A CONSULTATION paper calling for major changes in the way the electricity industry in the North is run has been welcomed by NIE and one of the leading generating companies, Premier Power.

NIE, headed by chief executive, Dr Patrick Haren, said it would consider the proposals very carefully, while Premier Power's chief executive, Mr Brian King, said he had discussed the issues with the regulator and had put forward some tentative proposals.

The electricity watchdog organisation, Offer, published the set of proposals which it claims will give Northern Ireland customers more control over electricity prices, including the chance to buy electricity direct from the ESB.

The proposals are titled Consumer Choice, Competition and Prices. Its publication follows claims from the Northern Ireland business community that the rising cost of electricity is putting local companies at a serious disadvantage compared with firms in Britain and the Republic.

The Confederation of British Industry in Northern Ireland has repeatedly called for a system which would allow businesses direct access to electricity generators. It says it would lead to a significant reduction in prices.

Ms Deirdre Stewart of the CBI said the difference between prices in Northern Ireland and the rest of Britain can be as much as 30 per cent.

"We are not competing on a level playing field," she said. "It means local companies have to try much harder to keep pace with the competition."

It is a view shared by Offer's director general, Mr Douglas McIldoon. He said the high price being paid by Northern Ireland firms, and its increasing divergence from that paid by their British counterparts, has become unacceptable.

"Over the past three years my predecessor had made a considerable effort to increase competition in the electricity market in Northern Ireland," he said. "But widespread reservations were expressed about the benefit of his proposals. Accordingly, I have put forward an alternative approach with much greater emphasis on consumer choice which will stimulate competition and put, downward pressure on prices.

The recommendations include doing away with the requirement that all supplies must be bought through Northern Ireland Electricity (NIE) allowing some customers to set up direct lines from the generators allowing some to buy from the ESB via the North South interconnector and encouraging the generation of on site electricity.

The current system in Northern Ireland was set up during the reorganisation of the electricity industry in 1992, and the privatisation of NIE the following year. It required electricity generators to sell their entire output to NIE's Power Procurement Business for resale to private and corporate customers.

Some companies have already announced they will be taking their own steps to reduce costs. The Belfast aerospace company, Short, for example, is to start generating its own power at its Queen's Island factory from next year. It says that it has taken the decision because of the continuing rise in the cost of electricity, and believes it can save several hundred thousand pounds a year as a result.