Customers face price rises for electricity and gas

Consumers are facing a 9 per cent rise in electricity prices from next month and a 11 per cent rise in gas prices before the …

Consumers are facing a 9 per cent rise in electricity prices from next month and a 11 per cent rise in gas prices before the end of the year, it was announced yesterday. Emmet Oliver reports.

The energy regulator, Mr Tom Reeves, said the increases were needed because of the escalating cost of fuel on world markets.

Businesses will also be hit by the 9 per cent ESB increase, but are facing a 16 per cent rise in gas prices. There was a hostile reaction to the announcements from business groups and politicians.

However, Mr Reeves said it must be recognised that the majority of ESB power plants were fuelled by oil, coal or gas and these costs had risen sharply.

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"Over the past year the price of oil has reached record levels, with Brent crude, at the end of August, 59 per cent higher than the same time last year. Gas prices have increased by 49 per cent and coal 77 per cent," said Mr Reeves.

He said the 9 per cent ESB increase, to start from October, was an average figure and "low usage customers" would not be paying the full 9 per cent, although he admitted large users would pay more. For the average customer the increase would mean €1 per week extra, he said.

Further ESB rises could be on the way. Mr Reeves said he was considering allowing a 3.5 per cent increase from January and would make a decision on this at the end of September.

He said this increase was needed to address "increased costs, mainly environmental, networks and public service obligation levies".

The ESB said it fully recognised that price rises had an impact on both domestic and business customers. "However, in light of the major changes in fuel charges, a rise in electricity tariffs is unavoidable and we therefore welcome today's determination on electricity tariffs by Mr Reeves.

"The delay in reflecting fuel price increases in tariffs over the past two years has shielded customers from the imposition of the full impact of the fuel cost hikes in 2003 and 2004. ESB has been carrying this increase in fuel prices since the start of 2003 and has accumulated a cost shortfall of €196 million," said a company statement.

The Fine Gael spokesman on communications and natural resources, Mr Simon Coveney, said "rip-off Ireland was alive and well". "Thanks to Government policy, householders and businesses are the victims. It seems no matter what the impact on consumers, and no matter how negatively such price rises harm the business sector, the green light is inevitably given.".

Green Party energy spokesman Mr Eamon Ryan blamed Government policy. "They have only partly deregulated the market, but have left the ESB in a dominant position where they will still set electricity prices," he claimed.

Mr Reeves said he was close to approving an 11 per cent increase for householders using Bord Gáis Éireann (BGÉ) and 16 per cent for companies supplied by BGÉ.

He also ordered the ending of all discounts given to major customers by BGÉ by October 2006.