§ Mr. LidingtonTo ask the Secretary of State for Northern Ireland if lie will make a statement on how he plans to implement his policy of using public expenditure to reduce the costs of electricity to business. [166016]
§ Mr. GardinerThy; proposed intervention is part of the continuing drive by Government to reduce the higher electricity costs paid by Northern Ireland businesses in order to improve their competitiveness. The objective is to bring about an average reduction in electricity prices across the business sector of 10 per cent. below the levels they would otherwise have been.
The proposal is designed to address an element of the legacy costs which followed the 1992 privatisation of the Northern Ireland electricity supply industry. In particular, the intention is to remove the ongoing financial obligation on Northern Ireland Electricity plc (NIE) arising from the restructuring of the original 657W Ballylumford power station generation contract. The cost of meeting this obligation is currently passed on to the electricity consumers as a Public Service Obligation (PSO) charge.
Subject to the necessary State aid clearance, the proposed Government intervention would be provided to NIE to offset the equivalent cost to the company of meeting this obligation. The full benefit of the intervention would, in turn, be passed on by suppliers to business customers through a reduction in their electricity bills.