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Power NI profits fall by over £2m from previous year | Power NI profits fall by over £2m from previous year |
(about 4 hours later) | |
Northern Ireland's biggest domestic electricity supplier has reported a fall in turnover and profits as a result of new competition. | Northern Ireland's biggest domestic electricity supplier has reported a fall in turnover and profits as a result of new competition. |
Power NI, formerly NIE Energy, made a pre-tax profit of £19m on turnover of £539.5m in the year to March 2011. | Power NI, formerly NIE Energy, made a pre-tax profit of £19m on turnover of £539.5m in the year to March 2011. |
In 2010 pre-tax profit was £21.2m on turnover of £596.8m. | In 2010 pre-tax profit was £21.2m on turnover of £596.8m. |
Airtricity entered the market in 2010, which reduced Power NI's residential market share from 100% to 97%. | |
The firm's market share among business customers also decreased from 24% to 19% over the year. | The firm's market share among business customers also decreased from 24% to 19% over the year. |
Power NI is a regulated business, meaning the Utility Regulator decides how much profit the firm is allowed to make. | Power NI is a regulated business, meaning the Utility Regulator decides how much profit the firm is allowed to make. |
As well as selling electricity to consumers, Power NI also has a power procurement business which makes wholesale purchases from power stations and sells into the Irish single electricity market. | As well as selling electricity to consumers, Power NI also has a power procurement business which makes wholesale purchases from power stations and sells into the Irish single electricity market. |
Together the two businesses made pre-tax profits of £36.6m on turnover of £826.5m. In 2010 the profit was £15.3m on turnover of £917.6m. | Together the two businesses made pre-tax profits of £36.6m on turnover of £826.5m. In 2010 the profit was £15.3m on turnover of £917.6m. |
The big difference in profits reflects the way the electricity market is regulated. | The big difference in profits reflects the way the electricity market is regulated. |
Profits limits are agreed between the regulator and the company years in advance. | Profits limits are agreed between the regulator and the company years in advance. |
If the firm makes more than agreed in one year it has to give back to consumers via lower charges. | If the firm makes more than agreed in one year it has to give back to consumers via lower charges. |
However, if it makes less than agreed in one year it can make up the difference the following year through higher charges. | However, if it makes less than agreed in one year it can make up the difference the following year through higher charges. |
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