Cost of Kilroot clean up could treble
One of scandals arising out of electricity privatisation is that NIE customers will have to meet the costs of cleaning up Kilroot power station. It has been the case since privatisation of the electricity industry that if Kilroot were to install equipment to clean out sulphur from the power station’s emissions it would be entitled to pass on the bill, with NIE in effect acting as the collecting agent. The US owner of Kilroot, AES, has now invoked a clause in its contract which means any costs which arise from changes in environmental legalisation can be passed on to customers.
The initial estimate of the cost fitting
the desulphurisation equipment was £35 million. This was made
up of £30 million for construction and £5 million for contingences.
However, that estimate has risen dramatically. The construction and
associated costs have jumped to £55 million and the contingencies
have also risen to £55 million. NIE customers are now facing
a potential bill of £110 million. Such liabilities could have been
avoided if electricity had remained a publicly owned utility. They
also could have been avoided had ministers not given approval for the installation
of desulphurisation equipment. This approval flew in the face of
advice from environmentalists and the regulator that the best option for
a “relatively inefficient and dirty” plant such as Kilroot was the phasing
out of production.