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Utility Regulator

Office of the First Minister and deputy First Minister – in the Northern Ireland Assembly at 2:45 am on 13th October 2008.

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Photo of Basil McCrea Basil McCrea UUP 2:45 am, 13th October 2008

3. asked the Office of the First Minister and deputy First Minister for its assessment of its recent meeting with the Utility Regulator.                   (AQO 581/09)

Photo of Peter Robinson Peter Robinson DUP

It is clear that the credit crunch, coupled with an increased global demand for oil, has had a profound effect on the price of electricity and gas. The responsibility for energy policy lies primarily with the Department of Enterprise, Trade and Investment. However, in one of a series of meetings on the cost of living, on 24 September 2008, the deputy First Minister and I met the Utility Regulator followed by representatives of Northern Ireland’s energy sector. A range of issues concerning the local energy market was discussed, and the deputy First Minister and I gained further understanding of how the energy sector operates. The Utility Regulator agreed to send us some further ideas to explore, about how to mitigate the hardship caused by increasing energy prices. The potential for renewable energy to play a bigger role in the future supply chain was also discussed. It was a constructive meeting about a complex issue.

In separate meetings with local energy companies, it was clear that they are conscious of the price differential that has opened up between Northern Ireland and Great Britain. They too agreed to consider, and submit ideas on, what steps the Assembly could take to ease the burden of high energy prices.

Photo of Basil McCrea Basil McCrea UUP

I am pleased that the Utility Regulator has decided to submit some ideas.

Will the First Minister agree that energy policy is integral to any future economic policy? The price of energy is important; it is the bottom line for many people, and it is at the heart of competitiveness. Will he accept, therefore, that it is OFMDFM’s role to develop a strategic energy policy? If so, does he have such a policy, and what is it?

Photo of Peter Robinson Peter Robinson DUP

Had the Member been in the House during the previous mandate of the Assembly, he would know that energy policy was originally in the remit of the Department for Regional Department for which I was the Minister. His leader strongly argued that the policy should be transferred to the Department of Enterprise, Trade and Investment. He is, therefore, at odds with his leader. [Interruption.]

Photo of William Hay William Hay Speaker

Order, Members.

Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin

I remind the First Minister of the letter that he received at the start of September from the deputy First Minister. One of several proposals to deal with fuel poverty included in that letter was the possibility of repatriating the VAT windfalls that accrue to the British Treasury. Will the First Minister confirm that he raised that possibility at his recent meeting with Gordon Brown?

Photo of Peter Robinson Peter Robinson DUP

My recollection is that the deputy First Minister raised several such issues during the meeting with the Prime Minister of the United Kingdom. The Assembly must consider providing an overall package to assist the people of Northern Ireland. There is no simple switch to flick that will suddenly make the situation better. The crisis will remain with us for some considerable time and, therefore, a co-ordinated, long-term approach is required.

I do not object to asking people for assistance, but that is not enough. The Assembly has power over mechanisms that can be used to alleviate some of the difficulties that people are experiencing, and should not, therefore, rely solely on others.

Photo of Alasdair McDonnell Alasdair McDonnell Shadow SDLP Spokesperson (Health), Shadow Minister (Europe), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Northern Ireland)

Will the First Minister agree that people are becoming increasingly bewildered by how rising oil prices pushed up electricity prices but falling oil prices have no effect on bringing them down? In that context, will he accept that the commissioned review of the process of setting electricity tariffs will have little or no effect on price? The review will assess how the tariffs were set rather than change the price of electricity.

Photo of Peter Robinson Peter Robinson DUP

People are right to wonder about that conundrum. However, a further conundrum is that Northern Ireland has gas-fired, not oil-fired, power stations. Therefore, the price of oil should not be the key factor. It is important that the Utility Regulator and the Assembly deal with several issues. The review was set up as a result of a request from the deputy First Minister to the Utility Regulator, who, in turn, has appointed Douglas McIldoon to carry it out. It is important to use his experience and cross-check the furnace of current prices.

Photo of Dawn Purvis Dawn Purvis PUP

The House recognises the need for an overall package to tackle the issues. Electricity and gas produced profits of over £14 million for the gas company and over £81 million for the electricity company. Given that, what discussion took place during the Minister’s meeting with the Utility Regulator about reducing those companies’ profit margins?

Photo of Peter Robinson Peter Robinson DUP

The deputy First Minister and I raised that point — as did some of our advisors — with the Utility Regulator, which argued — and do not pin it on me — that the profits are required in order to fund further research and further capital investment in the industry. Therefore, that profit level is considered necessary. It will be interesting to discover whether Douglas McIldoon agrees with that assertion.