Electricity bills are to rise by 17.5 per cent on August 1st, the Commission for Energy Regulation (CER) announced today.
The Commission said it had agreed to the price increase requested by the ESB adding it was as "a direct result of the sharp and consistent increase in international fuel prices over the past year". The Commission said it would examine prices again in early November to decide on prices in 2009.
Today’s interim increase follows news yesterday that the ESB was making a €300 million contribution to help offset electricity price for consumers next year. The company also revealed yesterday that it made profits of €432 million in 2007.
The CER sets household electricity prices every year. Rising oil, coal and gas prices have driven up the cost of generating electricity, which accounts for 70 per cent of the ESB's total spending in a given year.
“Against this background, it is regrettable but inevitable that consumer electricity prices will rise significantly in Ireland for 2008/09,” the CER said in a statement today.
It said it would deal with electricity prices in two phases and will review the situation later in the year based on market conditions at that time.
A proposed decision on this will be taken in early November next to apply from January, 1st 2009, the Commission said.
The Commission added that it was aware today’s increase would affect “fuel poor” customers in particular and “is in discussion with relevant parties to see how these price impacts can be further mitigated.”
The ESB said the price rise was "considerable" but "to be expected" because of escalating fuel costs.
"It is significantly less, however, than the figures for increases recently predicted," the company said in a statement.
The Director of the Small Firms Association (SFA), Patricia Callan, said today’s price increase was “completely unacceptable” to the small business community.
“Three weeks notice that a major input cost is going to increase by such a large amount is ridiculous”, said Ms Callan. “Is the energy regulator intent on putting more companies out of business and more employees on the dole?”
“Competitiveness is critical to the survival of all Irish companies and energy price is a key input indicator," she added.
