ESB Annual Report 2012 - (Page 30)

30 ESB Annual Report 2012 - Energy for connecting you NIE NORTHERN IRELAND ELECTRICITY (NIE) IS RESPONSIBLE IN NORTHERN IRELANDFOR THE PLANNING, DEVELOPMENT, CONSTRUCTION ANDMAINTENANCE OF THE TRANSMISSION ANDDISTRIBUTIONNETWORK AND FOR THE OPERATION OF THE DISTRIBUTIONNETWORK. OPERATING ENVIRONMENT NIE derives its revenue principally through charges for use of the distribution system and Public Service Obligation (PSO) charges levied on electricity suppliers and charges for transmission services (mainly for use of the transmission system) levied on the electricity transmission system operator in Northern Ireland (SONI). NIE is regulated by the Utility Regulator and the Department of Enterprise, Trade and Investment (DETI). NIE is subject to a price control, defined in a formula set out in its licence. The principles of price regulation in the licence conditions reflect the general duties of the Utility Regulator and DETI under the relevant legislation. These include ensuring that NIE can finance its authorised activities. NIE’s fifth five-year price control (RP5) which was due to commence on 1 April 2012 has been delayed. €118M THE CAPITAL INVESTMENT MADE ON THENETWORKS SYSTEMIN NORTHERN IRELANDIN 2012 In April 2012, the Utility Regulator published its draft determination for RP5 for consultation. The Utility Regulator’s final determination was published in October 2012 and NIE responded on 20 November 2012, advising the Utility Regulator that regrettably it was unable to accept the Utility Regulator’s proposed terms for the RP5 price control. NIE has not taken this decision lightly. The allowances proposed by the Utility Regulator fall substantially short of the amounts required 110KV Single CCT 110KV Double CCT 275KV Single CCT 275KV Double CCT Moyle HV DC Link Powerstation 275KV Substation 110KV Substation to enable NIE to meet its statutory and licence obligations and to carry out the necessary programme of work for RP5 to deliver the level of service that NIE’s customers expect. Since both NIE and the Utility Regulator consider that the present price control requires modification, NIE now expects the Utility Regulator to refer the matter to the Competition Commission. INVESTMENT AND GROWTH Since its privatisation in 1993, NIE has made significant investment in network infrastructure. During the period NIE has continued to invest in its infrastructure to replace worn network assets, to accommodate increasing load and new consumer connections and to meet requirements in respect of the connection of renewable generation. In addition, a new billing and market IT system, to facilitate full retail competition in the Northern Ireland electricity market, was successfully implemented in May 2012, in conjunction with ESB Networks. In its business plan submission to the Utility Regulator for RP5, NIE proposed that the

Table of Contents for the Digital Edition of ESB Annual Report 2012

ESB Annual Report 2012
Contents
Business Overview
Chairman’s Statement
Chief Executive Review
Our Strategy and Business Model
Operating and Financial Review
Operating Environment
Finance Review
Business Unit Sections: ESB Generation and Wholesale Markets
ESB Networks
NIE
Electric Ireland
Corporate Social Responsibility
Introduction from Executive Director, People and Sustainability
Sustainability Charter
Energy Usage 2012
ESB Innovation
Equality and Diversity
Our People
Our Community
Corporate Governance
Chairman’s Corporate Governance Statement
The Board
Executive Team
Board Members’ Report
Risk Management Report
Statement of Board Members’ Responsibilities
Independant auditor’s report to the stockholders of Electricity Supply Board (ESB)
Statement of Accounting Policies
Financial statements
Prompt Payments Act

ESB Annual Report 2012

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