TUV leader Jim Allister has expressed concern that electricity consumers, in addition to funding the cost of providing extra generating capacity at Ballylumford, are now to also face much of the cost of repairing the Moyle interconnector.
Previously, in Assembly answers* the DETI minister had talked up the insurers of Mutual Energy (the owners of the interconnector) meeting the cost, but now in a new answer Arlene Foster has told the TUV leader that an unspecified amount of the cost will be passed on to consumers in 2015/16.
Commenting Jim Allister said, “The cost of repairing this vital interconnector appears to be spiralling out of control. Interim repairs are to cost £4m, but the permanent repairs, which involves laying new cables, is likely to be many times that figure. Indeed, back in April 2013** Mutual Energy quoted £60m to the Utility Regulator – though, strangely, the minister does not mention that. Alarmingly, much of this looks like being passed on to the hard-pressed consumer. As yet government is not admitting how much. Again, in April 2013 Mutual Energy suggested it would be as much as £30m.
“Hitherto DETI talked grandly about insurers footing the bill, but that talk now seems to have evaporated.
“Mutual Energy Ltd is a private mutual company which not only owns and collects any profits from the Moyle Interconnector, but also owns the gas pipeline connection to Scotland and the Belfast gas transmission pipeline. Its assets and reserves are undisclosed. Yet, now, it seems, the consumer is to subsidise and pay for the restoration of its interconnector, from which, once restored, it will still reap the profits. Is this fair to the consumer?
“I strongly believe the Moyle interconnector requires to be fully restored, but if there was adequate insurance, why are the consumers of Northern Ireland footing so much of the bill?
“The DETI minister and the Regulator owe us all a frank and full explanation as to how we have reached this situation and how far this company is now to be subsidised by the consumer.”
This is the latest Q & A:
Question:
To ask the Minister of Enterprise, Trade and Investment (i) who will pay for the required repairs to the Moyle Interconnector; (ii) how much the repairs are estimated to cost; and (iii) will such result in an increase on the average household bill.
Answer:
The interim repair to the Moyle Interconnector is expected to cost up to £4million. The cost of the permanent repair involving the laying of new low voltage cables is subject to the completion of tendering arrangements by owners Mutual Energy. When contract details for the permanent repair of the Moyle interconnector are finalised, Mutual Energy and the Utility regulator plan to publish details.
The Moyle repair costs will be funded from company reserves, and operational revenue, with the remainder being passed through to consumers. The Utility Regulator therefore expects some impact on electricity bills during the 2015/16 electricity tariff year to fund the capital investment required, however the scale of this is still to be confirmed.
* Q & A from 2012:
AQW 15821/11-15
Mr Jim Allister
Traditional Unionist Voice
North Antrim
Tabled Date: 18/10/2012
Answered On Date: 02/11/2012
Priority Written: No
Question:
To ask the Minister of Enterprise, Trade and Investment why the consumer, rather than insurance, is paying for the losses from the breakdown in the electricity interconnector; and why Mutual Energy is immune from such losses.
Answer:
The latest accounts of Mutual Energy Ltd indicate that, as a result of the faults in the interconnector, revenues were reduced by approximately £12m and a business insurance claim has been submitted in relation to this. The cash costs of the actual repairs were made from the company’s reserves and a formal claim was lodged with insurers in respect of the faults.
**http://www.uregni.gov.uk/publications/correspondence_between_the_ur_and_moyle_interconnector_regarding_the_repair/