ESB to get green light for 8% price increase

THE Commission for Energy Regulation (CER) is today expected to give the green light for the ESB to increase prices by 8%.

The regulator has been studying a submission by the ESB for a price increase, its fourth in four years, for several weeks.

It is understood that it will accede to the demand by the State-owned company for an immediate rise of 8% and a further 4.5% rise next January - the latter increase will not be sanctioned just yet. The full 12.5% increase will add around €77 to the cost of the average household electricity bill.

The ESB said it must seek a rise to offset its rising fuel costs as it is facing pressure from the continued strength of the cost of oil. Last year the company made profits of almost €250 million on sale of €2.4 billion.

Business groups have reacted angrily to the prospect of price hikes, saying it will damage the economy by adding to the costs of businesses.

IBEC said yesterday that it is concerned that the model of market liberalisation in the Irish energy market is not working.

“The sector has seen limited new entry into power generation and limited competition at the supply- end in both gas and electricity markets.

“However, prices continue to rise at unprecedented levels, with consequential impacts on (inflation), competitiveness and employment. It is imperative the CER, which has the power to manage and shape energy tariffs, does so in a way that promotes competitiveness and private-sector job creation,” the group said.

According to some estimates the ESB has received the equivalent of a 37% price rise in the past three years and further rises can be expected.

Consumers and businesses could be hit twice as the regulator, Tom Reeves, is also expected to grant a price rise to Bord Gais. It got a 9.5% increase last year, and further increases of this order are expected as it too faces higher input costs.