Shock from electricity bill left me reeling

IT’S not like it was unexpected, but I still nearly fell through the floor when the electricity bill dropped online yesterday. For weeks, I have seen friends on social media reporting massive increases, so I had pretty much steeled myself for bad news – just not this bad.

I had a so-called affinity deal with Bord Gáis for the 12 months up to early February, and negotiated a new contract at that point for 10% discount, so the final bill reflected both rates. Nonetheless, the final tally came to an eyewatering €541.08 for the January and February period, which still is €341.08 after the €200 Government subsidy is deducted.

My usage was up by a third over the same period last year, in small part because I topped up the charge on a couple of electric cars in the driveway as part of my job test-driving them, but mostly, I suspect, because I’ve been using an electric heater during the day in my home office rather than heating the whole house. That might have been foolish, because kerosene, my primary heating system, has actually dropped in price, from €435 per 300 litres on my previous delivery, to €340 last week.

Staggering

So let’s break down the increases we have seen over the past two years. On the March bill in 2021, the standing charge was 44.14c a day. In March last year, it was 54.99c, and now it is 70.66c. That’s a rise of 60% in 24 months.

As for the cost per kilowatt hour consumed, that was 17.67c in January 2021, 23.61c last year, and 44.21c now, a rise of a quite staggering 150%. The only saving grace is that the public service obligation levy has temporarily been abandoned, and the VAT rate has dropped from 13.5% to 9% – otherwise we would be totally goosed.

The even more laughable thing is that when I posted this on Twitter, many people came back to me to tell me I had got off lightly. One friend, a man who lives with his family in a A2-rated home for energy efficiency, using a heat pump for warmth, was slapped with a bill for his December and January usage of €1,214.

There’s very little access to gas in Co. Wexford, with only 1% of homes using it for heat (compared with 75% in my native Dún Laoghaire-Rathdown), and maybe that’s just as well. Another friend shared the gas bill for the home of his parents, both in their late eighties. From December 30 to March 1, it came to €987.06. Almost a grand for two months for pensioners to stay warm – how is that sustainable?

Of course, part of the explanation for the increases lies in the carbon tax, which accounted for €74.19. Surely, at the every least, pensioners should be exempt from paying that portion? Carbon tax takes no account of means. In fact, it disproportionately affects pensioners who are at home all day, unlike those who work in offices or other on-site facilities and have children at school, allowing them to leave the heating off during weekday daytime hours.

This month, I have to budget for the renewal of my house insurance, my one-off property tax, 300 litres of oil, my television licence, and now €341 of electricity. For the first time ever, I’m putting the house insurance and TV licence on monthly direct debit, because my mortgage also has gone up by €91.14 a month since last year. That sounds modest enough until you realise it totals €1,093.68 a year, with at least one more European Central Bank interest rate rise to come before, if the predictions are correct, inflation eases towards the end of the year.

But who knows if that will happen? Thirteen months ago, we were getting back on our feet after the pandemic when Putin’s invasion of Ukraine sent shockwaves through the global economic system, and highlighted just how much Europe in particular was exposed to the supply of cheap Russian gas. In a highly connected world, economic cataclysms can strike at any time.

Of course, the knock-on effects are massive, especially in food inflation. The cost of transporting it has risen thanks to higher diesel prices, as has the cost of running freezer cabinets around the clock to keep perishables fit for consumption.

To my shame, I’ve never been the sort to keep too much of a keen eye on supermarket prices, but I’ve been making a point of being more prudent recently.

Inflation

I like chicken thighs and drumsticks, which have seen increases in the region of about 20%, and when even a pound of Kerrygold has gone up to €4.15, you know the game is up. I don’t care how many makey-up names Lidl and Aldi come up with, because I’m now looking at the bottom line, so if the butter is branded Ballygobackwards Farm and it’s 70c cheaper, that’s what’s going in my fridge.

Like many of you, I lived through the Seventies and Eighties, so it’s not exactly like inflation is a fresh concept for us to contemplate. The difference is that back then it was creeping inflation, a nagging drip-drip that lasted a decade. With hardly any inflation in the last decade, we were ill-equipped for this sudden shock, which has been so brutal we should be at least glad it’s one thing that won’t appear on the electricity bill.

This month, we get the last of the €200 subsidies for the foreseeable future – the Government seems to be banking on improving spring weather, and keeping its fingers crossed that the fall in wholesale energy prices can be passed on to consumers sooner rather than later, obviating the need for future subsidies entirely.

In the meantime, though, all we can do is nervously check our bills, because if another of those 500quid ones arrives in my inbox, the only people who’ll have to worry about it are my heirs, after I quietly expire from a heart attack.