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Northern Ireland's Utility Regulator has started a review of how the electricity grid operator is run.

The review is focusing on whether System Operator for Northern Ireland (SONI) is sufficiently independent of its parent company Eirgrid.

Eirgrid, an Irish state company, has owned SONI since 2009.

A condition of SONI's licence is that it must have full operational independence.

Eirgrid operates and develops the electricity grid in the Republic of Ireland.

The Utility Regulator has said that in the years since Eirgrid bought SONI their close relationship has "given rise to a perception of Eirgrid dominance over SONI and a suspicion that Eirgrid strategy has influenced SONI policies".

"Some parties in Northern Ireland have therefore expressed concerns about whether other Northern Ireland stakeholders, including consumers, are being treated on a fair and equitable basis," it added.

As an example, it noted there was no process for SONI to exercise discretion over which Eirgrid group management costs are assigned to it.

'Efficient, competitive market'

It added that it is possible that SONI compliance with Eirgrid procurement practices may have increased costs, compared with those it would have incurred if operating in a purely Northern Ireland context.

The regulator said that the operation of the electricity grid is becoming increasingly important in the context of the move to renewable energy.

It suggested the Eirgrid ownership of SONI could therefore potentially frustrate government energy policy in Northern Ireland in the absence of robust independence arrangements.

It said that problem could arise if the strategic direction of the Eirgrid group was influenced by the direction of policy in the Republic of Ireland and SONI was so integrated into Eirgrid that it could not depart from the group's direction of travel.

The regulator said that at a minimum the independence clause of SONI's licence needed to be amended to give greater clarity.

It has also invited discussion about whether SONI should have greater managerial independence or a fully independent board of directors.

SONI's managing director Jo Aston said the business had delivered an "efficient, competitive market for customers in Northern Ireland, while assuring security of supply".

She said SONI would engage with the Utility Regulator in the review.