independent

Monday 21 April 2014

Consumers 'forced to pay €160 extra' for electricity

Parents making expensive 'voluntary contributions'

HOUSEHOLDERS are paying €160 more for electricity than they should because of weak regulation, an energy expert claims.

The overcharging results from consumers being forced by regulators to fund the expansion and investments made by the ESB and Bord Gais, energy economist Paul Hunt will tell a conference in Galway today.

Some €3bn has been extracted from households in the past 11 years to fund expansion and investment by the ESB and Bord Gais, says Mr Hunt.

Household electricity bills would come down by €160 a year if the massive investments being made by the ESB were funded instead from the likes of pension funds, instead of consumers being forced to subsidise the semi-state companies.

Huge

Mr Hunt, who previously worked for Bord Gais, says consumers are being forced to stump up for the huge costs of upgrading the electricity networks every year.

"The bottom line is that if you remove the average €200m a year network overcharge from household bills, the average bill will be reduced by €160," he says.

The energy consultant says the big beneficiaries are the management and staff of ESB and Bord Gais, along with a small army of advisers and professionals like solicitors and consultants.

But Mr Hunt's analysis was flatly rejected last night by the energy regulator.

A spokesman for the Commission for Energy Regulation (CER) claims it is acting in the interests of households.

"We totally reject any assertion that we have not been operating in the interests of customers.

"Indeed, effective CER regulation has helped Ireland's electricity and gas prices fall since 2007 relative to the eurozone average."

However, energy bills are shooting up at the moment.

Difficult

Mr Hunt says getting household energy bills reduced will be really difficult.

Electricity prices have just gone up for around one million homeowners who are customers of ESB/Electric Ireland, and Airtricity customers are also facing a steep rise in charges.

The move by ESB/Electric Ireland to raise electricity prices by 5.9pc from the start of the month will see the average bill rise by €64 a year, to almost €1,200.

Bord Gais was allowed hike prices for domestic gas by 8.5pc by the regulator despite initially requesting a smaller rise.

Airtricity's electricity and gas prices are going up from Monday next.

Flogas has hiked its bills by €75 a year to close to €840 for domestic gas users, and bulk gas supplier Calor has increased the standing charge by 700pc to close to €200 a year.

Irish Independent

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