Electricity price rise signals 'black day' for business

ISME has condemned the Commission for Energy Regulation (CER) for sanctioning further price increases in electricity and gas, calling the move a disgrace and a further demonstration of regulatory failure.

The Association has called for the immediate dissolution of this ineffectual institution.

ISME has said the CER has constantly and sheepishly agreed to the demands of both the ESB and An Bord Gais, at a massive cost to the wider business community and the public in general.

Commenting on the increases, ISME Chief Executive, Mark Fielding said: "The CER's announcement represents a 'black day' for small businesses throughout the country, with the latest increases resulting in a significant hike in energy costs representing a 39% increase for electricity in the last three years alone.

"This is a double whammy for many business users when the 16% increase in Gas is taken into account. This depressing scenario will lead to many companies having to review their cost structures with the inevitable consequences, including price hikes and job losses.

"Unfortunately with the continuing operation of the CER, energy prices will continue to rise because there has been an abject failure to introduce aggressive competition or effective regulatory reform.

"We must be the laughing stock of the economic world to follow blindly the strategy, which indicated that in order to bring down prices we must have competition; but in order to have competition it must be profitable for entrants to the market, therefore to entice new entrants we must increase prices.

"It is patently obvious that the CER has failed to adequately introduce competition and has failed to control the price of energy to the consumer.

"In the three years since the inception of the Regulator, Irish electricity costs have gone from below the EU average to be the fourth highest, ranking only behind Cyprus, Germany and Belgium. This is an unacceptable situation and seriously questions the role and remit of the Regulator's Office".

In conclusion Fielding said: “It is ironic that only a matter of weeks after the Enterprise Strategy Group report was launched, businesses are once again being faced with exorbitant increases that will completely undermine competitiveness, making many of the recommendations contained in the report redundant.

"If we truly want to develop an enterprise culture in Ireland we need to tackle the high cost structure in which businesses operate, much of it Government influenced.

"A bright start would be to get rid of the CER Office and its flawed and fallible influence on energy prices".