Northern Ireland Electricity (NIE) has warned it might have to cut 300 jobs and reduce emergency cover if the electricity regulator's proposed price cuts are introduced. As part of a five-year-review, regulator Mr Douglas McIldoon made proposals in March which would see the average household electricity bill in the North reduced by around £27 sterling (€43) a year.

NIE yesterday asked the regulator's office, OFREG, to revise the proposals for the firm's transmission and distribution operations saying they would lead to reduced investment levels as well as reduced day-to-day expenditure. The firm, with 1,500 employees, had planned to spend £289 million sterling on operating costs but OFREG has limited this to £182 million.

The proposals would make job cuts and customer service centre closures inevitable and dramatically reduce NIE's capability to respond to storm damage and other supply interruptions, the firm argued.

Should OFREG persist, NIE would be forced to call in the Competition Commission.

NIE's managing director, Mr Harry McCracken, said the company had made major steps in improving service quality which were now in jeopardy.

"NIE will remain committed to giving customers the best level of service and emergency cover possible, but if we are stripped of resources, it is inevitable that standards will fall."

Mr McCracken insisted it was unfair to compare electricity prices in the North with cheaper tariffs in England, Scotland and Wales as customers here required about 50 per cent more equipment such as poles, line length and transformers due to predominantly rural terrain and a dispersed population. This made OFREG's proposals "go beyond anything that is at all practicable", he argued.

"Consequently, NIE cannot accept the proposals as they stand and we are asking the regulator to bring forward practical proposals based on proven regulatory process.

"If OFREG is unable to do this, NIE will have no choice but to ask for OFREG'S proposals to be referred to the Competition Commission for an objective assessment of what resources are needed to run the electricity network here."

The Northern Ireland Consumer Committee on Electricity yesterday called for compromise saying both parties should strive for a "happy medium where quality can be supplied at a reasonable price".