Official Report: Minutes of Evidence

The Chairperson (Mr Brett): I welcome John French, who, as members will know, is the chief executive of the Utility Regulator (UR). I hear that he has just completed another Great North Run.

Mr John French (Utility Regulator Northern Ireland): Right. Yes.

The Chairperson (Mr Brett): You were the second most famous person to do it, after the Prime Minister, John. [Laughter.]

Well done.

Mr French: Hopefully not.

Mr Martin: You are testing me, John.

The Chairperson (Mr Brett): I also welcome Shauna McAuley, who, as colleagues will know, is the head of legal services at the Utility Regulator. We are delighted that you are here. This Bill is all about you, so we are keen to hear your views on it and on any and all suggested amendments that you or may not wish to see. I hand over to you, John.

Mr French: Thank you, members, for the opportunity to give evidence today. The Bill would provide a statutory basis for the Utility Regulator to give advice, information and assistance to the Department for the Economy in connection with the preparation of proposals, policies and plans relating to energy decarbonisation.

It is important to be clear from the outset about the effect of the Bill. It would not alter the Utility Regulator's independence, statutory duties or decision-making functions. Responsibility for policymaking would remain with the Department and, where appropriate, the Assembly. The Utility Regulator's role would be confined to the provision of relevant technical, regulatory and market expertise. We note that some consultation responses identify matters for further consideration, including the scope of the proposed powers, consumer protection, funding arrangements, emerging technologies and the wider energy regulatory framework. Some of those issues may fall outside the immediate scope of the Bill and require separate policy or legislative consideration.

In practice, any request made under the proposed provisions would need to be considered with reference to its scope, the resources required, the Utility Regulator's existing statutory duties and the potential impact on existing work and our core regulatory functions. Where appropriate, the Utility Regulator would engage with the Department to ensure that any assistance that it provided was proportionate and properly governed. The Bill would not alter the Utility Regulator's existing statutory responsibilities to consumers. Any advice, information or assistance provided to the Department would need to have regard to the potential impact on current and future consumers, including vulnerable consumers and those households unfortunately experiencing fuel poverty. Funding arrangements would need to be clear, transparent and agreed in advance, particularly where the work fell outside the Utility Regulator's existing electricity and gas functions. Any expenditure should be proportionate and subject to the appropriate governance.

In conclusion, the Bill should be considered as a specific and limited measure concerning the provision of advice, information and assistance to the Department. The Committee's scrutiny is obviously important in considering the scope, safeguards and practical implications of the proposed provisions. It will also be important that the use of the proposed power is clearly defined and proportionate and that it does not displace the need for wider consideration of a full regulatory framework for energy decarbonisation. Any legislation would need to preserve the Utility Regulator's independence, maintain the clarity of the roles of the Utility Regulator and the Department, and be subject to appropriate governance.

Thank you, Chair. That is our opening statement.

The Chairperson (Mr Brett): Thank you very much indeed, John. We will get into the nuts and bolts of the Bill. Do you support it in its current form, or are there any changes required?

Mr French: It moves the dial a notch. There is a bigger question about wider energy legislation and the role of the Utility Regulator. The most recent major update of the Utility Regulator's legislation was back in 2003. In that time, Ofgem has had 15 or 16 significant additions to its legislation. As members may know, there has been a recent review of Ofgem that is considering a further raft of measures to provide for it. If Northern Ireland is to have the same regulatory powers as GB and Ireland, we need to be brought up to date. The Bill moves things a notch, but there is a wider question about where Northern Ireland needs to be in the whole decarbonisation debate.

The Chairperson (Mr Brett): I get that, and the Committee as a whole supports further legislative change, but I come back to the Bill that is before us. Obviously, the competency of this Bill would not cover the full spectrum of issues that you have been highlighting for a considerable period. Individual colleagues have raised specific issues. When it comes to the competency and scope of the Bill, do you believe that any amendment can be tabled that — to quote you — "moves the dial a notch" further along? For example, do you think that the Committee should consider trying to use the Bill as a vehicle to amend the Utility Regulator's objectives with regard to supporting decarbonisation and the move towards climate change targets? Do you believe that we should expand your powers so that you do not just, rightly, advise the Department for the Economy, meaning that other Departments can take advantage of your expertise and seek advice directly rather than go through the Department for the Economy? I am sure that colleagues will raise other points.

Throughout our evidence sessions, we have received numerous pieces of correspondence and representations saying that the Bill is important and moves the dial a notch, but that it could be improved. What I am just trying to seek from you is whether there are any specifics — I note that we have the head of legal services here, who would be much more competent in their view than I would be about what is within the scope of the Bill — that you would support us, as a Committee, bringing forward? Ultimately, this is the last chance saloon. You are the last people whom we are hearing from. There will not be another Bill that relates to the Utility Regulator in this mandate. If you want something, I encourage you to say so now.

Mr French: It is the Department's role to bring forward policy and our role to implement it. All regulators in Europe are independent. We are a non-ministerial Government Department. There are reasons why it is important for a regulator to be independent and outwith the political cycle. As we said in our evidence in response to the consultation, we believe that we should be able to give that advice to all Departments. The Department for the Economy has a slightly different view on that, but I think it would be helpful. When it comes to where we think other things need to be, a raft of measures is needed to bring us up to date, as I said, with GB. We have rehearsed that before. Those measures are significant and need to be thought through. Whether there is the time and space to do that in this mandate, I do not know. We have made very clear what we feel we are lacking as a regulator compared with our nearest counterparts and those within Europe. Those measures will need to be addressed at some point.

The Chairperson (Mr Brett): Therefore, with regard to the point that you started on about advice across Government, you would support a position, if the Committee were to adopt it, that we would alter your vires so that you could advise across Government and not just a single Department.

Mr French: Yes, because that is the independent nature of the Utility Regulator.

Mr Honeyford: Thanks for coming in. Last week, we heard from the Competition and Markets Authority (CMA). It talked about home heating oil, which is what I want to look at. The price is shooting — rocketing — up, yet it comes down like a feather. We talked that through. If we are looking to protect customers and homeowners, how can we do that when the Utility Regulator does not have oversight over wholesale oil markets?

Mr French: As Shauna continually reminds me, we are a creature of statute: we can do only what is in our legislative power. That is essentially because the Utility Regulator is like a County Court": we have significant powers, but they are constrained and provided to us by the Assembly or Executive. At the moment, we cannot do anything on heating oil. We note the CMA's recommendations. Yesterday, we were talking to Ofgem, which has been provided with those duties for heating oil in GB, about how it is taking that forward. The Utility Regulator, by its nature, already has things like a compliance and enforcement team, a consumer protection team and codes of practice in place with energy suppliers. As you might have seen, there was an alternative resolution made last week with Electric Ireland for £750,000 because it had not fulfilled its licence duties. Those are important things that the regulator can bring forward.

As I mentioned to the Committee at the last evidence session, we think that we are unique globally in bringing in one customer care register for Northern Ireland — well, two initially: one for energy and one for water, with the idea that they will join. Vulnerable people who have extra medical needs will be on that care register. That could then be extended to heating oil customers. We are working very closely with the Information Commissioner's Office (ICO) to make sure that there are no GDPR concerns around that. It is a policy issue. Essentially, it is for the Department or the Assembly to decide where that duty falls, but, as I say, we are looking closely at what Ofgem is doing in that regulatory space in Great Britain.

Mr Honeyford: The Bill is for preparation for decarbonisation of the energy sector. The background to that is the Executive's energy strategy, which aims:

How can you achieve that without any oversight of what people currently have, given that their costs are through the roof?

Mr French: We cannot. As the Bill stands — Shauna, correct me if I am wrong — we would have to be directed by the Department to look at heating oil. We have no powers to do that at the moment.

Mr Honeyford: You talked about Ofgem and the raft of powers that it has, and you said that Ofgem has already got that power in the UK. If that were to come, what would it mean for the Department? What would be the cost to the Department, and what additional work would the Department need to do? Are there major implications?

Mr French: It would be about bringing in legislation to enable the Utility Regulator to carry out that role.

Mr Honeyford: If that happened, would there be massive upset within the Utility Regulator over the amount of work that you would have to do? What is the scale of that?

Mr French: As I mentioned, those actions are already in place when it comes to consumer protection, consumer enforcement, the codes of practice and the consumer care registers. We already have those in place. The work would be about understanding the differences between the oil industry and the gas and electricity industries and the players that are involved.

Mr Honeyford: Finally, the CMA hinted that the Department was looking at the Consumer Council — it does some great work on this; I am not in any way knocking it — as the direction. I do not understand how that works. Is the Utility Regulator not the best place for the powers to reside?

Mr French: I used to be the chief executive of the Consumer Council, so I completely agree that it does excellent work. The oil tracker has been there for years, and the Consumer Council works closely with the Oil Federation on one thing and another and brought in codes of practice with the Oil Federation. The Consumer Council is a consumer advocacy body, while the Utility Regulator has a different role. We are meant to be the fulcrum, or whatever you want to call it, between consumers and industry. We are meant to be the fair broker between the two. It is no disservice to the Consumer Council or anything like that; it is just a different role. Ultimately, it is not our policy. If it is decided that the Consumer Council takes that forward, that is a decision for the Minister.

Mr Honeyford: Finally finally from me, people at home have seen the price of their home heating oil double in the last year. I am not suggesting that the Utility Regulator will in any way be able to control world prices, but would it strengthen this Bill so we can provide affordable energy to homes to allow that transition, with home heating oil being part of that, and by giving you the power to look at that section of the market?

Mr French: Ultimately, it is a policy decision, either for yourselves as an Assembly or the Minister, to determine how the CMA's recommendations are taken forward. We are able to use our existing frameworks and infrastructure to support that, if that is the decision.

On your wider point, we are really concerned about energy prices. This morning, just before we came in, we were looking at the gas price, which, last week, jumped to £2 per therm. That has not been seen since the Ukraine crisis.

A few weeks back, we announced an increase of nearly 20% in SSE's prices and a 10% increase in Firmus's prices. That was when the market was about £1·71 or £1·50 per therm. Prices are increasing. On future prices, there is no let-up in the market's prediction for next year. The slight difference is that heating oil is a spot market, so you are buying it at the price it is on the day. Gas and regulated markets are a hedge market, so the price is blended. Still, the outlook does not look great, and I think that it will be difficult for consumers coming into this winter and next winter if things do not change.

The Chairperson (Mr Brett): Thank you. John, on the CMA's recommendations, last week, I tried to tease this out from its representatives when it gave evidence to the Committee. I was slightly unclear. Does the Utility Regulator have a view on some of the recommendations that the CMA made, for example on the vulnerable customer register that it discussed? I am not quite sure that it understands the intricacies or the differences in Northern Ireland. With utility providers, there are two or three big ones that are easy to do. Across Northern Ireland, the number of oil providers is in the hundreds. I am not sure that it had thought through the recommendation for a centrally accessible database that all of those providers would feed into and be part of. For example, some people will never interact with an oil company in Northern Ireland. People are transactional. Rightly or wrongly, they go on to the oil price checker website that you may have introduced when you were head of the Consumer Council. They find the cheapest price and order, and they may never have another relationship with the company. People are much less likely to change their main utility provider. I read an interesting stat in 'The Independent' that, in parts of the UK, people are now more likely to get divorced than they are to change their service provider. With that in mind, do you have a view on how that would be done and managed?

Mr French: The goal for us is to get a single care register for energy. At the moment, the information is held by the likes of NIE Networks. The register would cover all the electricity suppliers and all the gas suppliers. Electricity covers everybody, so, if you are a vulnerable customer with electricity, you are likely to be a vulnerable customer with oil. That read-across would be reflected in that register. It is really important that we are able to get that single register for Northern Ireland.

The Chairperson (Mr Brett): Would all energy providers then have access to it?

Mr French: All energy providers would then have access.

The Chairperson (Mr Brett): But —.

Mr French: The important thing is that we have really had to work on this with the Information Commissioner's Office.

The Chairperson (Mr Brett): That is what I was going to say. A lot of those providers are small, independent providers. They may be in a town or village and only provide to their local community. If that regulation, if that is the correct terminology, were to be introduced, they would then need to be trained in data retention and advised on how to access that training. They may need to have a designated information officer. Does it become very cumbersome on those small, independent providers?

Mr French: It should not, because they need to do that in the first place with their current clients. The ICO has allowed us to do that because it is a regulated industry.

The Chairperson (Mr Brett): Oil is not.

Mr French: Oil is not at the moment. There are licences with the companies that ensure that they will have to fulfil certain things around information governance. That is what has enabled us to take forward the information-sharing process in the proposed care register.

Ms McLaughlin: Thank you for your answers so far, and congratulations on your run, John.

Some of these questions are, kind of, overlapping. Phillip started out by asking whether there is anything that you want in the Bill. The Bill is very limiting, and we have one shot at it, so we want to make sure that we as a Committee do the scrutiny justice.

Picking up on something that David said, I want to be clear about this. If your advice to the Department, for example on the just transition principle, is ever in conflict with the Consumer Council's advice, which advice takes precedence?

Mr French: Our statutory duties will always take precedence. We have similar, if not the exact same, duties to protect consumers as the Consumer Council, so there should not be such a conflict.

Ms Shauna McAuley (Utility Regulator Northern Ireland): We also have a memorandum of understanding in place, Sinéad, with the Consumer Council on our roles and the segregation between them. That is likely to be laid before the Assembly if it has not just been laid.

Ms McLaughlin: That is interesting. It is really important in this context. Further to what David said about the home heating oil sector and how it sits completely outside your remit, have you advised the Department that the decarbonisation policy cannot work if that regulatory gap stays in place? What kind of conversations have been had in and around that in relation to home heating oil and how we progress with the Bill? Is there any conversation at all about that?

Mr French: I am not aware of there having been any conversation on heating oil. That is not to say that there has not been work at different levels, but I am not aware that there has been any conversation at my level.

Ms McLaughlin: That will have a real impact on decarbonisation and the targets that we will not meet.

Mr French: That is essentially why there has been the encouragement to "use gas where gas is available". Gas is a fossil fuel, yes, but if you move from heating oil to gas, there is a 30%, if not higher, reduction in carbon emissions. That is why, historically, Northern Ireland has pushed for gas in Belfast, the 10 towns and the west. It was originally for carbon-reduction reasons. Gas is seen slightly differently now, as it is a fossil fuel, but there is a clear carbon saving at the moment. Still, at the end of the day, 30% of households will never be able to access the gas network, so it is about looking at how those households will move to a low-carbon/no-carbon heating source.

Ms McLaughlin: In the responses to the consultation, lots of stakeholders highlighted the potential role for hydrogen and whether the Bill should be amended to give greater clarity to the Utility Regulator on the role of regulating hydrogen power.

Mr French: We do not have any powers at the moment. The Gas (Northern Ireland) Order 1996 is around methane rather than hydrogen. Hydrogen was seen as a slight silver bullet a few years ago, but that has been the case less and less. It is being seen more as an industrial, rather than domestic, heating source. We were at the Council of European Energy Regulators yesterday, talking to the French regulator about how they are taking hydrogen forward. They are very much seeing it as an industrial heating source, not as a domestic heating source. A couple of years ago, it was seen as the future, but now that they are realising the complexity of it, due to the size of the molecules and one thing and another, it will be used more for industrial purposes.

Ms McLaughlin: So, there is no —?

Mr French: Sorry, to your point: the Bill could mention something to do with hydrogen. We have no powers in that regard, at the moment.

Ms McLaughlin: Yes. Do you not want them? Do you not think that they are necessary?

Mr French: That is a policy decision. If the Minister —.

Ms McLaughlin: I suppose that what we are really trying to get at is this: in order for your office to be more efficient etc, what extra powers do we need to make sure are in the Bill? We have one shot at it. In taking evidence, we really want to be clear about where you see the gaps and where you think we, as a Committee, should be looking to amend the Bill to make it more appropriate for the future.

Mr French: As it stands, the Department could ask us to do work on hydrogen, but we have no funding mechanism for that at the moment. Through our legislation, we can only fund things through electricity and gas licence holders. If the Department wanted us to do work on hydrogen, it would need to fund the work itself.

There are two things to a regulator: you need to have the legislative powers to do the work, but you also need the legislative powers to fund the work. At the moment, we can only use electricity licence-holder money for electricity work and gas licence-money for gas work. The Government in GB have brought legislation forward that allows electricity and gas licence-holder fees to be used for heating oil and district heating until those regimes are more mature and fully developed. At the moment, if the Utility Regulator were asked, through the Bill, to do work on hydrogen, we would need to be provided with the necessary funding, because we do not have the means to raise it through our current statutory abilities.

Mr Martin: Thank you, Chair, and thank you for managing to get a McFly reference to introduce John in the first place. It is 'All About You' today, John, so well done, Chair. It is great to see you at Committee, John; obviously, we have done work together in the past.

Before I get into the detail, I will pick up on the gas price issue that has been referenced — David probably brought it up. You, rightly, said that one of the reasons for it is that the retailers are trying to hedge and look at future forecasts, and so forth. The gas prices are probably high, not just because of the situation in the Middle East but because that has driven competition in Europe, with countries competing against one another, and that is driving up the gas price. Is that your understanding of why we have slightly higher gas prices at this time? Do you foresee those coming down?

Mr French: The main reason is the Iranian conflict. It is 99% due to that. There are other factors. We met with the French regulator yesterday. They have huge nuclear power stations, but they are having problems with jellyfish coming around their outflows, and things like that, so they cannot use their nuclear power stations so much and are having to use gas-fired generation. There are things like that. There have also been problems with some of the Norwegian fields and their exports of natural gas, but the main driver is the Iranian conflict. You can see that clearly. When anything happens, the price spikes. Unfortunately, current market sentiment is that the high prices are here to stay for at least another year.

Mr Martin: Clause 1(2) states:

I had a look at the explanatory and financial memorandum (EFM). It is not particularly helpful, but it tells us that it is a "qualified duty" and gives us one sort of example of a qualified duty. You could refuse the Department if you have:

Have you scoped out any other circumstances in which, if the Department requested something, you could say, "No", based on the drafting of that clause? Have you considered that clause and the implications for the Utility Regulator?

Ms McAuley: Yes, we have.

Mr Martin: I bet you have. [Laughter.]

Ms McAuley: It is deliberately framed as not being a rigid, formulaic process to allow a two-way conversation with the Department about what is a reasonable request. There are other factors — not just financial resources. There is also staffing, and independence is a big one from our perspective. If a request were made, which, in our view, had any bearing on independence, I would consider that it would be reasonable to refuse such a request. To make it too formulaic ties our hands when we are trying to work with DFE on the overall decarbonisation target. There was a lot of toing and froing on the wording and trying to find a fair balance in it. However, that is where we have landed, with "reasonable".

Mr Martin: I will tease that out. From your answer, it sounds as though you, as the Utility Regulator, are generally content with the drafting of the clause. It is one of the key clauses in the Bill. Are you generally content with how it is drafted, and content that it gives enough scope?

Ms McAuley: It is one of those things: until you play something out in day-to-day life, you do not know how it will work fully. Equally, having something entirely formulaic will not work either. It is a balance between predicting the questions that will be asked and deciding whether those are reasonable asks for the Utility Regulator to respond to. We see it as a safeguard. It safeguards our work, our independence and our resources, but it enables us to assist DFE.

Mr Martin: That is fine. My other question is a bit more lateral. You can keep me right because I am so new to the Committee. All my questions are genuine.

Mr Honeyford: And ours are not? [Laughter.]

Mr Martin: I had better not comment on that. It is my first day, David.

The Chairperson (Mr Brett): We are not meant to ask questions that we know the answer to, David.

Mr Martin: That is more or less where I was going with it, Phillip. They are honest questions.

Have you indicated, perhaps in previous evidence that I have not heard, being new to the Committee, that electricity consumption is, or will be, lower than you expected as the Utility Regulator for Northern Ireland? Is it fair to say that, or do you want to reframe the question?

Mr French: Electricity consumption has been falling for the past 10 years as we have deindustrialised and as people have adopted energy efficiency measures. We need a demand strategy. We are building all the new wind farms and, potentially, interconnectors and such things, so we need to know the demand. Electricity is not like gas. Gas can just sit in the pipe until it is used. Electricity has to balance — it is an equation — and there have to be the wires to transport it. One side of the equation is building more renewables and more generation; we need the other side of the equation to say what the extra demand is that will use it.

Mr Martin: OK. That is useful. From looking at some of the stuff here, my understanding is that part of that is to do with low uptake of EVs and heat pumps. My understanding from a previous position is that our EV uptake is about 5% below the uptake in the rest of the UK. There are probably reasons for that. Ultimately, John, the question that I am moving towards is this: is it fair to say that lower demand means, in essence, that someone is not making money, which might end up in higher tariffs to recover costs? Will we look at that?

Mr French: That is 100% correct. Gas and electricity prices are essentially based on a fraction. You pay x for it and then divide that by your usage. The more usage there is, the more the costs are spread. That is why a demand strategy is really important. It is important that people use the energy that is produced, because that means a lower price for everybody.

Mr Martin: If it is OK with the Chair, I have a final question. I am learning a lot. My understanding is that we generate more electricity than we need, and we do not really know what to do with it. Is that the case? That is another silly, honest question. Do we generate a lot of electricity that we do not really know what to do with, cannot store properly and cannot sell properly?

Mr French: Yes, but there is a reason for that. Essentially, we are building two power systems. We have a renewables system, and you saw the higher percentages of renewable penetration recently. That is great when the sun shines and the wind blows, but, if that does not occur, you need conventional power stations behind it. Essentially, we are funding two power systems. One is for when things are working well and the sun is shining, and it produces lower prices, but we are also paying for the guarantee — the insurance — so that, if that does not happen —

Mr Martin: You have a backup.

Mr French: — we have a backup. That is why our energy is more expensive than that in other regions. A lot of European countries have hydropower, nuclear power or large-scale solar due to their climate, but we do not. Ours is a gas-fired backup system. We have seen the price of natural gas spike so much with the Iranian conflict and Ukraine. Essentially, our higher cost is because our insurance system is gas-fired power stations.

Mr Kearney: I will make a point at the outset, before moving to my questions. It is slightly tangential, but it goes back to the earlier conversation about oil prices. As we discussed, they are going through the roof. My very strong view is that oil prices need to be capped. I accept that it is not a regulated industry, but we have a very high dependence on oil in our regional economy, which means that the most vulnerable citizens in our community depend on oil for heating and energy. It looks as though we are in a perfect storm, with the scenario in the Strait of Hormuz, and now the situation in the Bab al-Mandab Strait. You said that there is no indication that prices are going to come down. That has a repercussion for gas as well, so it overlaps with the topic at hand. There is a repercussion from all of that for our move away from fossil fuels and the attempt to move to renewables. I realise that I am repeating my very strong view, Phillip, and that we are —

The Chairperson (Mr Brett): No, no; it is important.

Mr Kearney: — slightly off topic, but it is absolutely essential that we find the vires or the mechanisms to ensure that oil prices are regulated generically, but particularly to protect the most vulnerable. It is an unacceptable situation, and there is price gouging going on. The greater consortia, particularly in Europe but further afield, see such crises as an opportunity, and they speculate on the hardship of the most vulnerable in our society, and on the supply chain of gas, oil and so on.

It has been suggested that the vires of the Utility Regulator should be expanded, to which you are open. Have you carried out any type of horizon scanning of what the logistical implications of a further expansion of your powers would mean when it comes to the provision of service to other Departments in terms of workforce planning, capacity, expertise and so on?

Mr French: Yes. We are a helpful organisation; we try to help. I suppose that this would just formalise that through a Bill. If we are able to provide technical support, we do so. We monitor the market significantly. We have great expertise across the organisation, and we are willing to help and provide services to anybody who wants them.

Mr Kearney: Have you done horizon scanning in relation to the logistical implications of that? Are you saying that there is not going to be a cost?

Mr French: We do not know what the ask is from the Departments as yet. They have not stated what work they want us to do. We believe that we have the appropriate technical knowledge and skills in the organisation and that we are currently staffed to roughly the right levels. However, if a body of work were to come in from a Department that we did not expect, we would have to work out how we would support that.

Mr Kearney: If I hear you correctly, you are saying that, in general terms, you have the capacity and the workforce to underpin an expansion of your vires.

Mr French: Yes.

Mr Kearney: Grand.

Mr French: Just to go back to your previous point about oil prices, I do not disagree with you for one moment. The CMA's proposals do not look at the price regulation of heating oil. You are right that the likes of BP, Shell, TotalEnergies and all those companies are making significant profits, but they are not local to Northern Ireland. Those profits are made at a different level. It is for national Government to say what can be done about those prices. I guess that that has been looked at.

Mr Kearney: We discussed that with them, and I know that their proposals do not extend to regulation. I am making a separate political point: it is unjust and immoral that there is no price regulation of oil in the current circumstances in which we find ourselves, particularly because, when you look at the geopolitical landscape, you see no prospect of stability. Increased instability is a direct consequence, combined with outrageous price gouging, which derives directly from larger consortia speculating on the back of geopolitical instability and crisis. Our constituents, especially our poorest constituents — pay the price for that. We are consensus ad idem on that point. I simply think that that has to be addressed.

Ms Forsythe: Thank you, John, for coming to speak on this matter. You mentioned that the previous update to our Utility Regulator legislation was in 2003, and in the meantime, Ofgem saw some 15 or 16 updates to its legislation. That is a significant difference over that period. Correct me if I am wrong, but you said that you would have liked to have seen more legislation. There is not really time for that in this mandate. From the way that the Bill is set up as enabling legislation, do you think that it is enough to have a clause that enables such things to be rolled out by regulations, or do they need to be brought in through the Bill? When you put it like that, it sounds like an awful lot of things to have to do in the remaining time.

Mr French: The Bill does not provide us with an ability to do anything more than what we currently do, essentially. It will allow us just to give advice to the Department. We have done significant horizon scanning about the differences between us, Ofgem and our Irish counterpart, the Commission for Regulation of Utilities (CRU).

Ms McAuley: As John said, we have done some comparisons, and certain aspects of the Utility Regulator are different from Ofgem. From our perspective, if it were the policy direction that we should regulate wider matters, we would need legislation to be passed to enable us to do that. That legislation might mean that primary legislation would not be needed to enable us to expand the role for other parts, but, in the first instance, we would require primary legislation.

Ms Forsythe: For now, we have this Bill. The Chair raised a point about a potential amendment to allow for advice to be given to different Departments, but that is not something to be done by regulation; it needs to come through primary legislation. That is grand. Thank you very much.

The Chairperson (Mr Brett): I have a final question. Shauna, you talked about the Department and the UR. Being "in conflict" might not be the right term, perhaps, but you talked about how they may not share the same view and how the ability to instruct may work. You said that it is difficult to work out how that might play out without a tangible example, so perhaps I can provide a tangible example. The GSS refers to electricity guaranteed standards of service.

Mr Martin: I have quite the learning curve on acronyms. I am sure that I will get cue cards at some point.

The Chairperson (Mr Brett): In July, you issued your report on the GSS, in which you stated that the introduction of such a policy would be counterproductive and would increase the cost of bills for my constituents and, indeed, all constituents across Northern Ireland. The Department for the Economy and the Minister ignored that advice and said that you were incorrect. The Minister's view is that guaranteed standards of service should be in place, and she has instructed officials to do that. That is an example of where the Utility Regulator, as the expert, gave a considered view, but the Minister took a diametrically opposed view. Will you play out the scenario in that instance?

Mr French: The scenario is in play. We have done consumer research, spoken to stakeholders and made our recommendations based on the evidence. The Minister, as is her right, has decided to go further and has proceeded with the GSS for storm payments. We will be interested to see how the process for that is taken forward. Differences of opinion occur from time to time.

The Chairperson (Mr Brett): It may be more than a difference of opinion. They are fundamentally diametrically opposed views. Your report states that it will artificially inflate consumers' bills across Northern Ireland because they will have to pay an increased amount into a system on a monthly or bimonthly basis, depending on how they pay the bill, and a storm may or may not arise over a certain period. People will be paying into a system that they may or may not get their own money back from. Therefore, that is not a difference of opinion. It is a diametrically opposed view. We are in a scenario where the Utility Regulator is advising the Department, which is its statutory responsibility, and the advice has been ignored. What can you do in that scenario? Are you concerned that the legislation will start a process where you cannot reasonably refuse a request from the Department? Will we be in a scenario where the Utility Regulator must implement policy that the Department has legislated for that, in your view and on the record, is counterproductive for consumers? Again, your statutory role is to support consumers.

Mr French: It is, but if the Department brings forward legislation and it is passed, we have to implement it. The GSS issue is down to the timing. The research clearly showed that, first, the network needed to be resilient to storms, and then we could look at GSS payments. The Minister has decided to bring forward GSS payments. There will always be differences in timing, but, essentially, a Utility Regulator must maintain its independence, and that was part of the discussion yesterday with the European regulators. It is important that a regulator is independent and has the ability to give its opinion, because its purpose is to give market stability, which allows people to finance themselves within the market, and the regulator gives a long-term approach, which the political cycle sometimes does not allow. It is just about the differences in timescale.

The Chairperson (Mr Brett): John and Shauna, thank you very much. We appreciate it. I imagine that it will be the last oral evidence session on the Bill, and your evidence is very much appreciated by me and the entire Committee. Thank you for your continued work and dedication on the issue and, of course, the core responsibilities that you already have. Thank you.