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Wednesday 20 February 2019

Struggling families face another energy bills rise

Aideen Sheehan Consumer Correspondent

FAMILIES are facing energy price hikes of €120 a year, with gas and electricity bills set to soar this autumn.

Bord Gais has applied for a 7pc increase in its gas tariffs in a move which would add €60 a year to the average gas bill.

And a leading energy expert has predicted that electricity tariffs will also rise by around 5pc if gas prices increase – because natural gas is one of the major fuels used in electricity generation.

That would add close to €60 to the average annual electricity bill, bringing total extra energy costs to €120 a year for the typical household – or over €2,250 in total.

The Bord Gais price increase would be the third major gas price hike in two years and would mean that customers are paying €300 more a year for their gas than they were paying in 2011.

If this was to be followed by an electricity hike, families could end up paying €500 more a year for energy than they were two years ago – at a time when incomes are squeezed and Central Statistics Office data shows most are already struggling to pay their bills.

The Consumers' Association of Ireland warned that an increase in the price of gas would be an "impossible blow" for struggling households.

Chief executive Dermott Jewell said: "So many families are in difficulty already that the regulator simply cannot allow another increase like this and must send Bord Gais away to find savings internally in its own costs instead."

With health-insurance premiums soaring, the new household charge, water charges looming and another tough Budget on the way, consumers simply could not take a price increase like this, warned Mr Jewell.

Bord Gais has asked the Commission for Energy Regulation to approve a 7.2pc increase in its residential gas tariffs, which would apply from October 1.

The semi-state company is citing higher transportation costs for gas imported via Britain as the main reason for the proposed increase, noting that these costs had risen by around 38pc.

Energy expert Simon Moynihan, of the comparison website bonkers.ie, said customers of other gas companies could also expect price hikes.

He explained that although rival companies were free to set their own tariffs, in practice these were always closely linked to the Bord Gais rates.

"There will be no escape from this. You can guarantee that they will all increase their prices and blame Bord Gais for it," said Mr Moynihan.

Furthermore, electricity prices were also certain to rise as a result because gas accounts for over 50pc of Irish electricity generation.

"These things are very predictable, so you can be absolutely certain that electricity prices will rise. The only question is by what percentage but it will probably be 4-5pc," he said.

Currently, the average household pays €961 a year for gas and the proposed 7pc increase on unit rates would beef that up to €1,020.

The average annual electricity bill comes to €1,179, which would rise to €1,236 if prices were raised by 5pc.

Eoin Clarke, head of price-comparison and switching website uSwitch.ie, said the move by Bord Gais to raise its rates was a serious blow for cash-strapped consumers as research had shown that they were already being forced to turn off the heat.

"Last winter, over two-thirds of households (69pc) rationed their energy use, while over two in five (42pc) occasionally went without heating.

"Additionally, over one in three households (36pc) regularly went without heating last winter to keep their costs down," he said.

However, there were savings to be made, said Mr Clarke, with companies offering savings off standard gas tariffs if customers signed up for direct debit, online billing or dual fuel (both gas and electricity).

SAVINGS

Bord Gais said that a recent report into the energy market by Vassa ETT showed that Irish residential gas prices compared favourably with our European counterparts, coming in fourth-lowest out of 14 countries surveyed.

"Subsequent to the proposed increase of 7.22pc, Ireland's regulated tariff will remain below the European average," said Bord Gais in its submission.

The Commission for Energy Regulation has invited interested parties to comment on the proposal by August 21, before it decides whether to approve the price increase.

However, last year it gave Bord Gais an even bigger price rise than it had asked for, approving an 8.5pc hike, instead of the 7.5pc that had been sought.

Irish Independent

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