Agenda item

            The Committee considered the undernoted report:

Relevant Background Information

      The Utility Regulator has asked the Council to comment on their draft Forward Work Programme for 2010?11. The Regulator protects consumers through regulation and scrutiny of Northern Ireland’s gas, electricity and water providers. The Regulator’s strategic priorities are:

-     Protecting consumers by ensuring utility monopolies act efficiently.

-     Environmental sustainability and security of supply.

-     Protecting vulnerable consumers.

-     Boosting competition in wholesale and retail sectors.

-     Harmonising energy markets and use of infrastructure.

-     Evolving the regulatory framework.

-     Their own organisational development.

      The Forward Work Programme sets out how these priorities will be addressed in 2010?11 and also gives an indication of activities into 2013.

      The Council’s response to the draft FWP has to be submitted by 12.00 noon on 20th January, 2010.

Additional information is available from the Utility Regulator’s website:

http://www.niaur.gov.uk/news/view/utility_regulator_publishes_its_draft_forward_work_plan_2010_11_for_consult

Key Issues

      The activities outlined in the draft Programme fall under the following strategic themes:

-     the protection of consumers through effective regulation of monopoly utility companies by applying their regulatory scrutiny to drive efficiencies and promote enhanced level of services (e.g. through Guaranteed Standards of Service). They propose to enhance their regulatory framework through a broadly based review of price control methodologies;

-     promoting sustainability and security through working with utility companies to take account of environmental impact of the services they provide (e.g. requiring NI Water to report on carbon emissions) and assessing options for optimising the existing energy infrastructure;

-     protecting vulnerable customers by implementing a Social Action Plan (the Council has already been consulted on this part of the plan) and contributing to wider Governmental initiatives, as appropriate, on fuel poverty;

-     advancing retail and wholesale competition by removing barriers to potential entrants and reviewing existing arrangements to promote value for consumers (e.g. by reviewing the long-term contracts of electricity generating units);

-     harmonising arrangements to deliver benefits for Northern Ireland consumers (e.g. the potential arising from Common Arrangements for Gas on the island of Ireland);

-     a greater focus on the potential for exercising competition powers and the need to take account of the wider European legislative context;

-     developing as an organisation by enhancing human resources policies and processes and taking the opportunities to deliver on specific governance areas.

      There are specific elements within the draft Programme that may impact on the Council and especially its activities in the North Foreshore Landfill Gas Electricity Generation Scheme. It is proposed that the Council sends the following response.

      ‘The North Foreshore is generating renewable electricity for export which is eligible for the Levy Exemption Certificate (LEC), the Northern Ireland Renewable Obligation Certificate (NIROC) and the Renewable Energy Guarantees of Origin (REGO). The Council therefore welcomes the Utility Regulator’s priorities to work with the Department of Enterprise, Trade and Investment (DETI) and the Office of Gas and Electricity Markets (OFGEM) to ensure that the existing schemes NIROC, LEC and REGO continue to operate smoothly alongside the Single Electricity Market (SEM) mechanisms ensuring the efficient administration of the schemes.

      The North Foreshore Landfill Gas Electricity Generation Scheme also generates renewable heat. The Council would therefore support the proposal for the Utility Regulator to work with DETI to help develop policies and potential incentives in relation to renewable heat in NI.

      The Council notes that the Utility Regulator is proposing to review the regulatory framework with a view to facilitating private network development and connections wherever appropriate. Again the Council supports this, as it may be of some relevance to the North Foreshore site. In particular, there may be an opportunity to sell electricity and heat directly to businesses in the North Foreshore site.

      The Council also notes and approves the commitment to deliver the Social Action Plan. We refer you to our previous consultation response to the specific elements of the Social Action Plan.’

Resource Implications

      Financial

      No immediate financial implications identified. Longer-term there may be implications for selling electricity from the North Foreshore site.

Recommendation

      The Committee is asked to agree the consultation response proposed in this report.

Decision Tracking

      1. Further to approval, the consultation response will be submitted by 12.00 noon on 20th January 2010. No further updates will be submitted to the committee.

Time line:  20 January 2010      Reporting Officer: Barbary Cooke

Key to Abbreviations

      DETI - Department of Enterprise, Trade and Investment

      LEC - Levy Exemption Certificate

      NIROC - the Northern Ireland Renewable Obligation Certificate

      OFGEM - Office of Gas and Electricity Markets

      REGO - Renewable Energy Guarantees of Origin

      SEM - Single Electricity Market”

            The Committee agreed that the comments contained within the foregoing report be submitted as the Council’s response to the consultation on the Utility Regulator’s Forward Action Plan.