James Kerr: "The industry has structural problems"

Northern Ireland Electricity was floated on the Stock Exchange and retained responsibility for transmission, distribution and the supply of power.

Generation at the power stations was sold to industry investors.

There is no doubt that the industry has structural problems, it is on a relatively small scale, until now there's been little interconnection with the British mainland and the Irish Republic, and much of the infrastructure is getting old.

NIE argues that since privatisation, it has cut its costs and that the reason for higher prices in Northern Ireland now lies largely at the door of the generators.

The regulator says NIE needs to cut its cost further, but also points the finger at the generators who were granted long term contracts at the time of privatisation.

The terms of these contracts have attracted widespread criticism as guaranteeing good profits for the companies, and poor value for consumers.

Through a mixture of exhortation and coercion, the regulator has been attempting to get both sectors to cut their prices and this has had some success - although consumer organisations would argue there is still a long way to go to narrow the gap with the rest of the UK.

The announcement of an impending price increase will only help make that task more difficult.