Electricity bills to be reduced by just €6 after decade-long overcharging error

Between 2011 and 2021, domestic electricity customers were overcharged over €100m due to an error. Picture: Denis Minihane.

Domestic electricity customers will see a reduction of just €6 in their annual bill as planned tariff increases announced by the utilities regulator are to be offset with a refund for an overcharging error. 

The Commission for Regulation of Utilities (CRU) has announced that network charges for all customers over the next tariff year will increase by 12%. The tariff year begins at the start of October.

All electricity customers pay network charges through the bills they receive from their suppliers.

The level of these charges are calculated depending on what the requirements are for the necessary investment in and development of the electricity grid.

For the coming tariff year, EirGrid and ESB Networks have forecasted a transmission revenue requirement of €1.1bn — which is up 9% on last year. For the distribution, ESB Networks has forecasted a revenue requirement of €1.14bn — an increase of 15%. 

The combined impact of both network charge requirements would see an average increase of approximately €48 on a domestic customer bill for the 2023/2024 tariff year.

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However, due to an error in the tariff years between 2011/2021 and 2021/2021, which led to domestic customers being overcharged to the tune of €100.86m, customers will instead get a reduction in their bills. 

The error also meant that large energy users were undercharged by the same amount.

After the error was discovered the CRU undertook a full review of the options available and decided to correct the large energy user (LEU) rebalancing error by compensating domestic customers in full within this coming tariff year.

This compensation will be recovered from LEU customers over the next three-year period.

As a result, the €48 domestic bill increase will be offset by a €54 reduction following this rebalancing arrangement.