CER wrong on prices - report

A new report has questioned whether higher fuel costs were really the main contributory factor to higher wholesale electricity prices late last year.

The report by consultants Energy Link suggests the Commission for Energy Regulation (CER) failed to consider other factors which pushed up prices. The report was commissioned by the renewable energy group Airtricity.

Airtricity has left the domestic market because it said it could no longer efford electricity "top-up" prices charged by ESB. Top-up electricity can be bought by power companies when they do not have enough capacity to supply all their customers. A report recently from the CER said fuel prices were to blame for higher top-up prices.

But the Energy Link report accuses the regulator of a "failure of logic" and of including a "fundamental flaw" in its calculations.

The report says: "It is in many ways surprising that the CER reached such a strong conclusion on the impact of fuel prices, considering the evidence it presents itself and other evidence readily available to it".

The report suggests the poor availablility of ESB stations to generate power should have been considered a more important factor.

The report also suggests that higher oil and gas charges cannot be regarded as the exclusive causes of higher wholesale prices. The report asks why wholesale prices went up in Ireland before other European countries which were also subject to higher international fuel bills.

Graphs used by the consultants show that prices in Ireland started to rise materially in August, but only started to push up in November in mosth other European countries.

The report says the CER should have investigaed other reasons for prices rising.