House prices set to rise due to ESB fee hike

HOUSE prices are set to rise again after the ESB got approval for a 67% increase in charges for first-time connections to the electricity network.

The charges for first-time connections for new commercial and industrial users as well as for one-off houses are also to rise by 27%.

All the new charges will come into effect from August 1.

The increases have been strongly criticised by the Construction Industry Federation (CIF) and the Irish Home Builders Association (IHBA) which claimed they were “ill-timed and ill-advised”.

For instance, a resident of a new home in a large housing estate will now have to pay around €972 for an electricity connection. It represents an increase of almost €400 on the existing charge.

The CER said its decision to improve the new charges was based on its determination that customers should contribute 50% of the attributable connection cost from 2006 compared to the existing rate of 37% by domestic users and 41% by commercial and industrial users.

However, a CER spokesman said the approved increases would not result in any additional revenue for ESB Networks.

“It’s just a measure to see customers pay more upfront to the cost of connection to the electricity network,” said the spokesman.

He claimed the new charges would prove “more equitable” for all electricity users.

All consumers currently bear some of the cost of first-time connections through the standing charge on two-monthly bills which averages just over e100 per year.

Although the new charges should result in a lowering of the standing charge, industry sources claimed the reduction would be “negligible.”

The CER explained that 5% of the increases was due to inflation, while the remainder was due to recovering connection and to underground working costs.

It is estimated that ESB Networks, the division which is responsible for connecting users to the ESB network, will provide electricity to 100,000 new housing and industrial units this year.

In a joint submission made to the Energy Commissioners, the CIF and IHBA complained that the increased charges cannot be justified.

“The current quality of service provided by ESB Networks is nothing short of appalling and is costing the industry massive amounts of money in delays,” said an IHBA spokesperson.

Despite the new charges, an ESB spokesperson said the company was still not recouping the full cost of connecting new units to the national network.