Our cables have been there for some time and we have no plans to expand the network unless another Scottish island, over and above the 59 islands that we supply, becomes inhabited. Then we would have to look at that. The cables are already there. There are 111 separate cables serving 59 islands, and they have been there for a considerable time. They supply tens of thousands of customers on the Scottish islands who would count themselves as, in Mr Armstrong’s words, established users of the sea. They need those cables to get their supply, and I think that they have every right to be concerned about what is in the plan.
We have some experience of the plan, which we believe was being employed when we tried to replace the mainland to Jura cable. I would be the first to admit that that took far too long and that we left those customers on diesel generation sets for far too long. There were faults because of that and we had to man the diesel sets 24 hours a day. It was a serious situation and such situations need to be addressed in the plan, but they are not.
On the subject of the environment, Mr Dey talked about electromagnetic fields at the committee’s previous meeting. EMFs are scientifically dealt with pretty well on land, and central Government has set exposure limits for that situation. I am no expert on the matter, but I assume that the same limits apply in the sea. There are no issues for humans that I am aware of, and the plan says that there is no evidence of issues for the marine environment. All that I can say is that, when we undertake inspections of our cables, we find significant marine life around them. That is not to say that having the cables there is necessarily a good thing, but we find a lot of marine life around our cables—that is a fact.
The other issue is the economic issue. We have just finished a price control review with our regulator, the Office of Gas and Electricity Markets—we are a heavily regulated business. Over the next eight years from April 2015, our income will be governed by the business plan that we submit to Ofgem, although there will be a bit of negotiation along the way. In essence, Ofgem will tell us what it is going to give us and we will try to get a wee bit more on the basis of what we believe is the right level of expenditure to enable us to serve our customers going forward. Largely, we got what we asked for in the most recent price control review—Ofgem gave it to us.
However, when the mainland to Jura situation arose, we were in a completely different position. We had made a submission for £48 million both to replace and to repair some of the cables. The policy to protect or underground all those cables would add £280 million to, in effect, customers’ bills—that is the bottom line. That is the reality of it, although I am not saying that we are not prepared to conduct a cost benefit analysis of that policy.
After we had applied for a licence—indeed, it was when we were discussing with Marine Scotland the subject of a licence and Marine Scotland told us that we were going to have to underground the cable—we took the matter so seriously that we organised a meeting with the regulator and Marine Scotland, because we knew that we were far short of the amount of money that we needed for that in the current price control period. Ofgem came to the meeting, we talked about the issue and we agreed—at least, we thought that we had agreed—that a cost benefit analysis would be undertaken, that the work would be proportionate, that we would do the right thing on the basis of the evidence and that it would be risk assessed. However, we had to get the mainland to Jura cable in place more quickly than that, so we told Marine Scotland that we would be prepared to go through that process afterwards.
In every single case, we would be prepared to do that afterwards if there were a fault, for instance. We are perfectly prepared to talk to the stakeholders about their concerns and to see whether there are any safety issues. However, to our knowledge, there have been no safety issues with any of our cables that have resulted in either injuries or deaths. There are none in the marine accident investigation branch figures going back 20 years. As far as we are concerned, there is no safety issue. Nevertheless, we accept that each circumstance might be different and that we would need to discuss it with the stakeholders.
We believe that the implications of chapter 14 for distribution cables were not fully consulted on although they absolutely need to be. Mr Russell is correct in saying that the plan is both specific and explicit, and it takes some skill to make a plan that is both specific and explicit yet still unclear. That is what appendix 2 of our submission is about. We have made those comments before—we made them during the first and second consultations but, as far as I am concerned, they were largely ignored.
As I said at the beginning, we need chapter 14 to be consulted on again, and we will contribute to that. We are perfectly happy to go forward with a cost benefit analysis, but we want evidence and a risk assessment to be included, because our primary concern is our customers on the islands. It is not about this business; it is about our customers on the islands, security and economics. There will be a downside for them if the plan goes through as it is at the moment.