Airtricity hikes prices after tripling profits
BUMPER profits by Ireland's energy companies were in the spotlight once again yesterday after it emerged that Airtricity hiked costs for consumers just months after tripling its annual profits.
Accounts just filed by the energy company show it more than tripled its 2013 pre-tax profits to €45.8m. The British-owned firm attributed the profit surge to lower energy costs and an increase in customers as well as fewer acquisition costs. But just months after the financial year ended, Airtricity hiked up the cost of energy for those same customers. Electricity prices were increased by 3.5pc from November 1 and gas prices jumped by 2pc from October 1. It also hiked prices in 2012, adding 4.7pc on its electricity prices and an 8pc increase on gas prices in October 2012.
"I am very surprised at those kinds of profits, given that Airtricity said it couldn't absorb outside costs when it became the first electricity provider to hike prices this year," Dermot Jewell, who is head of the Consumers' Association Ireland, said last night. "Irish energy bills are now so high that energy providers themselves have identified Ireland as a difficult country for bad debts and getting people to pay bills. Clearly these bills now outstrip people's ability to pay."
Irish electricity prices are among the highest in the western world, adding to the cost of living and cost of doing business here.
Airtricity began life in 1997 as Eirtricity and now has 625,000 domestic and commercial gas and electricity customers. The November hike alone affected an estimated 380,000 consumers, costing them an extra €39 each a year, according to price comparison site Uswitch.ie.
Airtricity blamed this on the rising cost of using energy networks to distribute electricity to customers' homes, along with the increasing cost of buying energy on the global market.
But its accounts show that Airtricity's cost of sales last year of €797m represented 90pc of revenues, compared to cost of sales of €641m representing 91.5pc of income in 2012. Meanwhile, operating expenses fell from €44.35m to €41.25m, while its cash pile increased from €16.6m to €24.9m. Staff numbers directly employed by the firm rose to 334 from 216.
The company did not respond when contacted for comment.
Unlike the ESB, Airtricity can raise its prices whenever it wants. The ESB is more closely regulated and each price rise must be approved by the Commission for Energy Regulation.
"We know energy companies have shareholders to answer to -- all we ask is that they're fair and pass on savings to their customer base," said Eoin Clarke, country manager of Uswitch.ie. "Some households are already performing a juggling act to balance budgets and keep their heads above water."
He estimates that the average household energy bill is now €2,140 a year. Over a third of households, he said, regularly went without heating last winter to keep energy costs down.