricity even if they want to. Poor negotiating skills are apparently to blame although nobody seems interested in finding out more.

  • D’Oracle

    My sympathies.
    Down South there may or may not have been poor negotiating skills but what do have is lots of ideology ; we had the cheapest electricity in Europe but unfortunately this was provide by the state-owned ESB. This was not acceptable so in order to privatise it and make way for much less efficient profit maximisers, the price to homeowners has to be jacked up by 25 %+.

    ‘Bonkers’ doesnt even begin to come close

  • Keith M

    This sounds like a bad deal for the consumer, but I’m not sure that the government can arbitrarilly change the contracts signed with the suppliers as suggested.

    As for the Republic, D’Oracle leaves out one key point, the changes here were introduced to allow for competition in the the supply of electricity, something that imposed by the EU. Even if the government here wanted to keep ESB’s state owned monopoly, they couldn’t wityhout defying the EU. Hopefully in the longterm the consumer will win. Similar privatisation and the introduction of competition have been hugely beneficial to telecomes users in this country.

  • Basil McCrea

    This will cost jobs
    On 6th July, 2004 Enterprise, Trade and Investment Minister, Barry Gardiner, expressed disappointment at the outcome of preliminary discussions with the EU Commission in relation to the proposed £30 million per annum Government intervention aimed at reducing business electricity costs in Northern Ireland.

    Mr Gardiner said: “High electricity prices have hampered business competitiveness in Northern Ireland for over a decade. To create a more competitive environment, we need to reduce electricity prices.

    That is why we initiated a Budget proposal to remove some of the excess costs inherited from privatisation. This would have led to a decrease in electricity prices for business.

    We have now had an initial response from the European Commission about the extent to which the proposal complies with EU State Aid guidelines. Unfortunately they have raised a number of concerns and claimed the proposals are anti-competitive. We reject this, but clearly there will be no short-term solution to higher energy costs for business.

  • aquifer

    Hard to know exactly what went on in that Tory administration.


    “>Audit Office

    e.g. Tim Cash for Questions Smith was an Economy minister here for a time, though after the big NIE decisions had been taken it seems. Tim was also a Tory party fundraiser.

  • Aquifer
  • Wichser

    I do hope that none of the loudmouth free market brigade have the chutzpah to come on here whingeing and whining about this.

    Still, it’s good news for the bonfire lobby I suppose….

    :-

  • aquifer
  • Jay Curtis
  • DCB

    The public sector should outsource the negoaiton of PPP/PFI contracts.

  • T.Ruth

    In a province where the demand for independent public inquiries is an almost daily phenomenon why are we so accepting of this situation. A billion pounds of taxpayers money given away and there is no significant public outcry.
    Who made these decisions-who provided the assessments on which the decisions were made-was this a case of monumental incompetence or is there a more sinister explanation??? In particular it would be interesting to know who have been the most significant beneficiaries in terms of the investment returns. Did any of the decision makers benefit in any way?
    Northern Ireland has been a place where many enterprises have benefitted over the years at the expense of the people and there are no investigations,no heads roll. Former civil servants and in some cases family members move effortlessly into well paid employment in enterprises that they may have been engaged with during their career as public servants.
    How do we generate a requirement that the public can be reassured in matters of such public concern.
    T.Ruth

  • Basil McCrea

    T.Ruth
    As aquifer points out in his 12:37 this issue was investigated by the Audit commission.

    If you want to get your teeth into a subject that you can fix. How do you feel about the ending of industrial de-rating. The first financial effects have just been felt this year.

    Combined with the high electricity, insurance and freight costs this will drive about one third of our manufacturing base to the South of Ireland.

  • Dessertspoon

    Don’t know why everyone is so surprised. Norn Iron is a rip off economy. Assuming you can get a company to provide you with a service here in NI at all you can be sure you’ll pay through the nose for whatever it is.

  • fair_deal

    I must admit I was always surprised that reform of the NICS never appeared as part of the political negotiations. It has developed an unhealthy culture of aloofness, social engineering and reluctance to change/innovate (even by the standards of the British civil service) during the period of direct rule.

    The DR Ministers can’t be blamed directly considering how little time they would have actually spent here – more the sin of omission.

    However, the NICS at a senior level most certainly can. There does seem to be an over cosy relationship between the senior levels of the NICS and key business sectors in Northern Ireland e.g. banking.

    The ongoing MoD investigation into corruption around military base contracts should also be a cause for concern.

    Could the energy contracts be an example of a cosy relationship leaving joe public to be screwed will others retire to nice directorships?

    Also considering that billions that are about to be spent on infrastructure the ability to negotiate good contracts better have been/is being sorted or the rates bill do more than double.

    DCB

    “The public sector should outsource the negoaiton of PPP/PFI contracts”

    Ahhh but how do we know they won’t get hosed in negotiating the contract for negotiating the contracts?

  • The Dog

    And to think water privatisation is just around the corner.

    Add to that the huge reliance on PFI – some 20% of the building programme (compared with 10% in Britain) and the signs are not good.

    The PFI programme put forawrd by the Strategic Investment Body (worth billions over the next 10 years) will have a huge impact – more services out of house – and just look what that has done for MRSA in our hospitals – and more money tied up in paying long-term levies to private companies to boost their profits.

    If only the approach worked – but all the evidence, especially for schools and hospitals is bad – smaller classrooms, smaller hospitals and fewer beds.

    The only reasonable examples appear to be french toll roads.

  • ganching

    The public sector already spend millions of pounds on consultants who assist in the negotiating of PFI/PPP contracts. If they outsourced negotiating they would need to spend more huges sums of money on procuring the consultants to procure the consultants to procure the contractors. How would this help?

  • ganching

    The public sector already spend millions of pounds on consultants who assist in the negotiating of PFI/PPP contracts. If they outsourced negotiating they would need to spend more huge sums of money on procuring the consultants to procure the consultants to procure the contractors. How would this help?

  • DCB

    gauching

    that’s a valid point. dont’ know how to improve it but the public sector just isn’t at all savy at negoiating with the private sector. It probably boils down to the later being more cost focused and having harder budgets, but again I’m speculating

  • The Devil

    The only way to stop the exploitation of the general public is to take the usual steps of action

    *********** SWEET F A ****************

  • D’Oracle

    Ganchings never ending sub-contract model sums up the logic of whats going on …but Devil- lets hope apathy isnt infinite.

    Keith,

    If EU are responsible for this, its just another reason why the French said No thanks. Maybe ‘in the longterm the consumer will win’ but can you suggest a credible way that could resultfrom the new situation ?

    Telecom privatisation the South has been a total disaster ; lots of asset-sweating, price-gouging etc. and zilch strategic investment.
    Kiss the palaver about the knowledge society goodbye: our broadband take-up rate is just above Burkina Faso’s

  • Wichser

    All

    Like I say, people who advocate the free market so earnestly shoudn’t gurn about the way that it works.

    Suck eggs, ratepayers

  • Keith M

    D’Oracle “If EU are responsible for this, its just another reason why the French said No thanks.” Some very poor cause and effect analysis there. The deregulation of electricity started in 1996. Since then the French have said “yes” to the Amsterdam Treaty, and the Nice Treaty. Saying “no” to the constitution had nothing to do with electricity and everything to do with a corrupt and unpopular president, and French public realisation that their economic model is making them uncompetitive in the new EU.

    “Maybe ‘in the longterm the consumer will win’ but can you suggest a credible way that could resultfrom the new situation ? “. Deregulation should lead to competition, compeition generally leads to better services and lower prices, QED the consumer wins.

    “Telecom privatisation the South has been a total disaster ; lots of asset-sweating, price-gouging etc. and zilch strategic investment.”

    So that’s why I can see 3 mobile phone masts from my bedroom window? Like it or not, more that 5 times as many phone calls are being made today than were made prior to deregulation. Phone bills are generally lower and more people have phones than ever before (over three times as many as before deregulation).

    “Kiss the palaver about the knowledge society goodbye: our broadband take-up rate is just above Burkina Faso’s”. This is down to population density and demand. All our cities have broadband. The areas that don’t are the sparsly populated rural areas, where demand is low. Yes we were slow off the mark, but that is down to the fact that people were more interested it having mobile phones and priority was given to setting up that infrastructure. Today our mobile phone coverage is very strong (and I can persoinally compare Kyiv, Istanbul and Lisbon as examples of cities where the coverage is not as good as Dublin’s).

  • D’Oracle

    Keith,

    Sure the French economy wasnt in great shape but their referendum debate locked onto the Treaty’s Anglo-Saxon liberal economics ; sacrificing utilities like EDF on the altar of ideology didnt make sense -there or here.

    A Republic electricity price rise of 25%+ (with another 10%+ seemingly on the way) is no kind of evidence of ‘generally ‘lower prices from competition.

    Mobile phones are no substitute for a high capacity data network ; the capital investment needed is small beans compared with broadband. Ireland has the dearest -yes the dearest, broadband connectivity in Europe ; it also has one of the lowest take-up rates. Join the dots.

    BTW Do you not worry about all that microwave radiation outside your window ?