DOU­BLE WHAMMY: ELEC­TRIC­ITY AND GAS PRICES TO RISE

Bord Gáis and SSE Air­tric­ity re­veal bill hikes, blam­ing ris­ing costs

Irish Daily Mail - - Front Page - By Chris­tian McCashin

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’

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