Social and Environmental
Sustainability – The Regulators Role
The Utility Regulator has a vital role to play in promoting sustainability as we are the main gate keepers to infrastructure investment in three sectors with high environmental impact, water, gas and electricity. In March 2008 the Utility Regulator published a paper entitled “Sustainability – the Regulator’s Role.” The paper states that the Utility Regulator has a role to play by gathering and publishing more information, contributing its expertise and experience to wider government policy and regulating differently.
Northern Ireland Sustainable Energy Programme (formerly the Energy Efficiency Levy
Regulatory energy efficiency programmes have been running successfully in Northern Ireland since 1997-1998 when the then Office for the Regulation of Electricity and Gas (now the Utility Regulator) introduced the Energy Efficiency Levy Programme (EEL). As initially conceived the EEL was introduced to implement energy efficiency schemes for domestic consumers with the aim of reducing carbon emissions. However with the eradication of fuel poverty steadily moving up the ladder of Government priorities, and as a result of a consultative process in Northern Ireland, it was decided that the majority of levy funding (80%) would be targeted at helping to alleviate fuel poverty by improving poorly heated and inadequately insulated properties. The remaining 20% is available for energy efficiency and emission reducing projects in the domestic and business sectors.
The Utility Regulator conducted a review of the EEL in August 2008 and published its decision paper in March 2009.
2009/10 will be the last year of the EEL in its present form. From 2010/11 it will be known as the Northern Ireland Sustainable Energy Programme (NISEP). The main features of the EEL remain but changes to be introduced include:
- allowing innovative and renewable technology schemes to be included in the bids for funding;
- opening up the right to bid to organisations other than licensed electricity suppliers (in a phased approach); and
- revising the target setting and incentives mechanism.
The Framework Document has been revised to incorporate the first stage of the changes arising from the review and to introduce the new branding and branding guidelines of the Programme. The new Framework Document, which will apply to 2010/11 NISEP Schemes was published in September 2009. Further work is ongoing to develop a Framework document covering the second stage of the changes.
The Northern Ireland Renewables Obligation
The Utility Regulator has statutory responsibility for the Northern Ireland Renewable Obligation (NIRO). 2008/09 saw a significant increase in interest in renewable generation, both large scale and small with many projects coming on line.
The NIRO is managed by The Utility Regulator although administered by our sister organisation Ofgem, London via an Agency Services Agreement (ASA) between both parties. The reason for this modus operandi is cost and the maintenance of a seamless UK Renewable Obligation. The April 09 report covering the operational year 2007-08, on the running of the Renewables Obligation, which includes comparisons between Northern Ireland, Scotland, and England and Wales can be found at http://www.ofgem.gov.uk/
The Climate Change Levy Exemption Scheme
Throughout the year the Utility Regulator has also managed and administered the Climate Change Levy scheme, issuing Levy Exemption Certificates to accredited generators in NI and RoI. The Climate Change Levy (CCL) is a tax on energy used by businesses. It was announced in the March 1999 budget, and implemented on the 1st of April 2001. In relation to electricity the CCL requires suppliers charge commercial customers (i.e. business not domestic, governmental or charitable customers) an extra 0.44p per kWh (i.e £4.41 per MWh), which monies are then remitted to the government, where they are used to fund a national insurance contribution break and energy saving programs. Electricity produced from designated renewable and good quality CHP sources is exempt from CCL, and is issued with exemption certificates which can be bundled with the power when sold to a supplier.
Social Action
The Utility Regulator’s cross-cutting remit represents a unique opportunity for a single organisation to bring forward a coordinated strategy for the protection of vulnerable customers in the provision of these essential utility services.
The Utility Regulator has now published (October 2009) a Social Action Plan for the 2009-2012 which contains actions to be taken forward by all departments, to help protect and support vulnerable customers. The actions are categorised under five main headings:
1. Reducing Financial Insecurity
2. Equal Access to Utility Services for Vulnerable Groups
3. Energy and Water Efficiency
4. Working with Others
5. Monitoring and Review of Social Action Plan
This Social Action Plan was developed following extensive consultation with a wide range of stakeholders. Customer research was also carried out in partnership with the Consumer Council for Northern Ireland (CCNI). Further details of the process, including a summary of responses to the consultation on the draft social action plan, are also given in the Social Action Plan Decision Paper which was also published in August 2009.