Saturday, August 13, 2022

Fourth Electric Ireland price hike in a year sparks fears of an energy cost spiral

The household budget is set to be shut down by further energy price hikes.

The move by Electric Ireland to hit its more than one million customers with its fourth increase in a year has prompted fears that other suppliers will now raise their prices again, triggering a new energy price-hike spiral. .

There were 35 different energy price hike announcements last year, 14 price hike announcements have been made so far this year.

It comes as new figures show that inflation in this country last month hit a 40-year record close to 10 per cent.

Electric Ireland is raising its power unit cost by 11 percent in August, and raising its permanent electricity tariffs by the same amount.

This means that even if its electricity customers turn off all their lights and other electrical equipment, they will still pay €300 in permanent fees to the state-owned energy supplier.

The latest price hike is despite ESB, which owns Electric Ireland, which made a profit of €679m last year.

This is the second hike in Electric Ireland prices this year and the fourth since August last year.

The latest move would add €164 a year to the cost of electricity for its 1.1 million customers.

When the latest hike takes effect, electricity prices at the state-owned company will have risen by a cumulative 67 percent from last year.

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It is raising gas prices by 32 percent in August, while the gas standing charge is increasing the same percentage.

An increase in the standing charge would add €42 per year to the average bill. The cost of gas will be €350 more expensive a year after the latest increase.

The four increases would mean an increase of about €670 in electricity bills since last June, which includes VAT.

And the gas bill including VAT would have increased to €650.

In percentage terms, Electric Ireland gas prices will increase by 93 percent when the new increases are implemented for its approximately 145,000 gas customers.

There was an increase in April this year and also in November and August last year.

The company repeatedly attributed the increase in the cost of bulk gas by 400 pc to the price hike and insisted that it has the lowest standard unit rate for electricity in the market.

Electric Ireland also said it has pledged to provide €3m for a new hardship fund to support its customers.

Susan Ward, Interim Executive Director of Electric Ireland, said: “We delayed this increase for as long as we could, but unfortunately, the situation in Eastern Europe and the reduction in gas flow reliability resulted in continued high energy consumption across Europe. The cost has come.

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“We’ve seen a huge increase in the cost of bulk gas, which in turn affects both our gas and electricity prices.”

Asked how the latest increase could be justified, with its parent company, ESB, making a record profit of €679m last year, Electric Ireland said it operates in a competitive environment under Irish Economic Competitiveness rules et al. The market, like the market itself, is subject to the pressures of volatility. energy supplier.

Darragh Cassidy of price comparison site said the growth will be badly felt in many homes across the country, given the size of Electric Ireland.

“We are going into next winter with gas and electricity prices at absolutely astronomical levels. And it could get worse,” he said.

High energy costs are the main reason why inflation in this country is projected to reach 9.6 percent last month.

Energy costs in Ireland are projected to increase by 54 percent since June last year.

Eurostat said eurozone inflation is expected to come in at 8.6 percent in June. Economists said the rise in inflation in Europe would lead to copper-sharp moves by the European Central Bank to launch a series of interest rate hikes this month.

Dermot O’Leary, economist at Goodbody Stockbrokers, said the squeeze on disposable income is going to get worse later this year.

Nation World News Desk
Nation World News Desk
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