Ireland’s top energy firms have declined to indicate when they will pass on reduced wholesale rates to consumers.
As a new report indicated that household electricity costs in Dublin are now the highest in the European Union, with consumers facing annual bills of up to €800 more than the EU average, the big players in the market here said lower wholesale prices would “take some time” to be reflected in retail prices.
Bord Gáis said it was committed to protecting customers from wholesale energy cost volatility as evidenced by a €30 million loss it reported for the first six months of this year.
“As we buy energy up to 18 months (and sometimes longer) in advance, the impact of the lower wholesale prices being seen over the past few months will still take some time to be reflected in retail prices,” a spokeswoman said.
“Any potential price change in the future is dependent on prices remaining stable over a prolonged period,” she added.
Rival SSE also seemed to blame hedging, the process where firms enter contracts to buy energy in advance, for the lag between wholesale and retail prices.
“Like other suppliers, SSE Airtricity buys energy on the wholesale market many months in advance,” a spokeswoman said. “Our approach to hedging means we have been able to protect customers from the full impact of wholesale market volatility, helping to ensure stability for customers and limiting their exposure to market extremes.
“Wholesale prices still exceed where prices were pre-crisis. However, we actively monitor energy markets and, as we have done before, will reduce our prices as soon as it is possible to do so,” she added.
Electric Ireland, the firm with the largest market share of electricity customers, said it was forbidden by the regulator from “price signalling”.
However, it said it had not increased its residential prices since October last year and keeps its prices under constant review.
“Electric Ireland continues, as it has since before the onset of the cost-of-living crisis, to offer one of the lowest-cost standard variable tariffs for residential customers in the market, even after the reductions announced by other suppliers are applied,” a spokesman said, while noting the company had not made any profit in its residential electricity business for 2022.
It said hedging had protected Electric Ireland customers from extraordinary wholesale price volatility, saving each customer about €650 over the past two years.
Energy advisory company VaasaETT’s latest household energy price index indicated that household electricity costs in Dublin were the highest in the EU, with Irish consumers facing annual bills that are about €800 more than the EU average.
Commissioned by the Austrian and Hungarian energy regulators, it said consumers here are paying 47.12 cent per kilowatt hour (kWh) including taxes, almost double the European average of 26.34 cent. Given that households use, on average, 4,200 kWh of electricity each year, consumers in the Republic may be paying more than €800 more for electricity than their EU counterparts.