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Press Release - 10th March 2011

With retail gas prices predicted to increase from next month, Mutual Energy is pleased to be able to help alleviate price rises for Northern Ireland’s electricity customers. For the ninth year in succession, Mutual Energy Limited will be able to avoid charging Northern Ireland customers directly for the costs of operating the Moyle Interconnector, the 500 megawatt subsea electricity connection between Scotland and Northern Ireland. In order to minimise electricity prices to consumers in the year April 2011 to March 2012 Mutual Energy has made the decision to allocate another substantial contribution from its Moyle Interconnector business reserves.

This year the company is leaving money in the pockets of Northern Ireland’s energy consumers with a contribution of £13.6 million, following up on a contribution of £12.9 million last year. This means the company has continued with its track record of keeping electricity prices to consumers significantly lower than they otherwise would have been by not having to call on customers to contribute to the cost of operating the Moyle Interconnector, which plays an important role in ensuring security of Northern Ireland’s electricity supply as well as providing access to cheaper power in Britain.

This saving is in addition to the savings on the cost of capital associated with the mutualisation of the Moyle Interconnector, which are estimated to be approximately £20 million to the end of March 2011, a saving of nearly 24 per cent on the non-mutual case.

Commenting on Mutual Energy’s latest contribution to keeping electricity prices in Northern Ireland down, Chief Executive Paddy Larkin said “This announcement is good news for consumers, particularly at a time when rising wholesale energy prices will be feeding through to consumers’ bills. It means that the expected shortfall between our revenue and our costs in 2011/2012 will be funded by our reserves and not by increasing customer tariffs. In the current economic climate, when customers are struggling with other rising costs and falling incomes, we are delighted to be in a position to provide this assistance.”

In explaining the figures he added “Although the interconnector is still essential for keeping the lights on in Northern Ireland, the Single Electricity Market does not adequately reward this security of supply and we continue to work with the Regulators to resolve this issue. Additional pressures, including compliance with EU legislation and the forthcoming commercial operation of the new East-West interconnector between Dublin and Wales is likely to mean we cannot avoid the prospect of charging Northern Ireland consumers for the operation of Moyle forever.”

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Notes for editors

1. Mutual Energy Limited is a company limited by guarantee. Its principal objective is to own and operate energy infrastructure assets in the interests of the energy consumers of Northern Ireland. The company is a mutualised entity and therefore has no shareholders and its primary stakeholders are energy consumers

2. The Moyle Interconnector is the electricity link between Northern Ireland and Scotland which was mutualised in April 2003. It was acquired by former owners Viridian and refinanced on a £135 million 30 year bond.

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