DOUBLE WHAMMY: ELECTRICITY AND GAS PRICES TO RISE
Bord Gáis and SSE Airtricity reveal bill hikes, blaming rising costs
HOUSEHOLDS have been hit with a double whammy as electricity and gas price rises were announced yesterday.
As consumers face into winter Bord Gáis said it is hiking its standard electricity bill by €4.77 a month, as well as increasing its gas bill by €2.12 a month. Over a year, this would mean a combined increase of €82.68 for an average customer.
The announcement came only hours after rival SSE Airtricity announced it was increasing its typical electricity bill by about €3.90 per month, or just under €47 per year. The price increases
prompted fears that some families could struggle to meet their energy bills this winter.
Research published earlier this year suggested that three in five Irish households were forced to borrow to meet the costs of bills last year.
The average yearly bill for electricity customers on a standard tariff is estimated at €947.12, while a gas customer on standard tariffs pays €755.21. Both companies blamed increased electricity grid and gas pipe charges and recent rises in wholesale gas prices as demand increases coming into winter. Wholesale gas prices soared by 33% at the beginning of this month.
The quick succession of announcements prompted warnings from industry experts that other suppliers could soon follow suit with price increases of their own.
Experts also stressed that the increases underlined the importance of shopping around. Consumers’ Association of Ireland chief Dermott Jewell said: ‘It will be important to see who comes next and undoubtedly somebody will, because somebody’s broken the ice and with that happening it’s going to raise questions in terms of competitiveness.’
However, he emphasised that savings were available to consumers who shop around. ‘This is an ideal opportunity for consumers to consider switching, because they are almost guaranteed to make a saving,’ he said.
The rises were described as a warning to all consumers that, following three years of cuts, hikes are back on the agenda. Just weeks ago, Bord Gáis, the country’s largest gas supplier with half the domestic market, admitted it was ‘under pressure and looking at prices’.
Its boss, Dave Kirwan, said yesterday he regretted the increase and added: ‘Continued increases in wholesale energy costs this winter, as well as the recent increases to the costs of distributing energy on the network, have forced us to raise our prices.’
SSE Airtricity director David Manning said: ‘This decision was not taken lightly and is driven by rising costs outside of our control. These include recently announced increases to regulated charges for using the electricity networks, which affect all suppliers, as well as prolonged increases in the cost of wholesale energy on global markets.’
Commercial energy supplier Vayu says one of the main causes of the gas price rises is supply issues in Norway leading to pent-up demand. Additionally, Hurricane Harvey has hit production in the US.
‘Supply issues in Norway have resulted in the level of gas being supplied into the UK being less than the demand, which had a significant impact on the wholesale gas price,’ it said in a report.
The price rises are the first in almost four years. Bord Gáis announced a hike in January 2014, which came in two months later, but since then energy prices have tumbled.
Electricity prices are closely linked to gas prices as almost half is generated in gas-fired power stations.
Eoin Clarke of price-comparison website Switcher.ie boss Eoin Clarke said: With these two announcements coming so close together, it is now very likely other suppliers will follow suit.’
The Public Service Obligation levy on electricity bills – which provides financial support for peat generation and the development of renewable electricity – is also expected to increase by about €2 a month from today.
Mr Clarke said: ‘If you have been with your supplier for over 12 months, you will save by switching. You could save up to €324 by switching from typical standard tariffs to the cheapest deals on the market, which could go a long way in the face of these price hikes.’
Mark Whelan, of price comparison site Bonkers.ie, said: ‘Average SSE Airtricity customers can expect to pay about €47 more for electricity over the course of a year, while average Bord Gáis Energy customers will end up paying about €25 more for gas and €47 more for electricity.
‘The silver lining is that customers can easily offset the pending increases by switching suppliers. There is an average of €324 to be saved by doing so and with ten energy suppliers now operating in the Irish market, there has never been more choice available.
‘This is driven by rising costs’