Household ESB bills to rise by 13.25%

ESB bills will go up from January, after the Electricity Regulator approved a 13.25% increase yesterday.

The new charges will add 12 to the average 90 two-monthly, household bill.

The Commission for Energy Regulation has also sanctioned increases ranging from 3.5% to 8.4% for business and industrial users.

The Consumers’ Association of Ireland said the new charges came as “a kick in the teeth” because of ESB’s monopoly on domestic users.

The new prices will come into effect in January 2003. Consumers will notice the new charges in their March bills.

It is expected the price rise will add 0.2% of the inflation rate.

It is the second year in a row that electricity prices for domestic users have risen sharply, following a 9% increase last January.

Electricity Regulator, Tom Reeves said further large increases next year could not be ruled out. He justified the new charges on the basis that household electricity prices have not reflected the true cost of supply for several years.

“The process of moving towards truly cost reflective tariffs began last year and this latest increase for domestic consumers means they are now closer to reflecting their true cost,” said Mr Reeves.

Business groups have continuously complained that they have been cross-subsidising domestic users who up to now enjoyed the third cheapest electricity prices in the EU.

Last night, IBEC warned that the new tariffs would place further pressure on the competitiveness of Irish businesses. However, Mr Reeves said the increases were necessary to allow for upgrading of the electricity network to help Ireland remain a competitive location for foreign investment, following years of under-investment.

It is believed that the new prices will bring Irish domestic electricity prices in line with the EU average.

An ESB spokesperson said electricity prices would still be 9% cheaper than those in Northern Ireland after the new charges were introduced.

Reacting to the latest electricity increases, The Consumers’ Association of Ireland said the increases are come as “a significant and overpowering blow to the household budget of every consumer”.

“Already burdened with far too may double-digit increases over recent months consumers are now handed another take-it-or-leave-it price hike without any concern for their problem of affordability or choice,” said CAI chief executive, Dermot Jewell.