The 11 per cent and 32 per cent increases in the price of electricity and gas that were announced by Electric Ireland on Friday were not entirely unexpected. But the scale of the increases was still shocking. It is likely to bring closer scrutiny to the semi-state company’s profits in future.
The increases for August come after similarly hefty price rises in May. The price of gas at the company has almost doubled since last year, while the price of electricity (about half of which is produced from gas-fired power plants) is up by two-thirds for its 1.1 million customers.
All of the major utilities in the Republic have pushed through a succession of price increases in the last 18 months. Industry analysts say there are more to come later this year. It could be a bleak winter.
But such huge increases may come with a sting in the tail for, in particular, the State-owned Electric Ireland, which is part of the ESB group. Last year, the group announced a 10 per cent increase in its operating profits to €679 million, while its dividend to the State rose by more than half to €126 million.
Just as winter ends early next year, the group will be reporting its profits for 2022. If it is shown then to have posted an even bigger increase in profits in 2022 at a time when its customers are being put to the pin of their collar with price rises, the ESB will find itself in the middle of a political storm.
Fianna Fáil TD Barry Cowen has already accused the company of earning “super normal” profits in the wholesale electricity market — an accusation which ESB flatly denied. He labelled the company “self-serving” and called for it to be sold.
If by the end of this year ESB appears to have profited unduly from the pressure facing consumers, the political backlash will make Cowen’s comments seem like praise