Government is urged to intervene to force energy price cuts for consumers as wholesale costs crash
The Cabinet has been called on to intervene to force energy companies to cut their prices for consumers after it emerged that wholesale energy costs continue to collapse.
Latest figures from the Central Statistics Office (CSO) show that wholesale electricity costs dived by 42.5pc in the year to April.
The Consumers’ Association of Ireland (CAI) responded by saying the time for excuses from energy firms was over, and urged the Government to force price cuts.
Energy firms claim they are locked in to long-term deals for the supply of wholesale gas and electricity and until the contracts unwind, they are unable to reduce prices for households.
The CSO said wholesale electricity prices fell by 13.5pc in the month to April and were 42.5pc lower last month when compared with April last year.
CAI chairman Michael Kilcoyne said: “The time for excuses is over. It is time we saw a cut in consumer prices.”
He said prices were high for consumers, and Vat was adding hugely to the cost of electricity for consumers.
A recent report found that the price of electricity in Ireland is the highest in Europe.
The unit price for electricity is almost double the European average, according to the Household Energy Price Index, which was commissioned by the Austrian and Hungarian energy regulators.
The annual cost of electricity has doubled for Irish households in the last two years, to around €2,000.
Mr Kilcoyne acknowledged that consumer prices are not regulated in this country, but he said it was time to reconsider this situation.
“This is so serious that the Cabinet needs to intervene because consumers are being fleeced on energy costs,” he said. “If energy companies made bad deals, by locking into poor-value futures contracts, then that is their problem. Consumers should not be paying the price for that.”
Plans for a windfall tax on electricity generators were too late, Mr Kilcoyne added.
DCU economics professor Edgar Morgenroth questioned why the energy regulator, the Commission for Regulation of Utilities (CRU), was not doing more to provide transparency on wholesale costs of providers, and asking why consumer prices were not falling.
“I would expect retail electricity prices to fall as some, or perhaps even most, of the futures contracts for [wholesale] gas that were bought last year must now largely be finished,” he said.
Daragh Cassidy of price-comparison site Bonkers.ie said wholesale electricity prices continue to fall, but still remain at very high levels. “We’ll need to see a further and sustained reduction in the price of energy on wholesale markets before we can talk of smaller bills for consumers
,” he said.
Asked when it was going to cut its prices, Electric Ireland, which is the largest electricity supplier in the State, said it has not increased its residential prices since October.
It insisted it offers the lowest prices for consumers in the country, and said it did not make any profit in its residential electricity business for 2022. “While forward wholesale prices have fallen in recent months, particularly so since their peak in autumn 2022, they are currently in the region of 300pc higher than in 2020,” Electric Ireland said.
The CRU said it expects consumer prices to fall by the end of the year, and it was closely monitoring wholesale and consumer prices.