Consumers face 'significant' rise in ESB bills

CONSUMERS face significantly higher ESB bills because of the surge in electricity production costs.

The company, which publishes its annual report today, is expected to seek a significant increase from the energy regulator.

The increase will affect domestic and business consumers who have already been hit by the recent surge in the price of petrol, coal and bottled gas.

According to a company source, the ESB had been hoping to seek only a modest rise in charges.

"The company would have been confident of seeking a much smaller increase," said the source. "But the soaring cost of oil recently has changed everything. The price of oil on the international market is now at its highest in 23 years and it is inevitable that customers will eventually have to end up paying for that. We are not immune from the implications of world trends."

The ESB is expected to apply within the next week to the Commission for Energy Regulation for a substantial increase in the rates it charges customers. The energy regulator, Tom Reeves, has the authority to grant or refuse such a request.

However, a spokesman for the commission said yesterday no application had yet been lodged. The ESB has until May 31 to register an application for an increase.

The ESB is particularly concerned at the growing price of bulk oil on the international market. The price of a barrel of crude oil now stands at $40 a barrel, the highest since before the first Gulf War. The price of fuel represents about a quarter of the cost of electricity generation.

The ESB also faces rising capital expenditure and maintenance costs in its bid to improve efficiency.

It also faces fines of up to €12 million being imposed by the energy regulator if power availability does not improve from its current low level.

The decision to grant a price increase will not be made until September at the earliest and will not come into effect until next January, a spokesperson for the Energy Commission said.

"The way the process works is that the ESB needs to have documents in support of an increase with us by May 31. The commission then reviews those documents and issues a decision by the second week in September," said the spokesperson

Bord Gais is also expected to seek an increase in charges. However, it is not expected to be anything like that sought by the ESB.