Electricity price may rise 9% in peak months

BUSINESSES AND consumers could face further electricity price rises of up to 9 per cent under a proposal being considered by the State’s energy industry watchdog.

Electricity suppliers, including ESB subsidiary Electric Ireland, Bord Gáis and Airtricity, recently increased their charges to both businesses and consumers, adding between €50 and €60 a year to the average household bill.

The Commission for Energy Regulation (CER) is now consulting with power plant operators on a technical issue relating to how they pass on charges for supplies of natural gas that they burn to generate electricity.

According to independent supplier Vayu, the changes being considered could add up to 9 per cent to the cost of electricity during the peak demand months in the winter and about 1 per cent when demand is at its lowest, during the summer.

The company’s head of regulation, Bryan Hennessy, said yesterday that the increase would hit businesses, particularly industries that employ large numbers of workers, and households if it were applied.

The consultation deals specifically with charges for short-term use of the natural gas network. Electricity companies have to book space on this system to ensure the natural gas supplies they need are shipped to them. The space can be booked on a yearly, monthly or daily basis. The daily, or short-term rate, is almost three times the yearly rate and is about twice what companies are charged for booking capacity a month in advance.

Power plant operators such as the ESB and Huntstown Power owner Energia did not comment yesterday. However, it is understood that industry players want the regulator to give them the green light to pass on these charges to customers.

The CER spokesman said the commission was investigating whether Huntstown has already begun passing on the charge.

Industry sources say that there is debate on whether or not the regulator can prevent companies from passing on the charge in the first place.

Recent changes in the energy market have left key sectors such as pharmaceutical manufacturers and food processors facing six-figure increases in their annual electricity bills. The end of a special rebate on electricity bills paid to large energy users and recently introduced extra network and public service charges are adding between 7-8 per cent to bills paid by organisations such as manufacturers and hospitals.