Businesses fear ESB price plan may push bills up 35%

AN ESB plan to change the system it uses for charging some business customers could drive up their bills by as much as 35 per cent, it was claimed yesterday.

As part of a consultation process, the State-owned electricity supplier has made a submission to the Commission for Energy Regulation (CER) asking that it be allowed change the basis on which it charges a large customer category called "low-voltage maximum demand".

The ESB wants to switch these customers, which include a wide range of small and medium-sized businesses, from a fixed-rate system to one that includes peak charges that are applied when general demand is high.

Energy consultancy McKinnon Clarke said yesterday that if the CER were to allow the ESB to go ahead with the proposal, it could result in increases of up to 35 per cent in some energy bills.

The system that now applies to these customers has two rate bands, one for day-time use and one for night-time.

The charging structure to which the ESB is proposing to move them has seven rate bands, some of which are tied to peak-time use, when general demand for power is high. This is the method used to charge high energy users such as heavy industries.

The ESB's submission states that this structure would make it easier for such customers to manage their energy demands and costs.

However, Sandra Quinn, an analyst with McKinnon Clarke's Irish office, said yesterday that this was not necessarily the case.

She pointed out that while it could be possible for a factory to shut down during peak demand between 5pm and 7pm, hotels, which fall into the low-voltage category, cannot do this as they are particularly busy during this period.

Business customers have the option of switching from the ESB to independent suppliers. However, most of these operators discount their prices against the State company's charges and use these as a benchmark. The industry generally regards low-voltage, maximum-demand users as low margin.

A CER spokesman said yesterday that as the proposal is part of a consultation, any interested parties can raise any issues that concern them in relation to it for the regulator to take on board before a decision is made.