Sam McBride: The most important firm in Northern Ireland you’ve probably never heard of – but are paying for
One of the many damaging consequences of sectarian division is how it distracts from major problems which affect us all. Sometimes it diverts attention from problems which are costing us financially. For those making money at our expense, that suits them just fine.
But if Northern Ireland is to improve we need to develop a sixth sense in the wake of a crisis which seeks to find what we’ve missed.
In August 2015, former IRA man Kevin McGuigan was murdered in east Belfast’s Short Strand. The police assessment that the IRA was responsible precipitated an inevitable political crisis.
The UUP walked out of government, while the then first minister, Peter Robinson, cannily constructed a means of appearing tough while trying to keep the Stormont car on the road. He began a series of rolling resignations of DUP ministers who would leave office for several days before briefly coming back in for a few hours and then resign again.
It was a piece of political theatre which captured most of us. Eventually, the ministers all returned to work and the Executive resumed its faltering approach to governance.
The possibility of devolution falling apart for the first time in eight years necessarily was the focus of intense media scrutiny.
And yet, we now know it was at precisely this moment that those in the know were piling into the cash for ash scheme before it could be reined in.
The crisis which many people, this writer included, believed might topple devolution did not. The crisis about which we were then wholly unaware eventually did.
It is an example of how when politicians, the public and the media are looking in one direction, that means that we are not looking in another: there is a limited number of journalists and politicians with limited time; newspapers only have so many pages; television programmes only have a set length of time.
For the last fortnight, most political energy, and the focus of most media debate, has been on street disorder which began in the week before Easter. While that was happening, a major report on electricity – which again has roots in Arlene Foster’s time as energy minister – has received scant attention.
On Good Friday, the Utility Regulator published the outcome of an investigation which it has been undertaking for 20 months. The investigation relates to probably the most important company most people have never heard of – SONI (the System Operator for Northern Ireland).
That monopoly company operates the electricity grid from a high-security control room in the Castlereagh Hills.
Along with the water supply, it is one of the most critical aspects of any national infrastructure. If it fails, the lights go out.
However, three years ago I was intrigued while watching the Six Nations to see a fancy television ad from the company at half time – an expensive slot usually filled by top brands.
It was highly irregular because it meant that every electricity consumer across Northern Ireland – whose bills were already among the highest in Europe – was paying for SONI to advertise itself to them, even though it has no product to sell and no one has any choice over whether to use the company.
For some reason, the company has been spending our money lavishly (it refuses to say just how lavishly) on a major spin operation – sponsorships of everything from Ulster Rugby to the GAA and even a pipe band, through to sponsorship of myriad business groups and events.
Despite that expenditure on how it presents itself publicly, staff were angry that they had not received pay rises for years and in 2019 many SONI staff were on the verge of walking out on strike until the company made an 11th hour pay offer.
But SONI is not just a commercial company operating as a monopoly running critical infrastructure - it is doing so as an off-shoot of the Irish Government.
More than a decade ago, the company was sold to EirGrid – its equivalent in the Republic which is wholly owned by the Irish government.
The history of electricity in Northern Ireland is about more than power measured in watts – in 1974 electricity was used as a weapon by loyalists to bring down power-sharing, meaning that there is unusual political sensitivity in this area.
The regulator’s report published two weeks ago states that the regulator is not persuaded that there is a problem with the company being owned by the Irish government. But that is where the good news ends for SONI.
In a comprehensively devastating 120-page report, the regulator expresses deep concern about multiple aspects of what is going on. Central to the problem is that whereas SONI has a legal duty to act independently of its Dublin owner, it appears to have been hollowed out in key areas.
The way SONI is run “is inadequate to ensure the protection of the interests of NI consumers over the long-term”, the regulator said.
Whistleblowing is “controlled by the Eirgrid board”. SONI’s governance arrangements “do not meet our vision for good governance”.
Its governance responsibilities “are effectively discharged by EirGrid plc, and not by SONI Ltd” and the way EirGrid operates is “not designed to enable SONI to act as an equal partner, nor even to be perceived as an equal partner with its own guiding mind”.
The SONI board which exists is presented as something of a nodding dog: “Plans, policies, cost and benefit allocations are not wholly transparent or approved by an effective SONI board”.
EirGrid is increasingly centralising power in itself, in areas from management to procurement, but this is “potentially to the detriment of NI consumers”.
The objectives of management and staff “are predominantly aligned with the shareholder [the Irish government], without sufficient balance in respect of NI consumers”. Overall, there is “a potential, and increasing potential, for harm to result from the current operating and governance arrangements”.
Many millions of pounds have been flowing from SONI to EirGrid, and it’s not quite clear why. Bluntly, the regulator says there is the potential for “inappropriately higher prices for NI consumers”, particularly by Eirgrid using complex accounting moves to hide what is going on.
Some in the industry believe that when Jenny Pyper – now interim head of the civil service – was regulator the body was too weak in allowing the SONI problem to develop over many years. Amid increasing concern about what was going on, she established this review which has been completed by her successor, John French.
The regulator has set out proposals to toughen the rules by which SONI is bound, and is asking the public for feedback on what it should do.
However, there are inherent tensions in some of what is proposed and what is reasonable to expect. For instance the regulator suggests that on all-island matters the two system operators should “work together collaboratively but as equal partners representing their own consumers”. It is difficult to see how staff in a subsidiary company can be expected to go against that parent company. And yet without that, they cannot be equals.
Another key proposal is for a genuinely independent SONI board – yet that board will be appointed by EirGrid, opening the potential for window-dressing.
Energy policy often seems dry and technical until it goes wrong. Paul Frew and Jim Allister are very much the exception in asking awkward questions of SONI over recent years.
As with RHI, there is scant evidence that energy division in the Department for the Economy has been on top of these problems.
Those pressing for this to be investigated have often been whistleblowers who have done so at considerable risk to themselves.
Ultimately, if we as the public do not take a keener interest in these issues, then we will pay for it – literally.
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