Families face paying about €8.41 a month more for electricity from October 1st to pay for investment in the Republic’s energy networks, regulators confirmed on Tuesday. That will add just over €100 a year to domestic electricity bills.
Electricity customers pay standing charges on their bills to cover the cost of maintaining the network that transmits power to homes and businesses.
The Commission for Regulation of Utilities (CRU) said on Tuesday that those charges could increase by €8.41 a month on average for homes and businesses to cover these costs from October 1st.
Standing charges run to between €25 and €30 a month currently, or more than €50 on the two-monthly bills paid by many homes. While households can lower bills by cutting back on energy use, they are stuck with standing charges regardless.
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According to the commission, which oversees the Republic’s electricity industry, State companies ESB and EirGrid need €1.4 billion to maintain and expand the national grid and distribution systems.
The increase is high this year partly because the regulator cut the charges by an average of €6 a month over the 12 months from last October to compensate most electricity customers for the effective undercharging of large energy users between 2011 and 2022.
That prompted the CRU to return €100.86 million to customers.
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Electricity suppliers can choose not to pass on all or some of the CRU-sanctioned increase from next October, the regulator said. The agency determines network charges but allows suppliers to decide themselves whether they will absorb or pass on the cost.
EirGrid is responsible for the national grid, the backbone of the system that transmits electricity from power stations to customers, while ESB Networks has charge of the distribution network that links individual homes and businesses to the grid.
The CRU said in a statement that the €1.4 billion needed to maintain and expand the State’s electricity networks would be 38 per cent more than the amount required over the 12 months to October 1st.
Electricity networks must be “expanded and modernised” every year to provide secure and unbroken supplies to customers, the regulator noted. The Republic faces an extra challenge as it plans to boost renewable electricity generation in coming years. That will require extensions and other major changes to its national grid.
The regulator explained that the Republic is going through an “unprecedented change in use and demand for electricity”.
That requires significant investment to ensure the State has a network that supports demand from all customers, along with the shift from fossil fuels and the use of electricity to heat homes and power transport, its statement noted.
Karen Kavanagh, the CRU’s director of networks and economic regulation, said the commission’s had to assess ESB’s and EirGrid’s requests for investment in the networks to ensure they were needed and would benefit customers while keeping costs as low as possible.
“This must be balanced with the needs for further maintenance, upgrade and development of the network to facilitate lower-carbon alternatives in heat and transport and the ongoing provision of a reliable network to supply customers that is vital to the needs of a growing population,” she added.
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