Electric Ireland cuts rates for business customers

A third household energy credit is expected in March

Electric Ireland business customers can anticipate lower energy bills but households are set to struggle with soaring prices for at least another year.

The State-owned energy company, which has the largest share of electricity customers in Ireland, confirmed small- and medium-sized business customers in the Republic will see an average 10% decrease in their bills from the start of March.

The move could potentially encourage other operators to cut costs, according to an expert.

“I think all of the providers are watching what everybody else is doing,” said Dermott Jewell, policy adviser with the Consumers’ Association of Ireland.

The move comes as suppliers faced increasing pressure in recent weeks to cut prices following a drop in wholesale energy costs after a mild winter. A report by the Single Electricity Market Operator showed a 41% drop in wholesale gas prices in the final quarter of 2022 compared to Q3.

Pinergy was the first energy company in the Republic to cut costs for its customers. 

Earlier this month, the provider announced changes to its standard residential electricity prices from March 31 that would enable households to save €183 annually.

But business customers took priority for Electric Ireland when it came to reducing prices, said Mr Jewell.

“They looked at businesses probably being the best way of appeasing Government,” he said.

Many businesses have struggled to thrive with soaring energy bills, Retail Ireland, an arm of lobbying group Ibec, told the Irish Examiner recently.

Mr Jewell said residential customers were “just as much in trouble and just as much in need of any sort of easement of the costs” as businesses.

Electric Ireland said suppliers typically hedge energy costs in advance to secure costs for the upcoming year, leading to household customers waiting longer to see any impact on their bills.

“These forward hedge contracts can be for a period of up to 24 months and are entered into at different points in time and for different volumes,” the company said.

“It is very difficult to project the trajectory of residential electricity and gas prices,” it added.

The EU reduced its reliance on Russian gas following its invasion of Ukraine, which pumped up wholesale prices to multiples of their levels prior to the war, which eventually hit Irish energy consumers’ pockets.

In late December, Electric Ireland announced that it would forgo profit from its residential electricity business and gave a €50 credit to its residential electricity customers. 

Its hardship fund was also increased by €2m to €5m.

“These are not normal times so doing one thing to facilitate businesses makes no sense because all it does is offend the other side,” said Mr Jewell.

A third energy credit of €200 provided by the State is expected to be available to all household energy customers in March.