ESB connection charge rises 200 euro

CONSUMERS are paying an extra 200 euro to connect a new house to the national electricity grid, it has emerged.

The ESB has hiked the charge for a standard electricity connection by more than 21% which puts the cost of connecting a new house to the grid at 1,128 euro. The same service in May cost 928 euro.

Chairman of the Consumers' Association of Ireland Michael Kilcoyne described the increase as "outrageous" and warned it was going to further contribute to inflation pressures.

An ESB spokesperson, however, defended the price hike and said the increase was needed to cover the natural inflation of materials and labour costs over the past five years.

"We would say if you put it in the context of house price inflation it's considerably smaller. It also reflects an increase in standards of connection.

"Technology has changed in the past four years and connection methods would have been more costly," the spokesperson added. The Commission for Electricity Regulation, which determined this newest price rise, pointed out there had been no increase in the standard connection charge since 1997, while the cost of wages and materials had gone up.

"I don't believe this Government is in any way serious about sorting out inflation," Mr Kilcoyne said.

He said the CAI was horrified that a further 15% increase in electricity charges is being considered and said he would be even more horrified if the Government sanctioned the increase: "It's been a bad week for consumers but, worse than that, the price increases are in areas that are under direct Government control."

Meanwhile, a new study has found that electricity prices in Ireland are among the most uncompetitive in Europe, even without the proposed 15% increase the ESB is seeking from next January.

Commissioner for Electricity Regulation Tom Reeves is to make a final decision on the rise in September. The study, by the National Competitiveness Council of Forfás, found that Ireland ranked 11th of 15 countries for small industrial users, and 8th for large users.

Employers group IBEC says the Forfás study indicates the proposed 15% rise would further damage Ireland's competitiveness. The group met Mr Reeves last week to oppose the increase.

A 15% rise would increase the average two-monthly household bill from 88 to 103.

Last year, ESB charges went up by 9% - twice the level of inflation.