Official Report: Minutes of Evidence
Committee for the Economy, meeting on Wednesday, 14 October 2026
Utility Regulator (Support for Decarbonisation Preparation) Bill: Department for Economy
Ms Kellie Sprott (Department for the Economy): Yes. Thank you, Chair and members. We are here today to discuss the Utility Regulator (Support for Decarbonisation Preparation) Bill in the context of two pieces of Committee correspondence and two potential amendments. As today marks the end of my second week in post, in order to make the session as valuable as possible, my colleague Catriona Harkin is here, and she can respond to any technical or policy questions that my knowledge does not quite extend to as yet. Paul Skillen is our primary legislation lead, and he can respond to any detailed questions about the Bill. William Deane is the policy lead for energy consumers and will support on the Competition and Markets Authority (CMA) report and guaranteed standards of service discussions.
As the Committee will be aware, the Bill is a small, single-issue Bill that has been drafted to bring legal clarity and assurance to the Utility Regulator (UR) in advising the Department on the preparation for decarbonisation of the energy sector. It represents a measured legislative step, enabling the Utility Regulator to be a meaningful part of assisting the Department in planning for the next stage of our energy decarbonisation journey. It is for those reasons that the Department does not accept the amendments that have been put forward for discussion by the Committee. Extending the ability of the Utility Regulator to provide advice, information or assistance to any Department would undermine the responsibility, governance and accountability that the Minister for the Economy has for the energy sector and energy policy on behalf of the Executive and the Assembly. The proposal is also unfunded, and it would take the Bill past financial viability.
The Department does not intend to legislate for the Utility Regulator to regulate home heating oil. Regulation requires administration, monitoring, compliance and enforcement, all of which come at a cost. The Competition and Markets Authority evidence shows that competition is strong within that industry and that consumers here not only have more suppliers to choose from when purchasing heating oil but pay less for it than their counterparts in GB and ROI. Our planned response to the CMA heating oil report is a proportionate, considered one, utilising existing, well-established statutory bodies to achieve the maximum benefit for consumers at the least cost. We will seek to enhance existing consumer protection, improve support for vulnerable households and strengthen market transparency through our existing bodies: the Consumer Council and Trading Standards Service (TSS). Given our position on home heating oil, we do not think that the current review of the guaranteed standards of service regulations provides an opportunity for it to act as a legislative vehicle for heating oil protections.
Regarding the guaranteed standards of service more generally, the Economy Minister, in her statement to the Assembly in July, set a clear policy direction that customers should receive payments when they are left without electricity for a time as a result of severe weather events. We are working to develop the policy options for that and will have those ready for ministerial consideration before the end of the mandate.
That concludes my opening statement. Back to you, Chair.
The Chairperson (Mr Brett): Kellie, thank you. Sorry for my ignorance in not congratulating you on your new post. Congratulations. We are delighted to have you.
Mr Honeyford: You talked about cost and meaningful change, but how do you decarbonise if you do not understand who is using heating oil in the first place?
Ms Sprott: We do understand who is using heating oil. Through the scheme that DFC is running to give vulnerable home heating oil users £100 off their heating bills, assessments have been made of households that are on the gas network. If houses are not on the gas network, they are on the heating oil network. We can also use HMRC data and the like to make that assessment. We would, however, have to look into that, yes.
Mr Honeyford: So, you do not have a list of who is using heating oil.
Ms Sprott: We do not hold a full list of every home.
Ms Sprott: We do not hold that.
Mr Honeyford: So, how do you decarbonise if you do not have a clue who is using oil in the first place?
Ms Sprott: Decarbonisation is part of the energy strategy. We will decarbonise by reducing the use of fossil fuels and increasing our use of renewable energy. That is what we will do, and we will reach out to all households, whether they are using heating oil or gas, to encourage the transition to renewable, clean, affordable and secure energy. We do not need a list of all the households using oil to do that, because we will target all households that carry fossil fuels, which is 97% or 98% of all households.
Mr Honeyford: When the regulation was being drafted and when this was being done —
Mr Honeyford: Yes.
— did the Department engage with the Utility Regulator?
Ms Sprott: There was extensive engagement on the Bill at all times with the Utility Regulator.
Mr Honeyford: Was home heating oil mentioned during those discussions?
Ms Sprott: I will pass over to my colleague.
Mr Paul Skillen (Department for the Economy): No. The discussions that we had with the Utility Regulator were in and around a gap that it identified in supporting us in our climate change obligations. That was in and around electricity, gas and the emergence of new technologies in that area, such as air separation units (ASUs) and demand side units (DSUs), and bringing in hydrogen. It was about that kind of technical gap, the movement from fossil fuels and the operational change to net zero technologies. It identified that gap in its statutory duties, and that is what the Bill was used to address.
Mr Honeyford: When Utility Regulator officials were in front of us, they said that Ofgem had a list of things that they would love to have. Why did the Department not use the Bill to protect homeowners who use oil today and give the Utility Regulator the protections that the CMA is looking for?
Ms Sprott: We do not need to. Legislation is already in place. There are extensive consumer protections through the Consumer Council for NI. Also, the Trading Standards Service can carry out enforcement in respect of malpractice in business operations. A direct comparison cannot be made between Ofgem and the Utility Regulator: they are not the same, and there is no GB equivalent of the Consumer Council. Ofgem has more extensive responsibilities than the Utility Regulator, which has a single purpose here as an economic or price regulator of gas and electricity markets. Ofgem has powers to protect consumers, as our Consumer Council does, and it delivers schemes on behalf of the UK Government. The Utility Regulator does not do that here, so the two are not comparable.
Mr Honeyford: What power does the Consumer Council have to do anything? Say, for example, that I order oil today, but the order is cancelled and the price goes up tomorrow. Where could I go, and what could the Consumer Council do?
Ms Sprott: Your first port of call would be to go to the Consumer Council to raise your concern/complaint. It would look into that, and, if it thought that there was any form of malpractice or bad business, it would refer the matter to the Trading Standards Service, which has enforcement capability, so it could look at it.
Mr Honeyford: That is the point. The Consumer Council does not have any enforcement powers whatsoever. It is an advisory —.
Ms Sprott: Enforcement? No, that is what the Trading Standards Service does.
Ms Catriona Harkin (Department for the Economy): As part of what we are discussing, I do not think that we are saying — Kellie can keep me right — that all the powers that the CMA recommends currently sit with the Consumer Council. We are saying that that is the mechanism through which we would look to implement the recommendations that the CMA has brought forward to strengthen —.
Mr Honeyford: That is the bit that I do not understand. I do not understand why an advocacy body would be the one to do that, given that it is the Utility Regulator that says that it would love those powers.
Ms Sprott: The Utility Regulator is an economic price regulator. There is no recommendation in the CMA report on price regulation.
Ms Sprott: Neither do the UK Government —.
Ms Sprott: The regulation is all about increased and enhanced consumer protections. The Consumer Council for Northern Ireland is the well-established, statutory body through which to do that. That is why that is the Department's position.
The Chairperson (Mr Brett): OK, David. In fairness, the departmental witnesses have stated their position. Do you have any questions about the amendments that the Committee discussed last week or the Bill?
Mr Nesbitt: Good morning. You are rejecting our recommendation to broaden the scope of the Utility Regulator for two reasons. I will start with the second one. You said that doing so is not financially viable. What would it cost?
Ms Sprott: We do not have any idea of the actual cost —.
Mr Nesbitt: How on earth do you know that it is not financially viable if you do not know the cost?
Ms Sprott: From working closely with the Utility Regulator, we know that it estimates that, in the first year of implementation alone, it would need four additional full-time staff at a cost of £328,000 to do what is in the Bill as drafted, which is to provide advice to DFE. That is in the regulatory impact assessment that was produced. If that was to be open to all other Departments —. Sorry, I should say that, because it would provide that advice to DFE, which is directly responsible for energy policy, that could be funded through the gas and electricity licence holders. There is a very strict legal bind on how the Utility Regulator can be funded. Were the scope to be extended to all other Departments, we have no idea of the numbers or the complexity. Most likely, it could not be funded, because we do not see how their requests would be strictly related to gas or electricity, so it would have to be funded from the public purse. Discussions with DOF and possibly the Executive would have to take place.
Mr Nesbitt: I was Minister of Health for 27 months, and I do not recall ever being briefed about decarbonisation.
Your primary reason for rejecting the recommendation is that it would undermine the Minister. Are you saying that it clashes with section 29(1)(a)(ii) of the Northern Ireland Act 1998, which, for clarity, gives the Committee a statutory duty:
"to advise and assist each Northern Ireland Minister in the formulation of policy with respect to matters within his responsibilities as a Minister"?
Ms Sprott: It absolutely does not, because the Minister does that. We are talking about the Utility Regulator being able to contact Departments directly, not the Minister. She already does that. She works collaboratively with other Ministers on the energy strategy, and that would continue.
Mr Nesbitt: We are advising and assisting the Minister by saying that you should allow the Utility Regulator to carry out that function.
Ms Sprott: That would go right to the heart of the Minister's governance of and accountability for the energy strategy and energy policy, including to the rest of the Executive and the Assembly. DFE is quite prepared to act as a broker in that regard, but the request should come through us, and we could do it.
Mr Nesbitt: OK. In my opinion, you are undermining the power of this Committee.
Ms Forsythe: Thank you for coming. I will build on Mike's point. I also sit on the Finance Committee, which brought through legislation to establish the NI Fiscal Council. The best value is for the Fiscal Council not to be prevented from advising anyone. I am looking through the same lens, and, from what Mike has said, I do not understand how the Minister or the Department would think that there was anything wrong with giving a power to allow the Utility Regulator to advise, because it can only add value. I cannot understand how you can say that giving the Utility Regulator that power would undermine the Minister. Nobody is saying that power should be taken away from the Minister; it can be done in partnership with the Minister. The Minister can work hand in hand with the Utility Regulator. We have an expert/professional body, and we have just heard from a previous Minister that he was not briefed on those issues. It is serious that we have an opportunity to provide extra advice and information. I want to challenge you on that again: how is giving a professional body, which is an expert in the field, the power to advise other Departments undermining a Minister? We are not asking the UR to go behind the Minister's back; it would be with the Minister, and that is where the Committee is coming from. The Committee thinks that giving the power to advise others directly would be advantageous across the Executive.
Ms Sprott: Obviously, you know our arguments, and I will not rehearse them, but I will go to the last thing that you said. You used the words "with the Minister", and then you said "directly" advise other Departments. The only viable, realistic outcome for us re the proposed amendment would be if the Utility Regulator worked through DFE, as the lead for the energy sector and policy, to assist other Departments that have approached us to say that they need that expertise in the decarbonisation of the energy sector.
Ms Forsythe: You are not completely opposed to the idea of the Utility Regulator advising other Departments. Are you saying that you want it to done more closely with the Economy Minister?
Ms Sprott: It would have to come through DFE to be viable for us. Obviously, we are only in discussions at this stage. The letter was quite open, and it said "all Departments" and possibly arm's-length bodies (ALBs). The reach seemed quite broad to us, and that is another reason for our response.
Ms Forsythe: It is good to tease that out. I found it quite alarming when you said that our amendment would undermine the Minister, because that is certainly not where the Committee is coming from.
The second point is about the financial viability of the cost. It is quite concerning that it was declared to be not financially viable when it has not been costed out, either as a full estimate or as an appraisal against the value that it would add. It is not just about the cost of the staff but the value that would be added. There is a return on the investment in the form of the value added to the public sector. The cost of providing the extra things would add social and economic value, and the general information that we need to provide about decarbonisation needs to be fully appraised. Will the Department consider that? To say that the cost is not viable without any more information is a bit disappointing.
Ms Sprott: It would make the Bill financially unviable because of the strict legal restrictions on the Utility Regulator's ability to fund itself through gas and electricity licence holders. Unless the information, advice or assistance that the Utility Regulator is providing is strictly, by law, linked to electricity and gas, it cannot be funded from those sources. Any other assistance or advice would have to be funded from the public purse.
Mr Skillen: It is also important to remember that, as John has said, the Utility Regulator is constrained by statute. The technical expertise that it can provide will not be on broad decarbonisation. The Utility Regulator has to be constrained to its functions in and around electricity regulation, markets and gas. The Utility Regulator could not give broad decarbonisation advice: it has to act within its legal constraints.
The Chairperson (Mr Brett): Give us an example of a request that, as a result of the proposed amendment, the UR could not respond to or would be in breach of his vires.
Mr Skillen: It is very hard for us —.
The Chairperson (Mr Brett): You are telling us that we should not table the amendment because, first, it is unfunded, given that you do not know what the requests may be, and, secondly, because it might be outside the UR's vires. Therefore, I am asking you to give us an example of what that may be, if we are not to progress with the amendment.
Ms Sprott: Any kind of general decarbonisation advice that is not strictly linked to the gas and electricity network. Anything, yes.
The Chairperson (Mr Brett): How many of those requests has the Minister for the Economy received to date from another Minister that could not have gone straight to the Utility Regulator under this amendment?
Ms Sprott: I have no idea.
Ms Sprott: I do not know.
Ms Forsythe: No. I appreciate the chance to question you on it. The Committee has worked hard on this, and we see these as important issues. I hope that you appreciate that. We have put a lot of thought into this and feel quite strongly about the amendments. We hope that you will reconsider them.
The Chairperson (Mr Brett): Would you be content — I am not sure of the exact wording that was sent to you last week — if the wording was that the UR could advise the Executive?
Ms Sprott: We would need to take advice, but we can certainly take that away.
The Chairperson (Mr Brett): OK. Your view was that there could be an undermining of the fact that the Minister for the Economy leads on energy policy, which is right, and should have direct engagement with the Utility Regulator. What happens, though, when the Utility Regulator and the Minister disagree?
Ms Sprott: It depends on the issue.
The Chairperson (Mr Brett): I will give you an issue. Let us look at the guaranteed standards scheme (GSS). The independent expert in the Utility Regulator said that the Minister should not proceed with GSS legislation, and the Minister ignored that advice. Is that correct?
Ms Sprott: No, we do not share that view. The Utility Regulator did not say, "No"; it said, "Not now".
The Chairperson (Mr Brett): OK, so, when the Utility Regulator stated in its report that, at this stage, the legislation for GSS would undermine the work to reinforce the current network and that that is where the priority should be, the Minister did not agree with that.
Ms Sprott: That is running in parallel with what we are doing. Do you want me to give a little bit of background on the GSS now?
The Chairperson (Mr Brett): You can, but the view of the Utility Regulator is that the Minister did not follow its advice. That was put on the record at the Committee four weeks ago.
Ms Sprott: We do not share that view.
The Chairperson (Mr Brett): OK, so there is a clash of views between you and the Utility Regulator. You have just given me that response to my example. You and the Utility Regulator disagree, which happens in a democratic society all the time. My concern is that, if there is an Executive-endorsed and backed energy strategy, the only people who can receive the advice or filter through the advice are those in the Department for the Economy. The Department for the Economy, as you have just attested to, on occasion, disagrees with the advice from the Utility Regulator. How, then, can we be in a position where the Executive cannot receive independent advice and take their own decision rather than the view that the Department takes on advice given by the Utility Regulator?
Ms Sprott: I can only repeat my point that, for us, the only viable option when it comes to that amendment is that, when that advice is sought, it is funnelled through DFE.
Ms Sprott: I do not know of any, but I can pass to others, if they are aware of any.
Ms Sprott: Not that I am aware of. I can take that away, if you want.
The Chairperson (Mr Brett): Yes. It is just that, if you are saying that it is financially unviable and that you would be inundated with requests, you would think that, by now, you would have received those requests via the Department. However, to date, you are not aware of any.
Ms Sprott: I am not, but I would need to check that out.
The Chairperson (Mr Brett): I agree with you on the regulation of oil. I do not think that the Bill is the vehicle to do that, but I am keen to develop some of David's points. Trading Standards Service has a unique role here in Northern Ireland. Are you aware of how many fines for breach of contract, in the past year, Trading Standards Service has issued to companies here in Northern Ireland that supply oil?
Ms Sprott: No, I would have to take that away.
Mr Delargy: Thanks for your presentation. It is useful to reflection on some of those points and the detail that you have given.
What we have done as a Committee has been well-intentioned in trying to find a way to strengthen the Bill and look at the issues that we hear about from constituents. However, we also need to be alive to the restrictions, difficulties and technical issues that you have mentioned. What you outlined at the start is imperative. The Bill is very specific and has a specific focus, and we do not want to undermine that.
You mentioned the role of the Consumer Council in particular. Will you elaborate a bit more on how you would see its powers being enhanced? I hear from other members that the Consumer Council may not have the powers at the minute, so I and, I think, others want to understand how that can be strengthened and how the Committee can have confidence in the Consumer Council. We know that it does excellent work, but how can we strengthen that to ensure that what the Committee wants is married to what the Department wants, given the restrictions that you face at the minute?
Ms Sprott: Are you referring specifically to the recommendations in the CMA report?
Ms Sprott: OK. The Minister is meeting the CMA tomorrow to discuss the Department's position on the outworkings and evaluation of the CMA report. She will make a ministerial statement soon after that, so I am not at liberty to go into the full detail of everything that is planned. Everyone will be made aware of that soon. I can reiterate what was said at the start, which is that enhanced consumer protection is very much the Minister's focus. Maximum benefit and value for money at the least cost to the consumer is the Department's absolute focus in responding to the report.
Mr Delargy: You talked about the Trading Standards piece in response to the Chair, but will you go into a wee bit more detail on that and the interaction that you see when it comes to the Bill?
Ms Sprott: The Consumer Council and Trading Standards are two non-departmental public bodies (NDPBs) of DFE and work closely together already. The Consumer Council kicks in as the first point of contact for consumers if they have any issues or concerns. Once the Consumer Council has investigated an issue and exhausted the help that it can give, any issues of malpractice are transferred, and that is where Trading Standards steps in. It has enforcement powers to take action against firms or companies that act outwith the law.
Mr Delargy: From a Committee position, that is really useful. I agree with what you have said so far about how we enhance the Bill, make it stronger and make the connection clearer. So that the Committee is clear, how do you intend to strengthen that relationship? At the minute, there is a bit of a gap in the Consumer Council's powers compared with where it needs to be in order to initiate a lot of this. Will you go into a bit more detail? I appreciate that a ministerial statement is coming, but having more detail would give the Committee confidence.
Ms Sprott: I can give you a little bit, but obviously I cannot give all the detail. The Department wants to react to the report quickly. We want to utilise well-established, well-respected organisations that are in operation, and we want to use their powers to the full immediately. However, we will explore that and work with the Consumer Council and Trading Standards as we would do as part of any reaction or policy journey. If we feel that there is a need for future legislation or anything like that, of course, as a Department, we will investigate and look into that.
Mr Delargy: You also mentioned the difference between Ofgem and the bodies that we have here. That is crucial. We are talking about the regulatory space, but one thing that I am focused on is consumer awareness and consumer access through the Consumer Council. How people know about that could be a strength. The Consumerline service that DFE has worked on has been really useful for the awareness piece. There needs to be a broader awareness of it as well. We are getting into the technical detail of it and some of the technical limitations. I am grateful that you have brought those to the awareness of the Committee. The important piece is the outworking of that and how we move it forward so that people are aware of it and how they can access it. For me, that is the fundamental piece on it.
Ms Sprott: You raise a really good point, because the CMA report is clear about how things are different in Northern Ireland. We have a different operational framework and structure here, and, in many ways, it shows that we are further ahead with regard to consumer protections transparency. The daily checker has been set up as an exemplar for the rest of the UK to follow. It was good to see that reflected in the report, and we want to build on that, of course.
Mr Martin: Thanks, folks, for coming along. I am pretty new to the Committee, so I am still getting my head around fairly complex energy policy.
Do you accept that there is greater exposure to domestic oil prices for Northern Ireland consumers than for consumers in GB, for example?
Ms Harkin: There is. The simple fact is that, as a proportion of the population, more households here depend on heating oil than in GB.
Mr Martin: My understanding is that, in GB, it is about 3·5% and, in Northern Ireland, it is about 63%.
Mr Martin: I do not want to do percentages on those figures, but it is, essentially, absolutely enormous. Therefore, the issue is considerably more focused, if we put it in those terms, to Northern Ireland consumers than it might be to consumers in GB. Is that fair enough?
Mr Martin: I want to explore my colleague's point about the Bill and whether the Utility Regulator gets additional powers. Have you done any scoping work on that? I note what you said about costs — I understand the argument because I was here for the Utility Regulator's evidence. Essentially, you are saying, if I am correct with this argument, that you will not have the money because the way that legislation is currently drafted means that the Utility Regulator can only get licence funding from two markets in particular. Is that right?
Mr Martin: The problem then is: where do you get the additional money?
Mr Martin: OK. If the amendment that the Committee has talked about becomes part of the Bill, essentially, your argument is that the Utility Regulator will not be able to pull that money in and where do we get it from. So far so good?
Mr Martin: OK. You mentioned that four staff have been identified so far as a direct need. Is that right?
Ms Sprott: Paul was part of that process. Yes.
Mr Skillen: We work closely with the regulator, and, in the regulatory impact assessment done in those areas that we identified, we came to the conclusion that that would probably allow them to do the additional work that we identified. We had scoped with them what that requirement would be.
Mr Martin: Fair enough. You talk about costs of £300,000 or something like that. Have there been any scoping studies? My reason for asking and trying to tie those two points together is that we have already established that the sheer number of consumers in Northern Ireland is massive compared with GB. The CMA has done quite a detailed report on that. It strikes me as a fairly obvious point that, given that the market exposure in Northern Ireland is so great, that would be fairly mission-critical work. Has any work been done on a cost-benefit analysis (CBA) or return on investment (ROI) on the costs of doing it versus the benefits to consumers in Northern Ireland were it part of the Bill?
Ms Sprott: Are you asking about regulating home heating oil?
Ms Sprott: OK. I would like to go back because I perhaps misunderstood your question about greater exposure. I emphasise that, for the very reason that there are more people using home heating oil in Northern Ireland, we have increased competition and costs are lower. When you said "exposure", I may have misinterpreted the word.
Ms Sprott: They are not exposed to higher costs or anything like that. In fact, it is the lowest across GB and ROI. That was why I hesitated for a second.
Back to the second point: has the Department done any cost-benefit analysis of actually regulating the home heating oil sector? We have not carried out an analysis of that sector because we do not intend to regulate it. However, through working with the Utility Regulator, we know that regulation comes at a cost. That is always at the forefront of our minds. It requires administration, monitoring, compliance and enforcement. The Utility Regulator's public accounts from 2021 to now show that its expenditure has increased from £10 million to £21 million, and that is without a significant increase in its regulatory function. That is something that the Department would always have to bear in mind were we to consider increasing that role.
Mr Martin: I accept that point. My point was that lots of people use home heating oil more than gas or electricity, according to my figures. I would have thought that that would be a really important thing to do, because of the sheer numbers of consumers. I accept the arguments around price, and that seems to tally with the research that I have done on this issue. I probably do not know enough to have a really clear view of where I fall on this matter. I will just make the point that I am a little shocked that scoping work has not been done on something that is as mission-critical as this, in terms of the sheer volume of consumers that would be affected. I understand that there is a cost to everything, but my question about an ROI or a CBA is this: yes, there will be a cost, but what will the level of benefit be? That informs whether or not a policy action will be taken forward.
Ms Sprott: Be under no illusion: the Minister is laser-focused on this. What we are saying is that we do not intend to price regulate home heating oil, and neither does the CMA recommend that.
Ms Sprott: The UK Government are not doing that either. The Minister is laser-focused on how we can increase protection for consumers and how we can do that quickly and at least cost.
Mr Martin: That is fine. Let us stay on the laser focus. The Minister made a statement in March 2026 on the CMA and a proposed home heating oil regime. This is an honest question: has she published any framework to protect domestic oil consumers since then?
Mr William Deane (Department for the Economy): No, I do not believe so.
Mr Martin: In terms of that laser focus since March, and the fact that we know that it is a really important issue for folk in Northern Ireland, will you confirm that the Minister has not yet published anything on a framework to protect Northern Ireland's heating oil consumers? I know that she has done some bits and pieces, but has she put anything in place since March to specifically address the issue of domestic heating oil?
Ms Sprott: I will take that away. Do you know?
Ms Harkin: Over the past few months, we and the UK Government have been working through the recommendations with the CMA. The UK Government published their response to the recommendations yesterday. Our Minister will make her response tomorrow in a ministerial statement, which will, hopefully, provide the framework for the next actions that we are going to take.
It was quite interesting to look at the UK Government's response to the CMA report. The CMA's recommendation 1 is to do with regulation. The UK Government have agreed in principle and said:
"We will spend time getting this right".
They are conscious of regulation coming with cost and what that looks like for Ofgem. I am hopeful that it will not take us as much time, because many of the CMA report's recommendations are to do with consumer protection, and we have the Consumer Council to build on that. The Minister will make a statement tomorrow, which will be on the same timeline as the other devolved Governments and the UK Government for the CMA's recommendations.
Mr Martin: OK, I understand that. I will finish here. The Minister made a statement in March. I made a point earlier about exposure, and I more or less quoted her words. She recognised that there was high exposure, she was cautious about regulation and she was concerned. It is not unusual for Ministers to call for additional UK Government support. However, when it comes to the Minister's being "laser-focused", which was the term that you used, Kellie, I have not found in my research anything that she has done since then, in accepting a more comprehensive regulatory framework or in doing anything else, on home heating oil. That is probably more of a statement than a question.
The Chairperson (Mr Brett): I will follow up on that, Kellie. I know that the matter is a stated priority for the Minister, but, given that the focus of the past few months has been the work on the CMA report, why was the decision taken to make a written ministerial statement tomorrow rather than have the Minister come to the Assembly on Monday or Tuesday to articulate all the work that she has done in the past months so that Members can ask questions on behalf of their constituents?
Ms Sprott: The Minister can decide whether she will do that on Monday.
Ms Sprott: It is for the Minister and her private office to decide when that is released. As far as I know, she wants to make a statement as soon as possible after meeting the CMA tomorrow.
Mr Kearney: How would you describe the relationship between the Department and the Utility Regulator?
Ms Sprott: It is a working relationship. You were not here for my opening statement, so I will say that I am new to the role and the directorate — that is why my colleagues are here — so I might not know the detail, but it is a functioning working relationship.
Ms Harkin: It is cordial, supportive and engaged. There will always be a slight degree of tension between policy and regulation, especially in a place as small as the North and when we are all working at pace towards similar ambitions. There will always be tension — not a huge degree but a wee bit — about where things sit, because there are things in the margins that could fall between the two, raising the question of whether something involves a policy decision or a regulatory decision.
From my experience of working with the Utility Regulator, I find that, because it is more focused on electricity and gas specifically, while the Department's energy group has a significantly wider remit with a similar staffing profile, there is more time for the Utility Regulator to develop expertise, so we go to it when we need that technical expertise. I am not aware of any issues.
Mr Kearney: — when it comes to achieving synergy between policy and regulation?
Ms Harkin: We are. The Utility Regulator makes it clear that it is independent, and rightly so, because regulation should be independent of policy. We are collegial to an extent because of the question of how much the Department should influence regulation and regulatory decision — where is the boundary? — and, equally, at some point, we will make policy decisions that do not fit perfectly with the Utility Regulator's forward work plan or business plan. It is helpful that we are all working towards the same ambition. Everybody in the group and at the Utility Regulator is working as hard as possible to save our consumers money because we understand that people are struggling.
Mr Kearney: I will come to that in a wee minute. Do you think that the Department has got the balance right? Does the Utility Regulator have the balance right?
Ms Sprott: It is ongoing.
Ms Harkin: All I can say, Declan, is that we have got it as right as we can. When the Utility Regulator looks around the system, it tends to see Ofgem and say, "Ofgem can do lots of things and has lots of powers that we do not have" —
Ms Harkin: — whereas we look towards the South, where the Department of Climate, Energy and the Environment (DCEE) has many more staff than we do because the population that it serves is three times the size of ours, yet the Commission for Regulation of Utilities (CRU) in the South has the same number of staff as the Utility Regulator.
It can be challenging — I will not say challenging, but there can just be robust discussion at times, which is OK.
Mr Kearney: Of course: that is the way that issues get dealt with. How does the Department deal with a scenario in which there is, perhaps, over-exuberance or over-reach on the part of the Utility Regulator? How do bodies such as the Utility Regulator deal with potential rigidity in departmental operations?
Ms Harkin: Declan, I do not know if it is necessarily over-reach. Oftentimes, it is matters of interpretation that we are dealing with. I do not think that anybody in the Department or the Utility Regulator is moving to step into —. We have regular senior team meetings with our Utility Regulator colleagues. The Minister has regular meetings with the chair of the Utility Regulator. Typically, we try to talk it out and come to a reasonable position. The Utility Regulator is an independent economic regulator and a non-ministerial department. It is not an arm's-length body. It does not have an equivalent. It never gets to the point of being Minister to Minister, because the Utility Regulator does not have a Minister. However, so far, we have managed to find common ground, because we are, as I said, all working to achieve the same ambition.
Mr Kearney: OK. I invite your observations on the interactions between the Utility Regulator and the Consumer Council on how they mutually see the delineation of the Utility Regulator's powers and the Consumer Council's responsibilities.
Ms Harkin: You brought me along for my technical knowledge, Kellie, and I am going to let us down. It is either the Energy Act 2023 or the Electricity (Northern Ireland) Order 1992 — Paul, you might know — under which the Utility Regulator has responsibility for consumer protection. The Department has responsibility for consumer protection, and, therefore, the Consumer Council NI has responsibility for consumer protection. We are all required, in law, to protect consumers here. We see the Utility Regulator as the economic regulator, and we see the Consumer Council as the body that consumers can contact. If there is a tension there, we will talk between ourselves and sort it out, but there is overlap and consistency in legislation, so it can be a bit of a challenge.
Ms Sprott: The Utility Regulator has a slightly narrower focus on consumer protection. The focus of the Consumer Council and the Department is much broader.
Mr Kearney: Thanks for being so candid. May I finish with an observation, Phillip, please?
Mr Kearney: Regardless of what is going on within the weeds here, it is paramount — if I may go back to David's point and Phillip's comment earlier — that we secure protections for oil consumers in the North. That is an imperative for all the reasons that are staring us in the face. The cost-of-living crisis does not appear to be going away. There is geopolitical instability and all the problems that that is creating in pressures on prices. Regulation is key. It is not acceptable that the fat cats continue to make a profit on the back of workers and families here who are under far too much pressure, or on the back of wars that are leading directly to those pressures.
Ms McLaughlin: Thanks for all the answers so far. The Committee has done significant probing in all the areas in which we want answers. I am still of the view that the advisory role, as set out in the Bill, should not be restricted to engagement with just one Department, and I have not heard anything in the Committee session this morning that persuades me otherwise. It is obvious that it is a cross-cutting issue and that all Departments would benefit from receiving advice from the Utility Regulator. I just want to put that on the record.
Mr Honeyford: I want to pick up on two points. Nobody ever suggested that the price of heating oil should be regulated. That was never mentioned. It was not mentioned by the CMA, but you have mentioned it several times. You have also talked about how heating oil is cheaper in Northern Ireland than in the rest of the UK, but that is the wrong comparison. Are you suggesting that home heating oil across Northern Ireland is cheaper than in the rest of the UK?
Ms Sprott: No, I am merely reflecting the findings of the CMA report. That is the evidence that we have at hand. It shows that, because of the increased competition here, consumers here pay less than their counterparts —.
Ms Sprott: Yes, for home heating oil.
Ms Sprott: I was not making that point, if that is what you are asking.
Mr Honeyford: The CMA also suggests that the powers should go to the Utility Regulator. Why are you not listening to the CMA?
Ms Sprott: We have been in contact with the CMA at a working level since the publication of the report, and the Minister will be meeting the CMA tomorrow to provide it with the Department's position and full deliberations.
Mr Honeyford: You have given your position before that meeting happens. Your position is that you are not taking the CMA's recommendations.
Ms Sprott: We will be talking to the CMA about that tomorrow, but, as you know from our response on the proposed amendment to the Bill, the Department does not plan to use the Utility Regulator to regulate home heating oil.
Mr Honeyford: You are not taking the CMA's recommendations.
You talk about costs and four staff being needed. I do not get that at all. You are saying that four staff will be needed and that, if another Department wanted UR advice, you would need more people than that, so —
Ms Sprott: It is the Utility Regulator that is saying that that is the number of people that it would need.
Mr Honeyford: Yes, but you are saying that those four staff could not do the job of supplying the information to the Department of Health, which Mike mentioned, and that you would need more.
Mr Skillen: No. You would need to do an assessment of those Departments' requirements.
Mr Honeyford: OK. Here is a very simple assessment: how many people work in the Department to produce the policy for biomethane, for example?
Mr Honeyford: Can we check that? Can we also check how many people in the Department work on offshore wind policy?
Mr Skillen: About four or five people work on offshore wind.
Ms Sprott: We can check for accuracy, but we think that there are about four or five.
Mr Honeyford: We hear that it is far fewer than that. What I am suggesting is that there would be no additional cost whatsoever if it were four people and they were to provide information to any other Department.
Mr Skillen: The advice that those people could provide and the associated funding mechanism is tied into the licensing conditions. Electricity and gas —.
Mr Skillen: If the advice is outside that — which it is likely to be for other Departments, because it is likely that the advice will not be tied into the licensing conditions — that would have to be funded from public finance.
Mr Skillen: Those four staff would be funded by licensing conditions, because it ties into the licensing requirements. Advice outside that would be unlawful.
The Chairperson (Mr Brett): I will move on to Peter. You have stated your position, and we have stated ours. Peter, go ahead quickly, because we need to —.
Mr Martin: On pricing, you are right that Northern Ireland has the lowest figure compared with England, Wales and Scotland. My point is that, as a proportion, the quantum of affected consumers here is so much greater than the rest of the UK. People here are affected more, and they have seen the highest price rises in the past six months.
I will tie my comments in with what the Chair mentioned. Given the fact that we have seen the highest price rises, and given the sheer quantum of consumers who use home heating oil — this is not a criticism of the officials whom we have in front of us — I am astounded that the Minister might consider issuing a written statement tomorrow, rather than come to the Assembly. I think that Committee members would have a lot of questions about the discrete actions that the Minister has taken since she most recently talked about the issue in any detail, which was in March. In my view, to slip out a written statement rather than coming to the Assembly for scrutiny —
Ms Sprott: Could I just, for the record —
Ms Sprott: It might be —.
The Chairperson (Mr Brett): Sorry, I am speaking. We are here to discuss the Bill. Those are important points, but they are not relevant to the Bill. We are going to move to our informal deliberations on the Bill.
Clause 1(1) states:
"The Utility Regulator may provide advice, information or assistance"
to support the Department's development of proposals, policies, strategies or plans needed in relation to the energy sector to meet requirements under the Climate Change Act (Northern Ireland) 2022. In its response, the Utility Regulator indicated its support for clause 1(1), but argued that the Bill might be amended to provide for similar, clearly defined powers that could apply in a broader government context. The UR stated that such provisions should be accompanied by clarity of scope, alongside appropriate resourcing arrangements.
Several other respondents indicated that the advisory role of the Utility Regulator should not be restricted to engagement with a single Department and should be open to others to support the wider delivery of objectives under the Climate Change Act. The Department indicated that the Bill as drafted would allow the Department to act as a broker to other Departments that may require advice, information or assistance from the regulator regarding energy-related policies, thus an amendment is unnecessary. The Department also argued that, where the UR's work might fall outside the scope of the statutory electricity and gas functions, that could not be funded by licence fees. In that instance, the Utility Regulator would engage with the Department and the Department of Finance to discuss implications for the public purse, in advance of any expenditure's being incurred.
Is there anything further that you want to add, or have you articulated your position?
Ms Sprott: No, that is fine.
The Chairperson (Mr Brett): No problem. Do members have any questions at this stage? No. OK.
Some respondents suggested that the UR's role should be more clearly defined. The Department indicated that it and the UR will agree on a case-by-case basis where advice is needed, and thus a formal amendment is not needed. Departmental colleagues, do you have anything to add?
The Chairperson (Mr Brett): Perfect. Do members have anything to add? No.
Sustainable NI, RenewableNI, SSE and others suggested that the UR's role should not be tied to the Energy Prices Act 2022, and that broader powers were needed to support the energy transition and the development of an energy strategy. The Department argued that that is not required as the UR must already have regard to environmental sustainability, and thus an amendment is not needed. Departmental colleagues, do you have anything to add? No. Members, do you have any questions? No.
SSE, NIE Networks, National Energy Action (NEA) and the Electric Vehicle Association argued that the Bill should highlight the importance of protecting the interests of consumers and tackling fuel poverty. The Department countered that the UR already has a role to play in that regard in respect of consumers, and that amendment might lead to duplication with the role of the Consumer Council. The Consumer Council asked that, to avoid that, amendments not be made to the role of the UR. Departmental colleagues, do you have anything to add? No. OK. Do members have anything to ask? No.
I ask members to confirm that they understand clause 1(1), and that the only suggested amendment is that the reference to giving advice to "the Department for the Economy" would be replaced by a reference to giving advice to "the Northern Ireland Executive". Members, we can discuss that further. I think that the Department had some concern that what we were looking at involved not just Departments but ALBs etc. You are going to take away for consideration the wording "the Northern Ireland Executive".
The Chairperson (Mr Brett): OK. Do members have anything on that? No. OK. Do members wish to wait for what we hear back from the Department, or do they wish to set out a position?
Mr Delargy: I think that it would be useful to wait. We need to get that response. The Committee should really investigate and probe the Consumer Council's position. However, at this stage, we would be doing that without full knowledge, so I propose that we wait until we get that information.
Ms Forsythe: I am happy to wait, but I am also keen to progress this. I still feel strongly about the advisory point, so I do not want it to sound as if it is being diluted in any way. It would be helpful if that information could be expedited. So perhaps we could ask for that.
The Chairperson (Mr Brett): That would allow us to take a position next week, during formal scrutiny. Are members content with that approach?
Members indicated assent.
The Chairperson (Mr Brett): That deals with that.
Clause 1 (2) is described as providing a qualified duty that the UR must, so far as reasonably practicable, comply with any reasonable request for advice. That is to allow for times when the UR may be unable to meet a request from the Department, for example when it considers that it has insufficient resource.
Several respondents indicated that the advisory role of the UR should not be restricted to one Department. The System Operator for Northern Ireland (SONI) and others argued that the Bill should provide greater certainty on the resourcing implications of proposed information provision arrangements, as the ability to support additional information or analysis requests is contingent on appropriate funding arrangements.
Are members agreed with that position and that we move on?
Members indicated assent.
The Chairperson (Mr Brett): Budget Energy and Flogas have asked that the Department provide clarity on how a "reasonable" request from the Department to the UR might be defined. The Department clarified that the Department must be "reasonable" and the Utility Regulator’s compliance must be "reasonably practicable", taking into consideration factors such as staff and resources. Are departmental colleagues happy with that?
Mr Skillen: We have written to the Committee detailing case law in that area.
Ms Sprott: It is due to go. We have prepared it. It will come to the Committee imminently.
Mr Skillen: We wrote in August.
Ms Sprott: Oh, sorry. Excuse me, Paul.
Mr Skillen: We wrote in August, setting out our position.
Ms Sprott: In response to the most recent ones. That is what I was referring to.
The Chairperson (Mr Brett): Perfect. Do members have any questions on that? No.
GNI (UK) — Gas Networks Ireland (UK) — has sought clarity around regulatory independence. The Department clarified that the UR's independence will be unchanged. The Department is content with that, and we are content with that.
GNI (UK) and Phoenix Energy raised the issue of costs, arguing that licensees should not bear the cost of the enhanced role of the UR. The Department clarified that the costs may be around £328,000 in the first year, which equates to around 26p per electricity or gas connection per year. Is the Department content with those figures still? Yes. Are members content?
Members indicated assent.
The Chairperson (Mr Brett): OK. Do members have any questions? If not, will members confirm that they understand clause 1(2) and that no amendments have been suggested, further to those that have already been informally agreed? Are members content?
Members indicated assent.
The Chairperson (Mr Brett): Perfect. Let us now deal with clause 1(3). This subsection is described as defining several of the expressions used in clause 1(1) and clause 1(2). Sustainable NI suggested an amendment to include a non-exhaustive but illustrative list to pre-empt disputes about whether emerging technologies fall within scope of the UR's role. The Department previously clarified that it would agree that with the UR on a case-by-case basis. The officials are still content with that, and we are content with that. Will members confirm that no further amendments have been suggested and that they are content?
Members indicated assent.
The Chairperson (Mr Brett): OK, perfect.
Clause 2 provides for the Act to come into operation on the day after it receives Royal Assent. The UR has stated that it supports commencement of the Bill, so that there is clear statutory authority for the UR to support DFE. However, it has indicated that it wants necessary operational and funding arrangements to be in place ahead of commencement. Will the officials have that discussion with the UR?
Mr Skillen: Yes. Ongoing discussions.
Mr Skillen: I am just thinking that, if you widen it to other Departments, further discussion would have to take place —
Mr Skillen: — involving the Department of Finance.
The Chairperson (Mr Brett): But you are confident that, if the commencement period goes through as it is in the Bill as drafted, you have everything —.
The Chairperson (Mr Brett): OK. That is all we can ask for at this stage.
Will members indicate that they are content, informally, with clause 2?
Members indicated assent.
The Chairperson (Mr Brett): Assembly Legal Services have advised that the Bill deals with relations between two public bodies; that it does not affect persons with rights that are protected under the European Convention on Human Rights; and that it is not considered that any clause of the Bill falls within scope of article 2(1) of the Windsor framework. That is fine.
We will now deal with other matters. Members referred to fuel poverty issues and recent substantial and unregulated changes in home heating oil pricing. It was suggested that amendments should be explored to include the regulation of home heating oil through the Utility Regulator's revised vires. The Committee has sought clarity from the Department on the regulation of the home heating oil market in that regard, and on whether the development of GSS would provide a legislative vehicle for the extension in respect of home heating oil. You have set out that you do not believe that that is necessary. Do members have any questions on this? If not, are members content to accept, informally, the Department's related explanation and content to take no further action?
The Committee Clerk: Chair, to be clear, what we would be seeing informally at this stage is that the Committee will not pursue an amendment around price regulation of home heating oil. Is that what members are saying, Chairperson?
The Chairperson (Mr Brett): From the discussion last week — I do not want to put words in members' mouths — I think that the Committee is keen that the Department does work on that, but reluctantly accepts that this Bill is not the vehicle to be able to do that. That should be included in the report. I do not want to misquote Committee colleagues, so I am happy to open it up. Are members content with that?
Members indicated assent.
The Chairperson (Mr Brett): On the decarbonisation duty, some respondents argued that the Bill should redefine the UR's remit, particularly in respect of consumer interest, which, rather than focusing on cost minimisation, should include longer-term decarbonisation. Sustainable NI, therefore, suggested either amending the Energy Order 2003 or creating a new free-standing duty in the Bill. The Department says that that is not necessary. Members do not have any questions on that. Is the Committee content to accept the Department's related explanation and take no further action?
Members indicated assent.
The Chairperson (Mr Brett): On accountability, Sustainable NI argued that the Bill creates new functions but no accountability mechanism. It was suggested that the introduction of a reporting duty creates a feedback loop with the Assembly and civil society. I will bring in officials, but I assume that your position is that that is an independent body and is not accountable to the Department.
Ms Harkin: It lays its accounts, through DOF, to the Assembly annually. The Utility Regulator considers itself to be accountable to the Assembly as a whole.
The Chairperson (Mr Brett): Do members have any questions on that? If not, are we content to accept the Department's related explanation and take no further action?
Members indicated assent.
The Chairperson (Mr Brett): On consultation, Sustainable NI proposed a duty to consult stakeholders. Departmental colleagues, do you want to say anything on that? No. OK. Is the Committee content that we take no further action?
Members indicated assent.
The Chairperson (Mr Brett): Sustainable NI argued that an amendment was required to allow the regulator to provide anticipatory network investment to host renewables. Departmental colleagues, is there anything that you want to say? No. Is there anything that members want to state? No. Are members content, then, that we take no further action?
Members indicated assent.
The Chairperson (Mr Brett): Amendments to emphasise the importance of just transition were suggested. Departmental colleagues, is there anything that you want to add? No. Members, is there anything that you want to add? No. Is the Committee content to accept the Department's position and take no further action?
Members indicated assent.
The Chairperson (Mr Brett): Members will recall that GNI (UK) suggested that the Bill should make the UR the regulator for hydrogen. The Department argues that amendments to the Bill on hydrogen or, indeed, heat networks would be out of scope. That is still your position. Do members have anything to add? If not, is the Committee content to accept the Department's view and take no further action?
Members indicated assent.
The Chairperson (Mr Brett): Members will recall that Mutual Energy suggested that the Bill include a formal sunset clause. The Department argues that the Bill will likely be superseded by future legislation and, thus, an amendment is not needed. That is still your position. Members have no questions. Are members content to agree that as drafted?
Members indicated assent.
The Chairperson (Mr Brett): Phoenix Energy suggested that the definition of "gas" in the Bill be amended, likely to allow for greater use of biomethane and the transportation of hydrogen. The Department argues that such amendments would be out of scope. That is still your position. Members have no questions. Are members required to informally support that as drafted?
Members indicated assent.
The Chairperson (Mr Brett): The Committee is content. We will have a further discussion with Aoibheann Baker from the Bill Office after this session if necessary. That brings our deliberations with officials to an end. Thank you, departmental colleagues. It is much appreciated.
Ms Harkin: Chair, may I say one thing?
Ms Harkin: David, you asked about staffing for the biomethane team. May I come back on that? I am looking and seeing information for the gas team. I do not actually know —.
Mr Honeyford: Yes. My point is that cost is not the issue. I cannot work out why you do not want this to happen. That is the bit that I cannot understand.