Network costs drive electricity price rise
INCREASED NETWORK charges and the euro’s weakness against sterling will leave State-owned ESB’s 1.3 million household customers facing a near 6 per cent increase in the cost of their electricity from next month.
ESB subsidiary Electric Ireland, which supplies electricity and natural gas to domestic customers, yesterday announced that it was increasing its electricity charges by 5.9 per cent from October.
The move will add about €50 a year to the average household electricity bill, bringing the total annual cost close to €800.
At the same time, the company plans to increase natural gas supply charges to householders by 8.5 per cent, in line with the price rise for the ESB’s rival, Bord Gáis, that the Commission for Energy Regulation approved this week.
It emerged earlier this week that electricity prices were due to rise following a decision by the regulator to increase charges for use of the Republic’s electricity networks, that is the national grid and distribution system that transmit power from generating plants to customers.
The ESB owns the national grid but another State company, Eirgrid, manages it. The extra charges are designed to pay for a number of developments, including the new electricity interconnector with Britain and redeveloping the network to take on more wind energy.
The regulator estimated that the network charges would add up to 3.5 per cent to electricity prices.
Electric Ireland said yesterday that along with the network charges the public service obligation, charged to all bills, was also increasing.
The charge is imposed to pay for the price supports given to wind farms, peat-fired plants and two private sector operators, Tynagh Energy and Aughinish Alumina.
It will add a flat €2.32 monthly charge to all household bills, or €4.64 to payment demands received every two months.
That, combined with the extra network charges, accounts for two-thirds of the increase, Electric Ireland said. The company blamed the euro’s weakness against sterling for the remaining third.
About 60 per cent of the electricity consumed in the Republic is generated by burning natural gas.
Most of our natural gas is imported from Britain and is paid for in sterling.
Electric Ireland general manager Liam Molloy said the company regretted increasing its charges.
“We are acutely aware of the financial pressures facing our customers and we have done all we can to minimise the increase,” he added.