The European Commission has approved compensation for stranded costs to Northern Ireland Electricity.
Stranded costs are defined as the value of unamortized investments in electricity assets that could not be recovered in a deregulated market or the difference between the market value and the book value of these assets.
After liberalisation of the electricity sector in Britain, long-term fixed price power purchase agreements were established between NIE and four generators in the North.
The British government estimates that the fixed prices could result in stranded costs of between zero and £5 million sterling per year, the commission said.
Under the British compensation scheme, a levy will be imposed on all final consumers and will be collected by the distributors or the network operator and transferred to NIE.
The commission concluded that the levy and power purchase agreements system does not involve the transfer of state resources and thus does not constitute state aid.