Annual electricity bills to rise by €90 a year

Customers' pockets will be hit hard by a hike in price of electricity, along with a 130% increase in the Public Service Obligation levy.

Electricity bills for over one million Irish customers are to rise by €90 annually.

The price hike is due to an increase in the price rate of electricity from Electric Ireland and Prepaypower, coupled with a 130% increase in the Public Service Obligation (PSO) levy that came into effect yesterday.

Last month, Electric Ireland announced that the average residential electricity bill will increase by 3.4%, equating to €35 per year on average. The announcement came just four months after the company reduced energy and gas bills by €100 a year due to the falling costs of fuel at that time. The company cited the electricity system and market costs as the reason behind the recently increased charges.

The situation was mirrored by Prepaypower. The electricity company reduced charges by 2.5% in April but announced a price hike of 2.9% earlier this month. The prices, which add €33 on average per year onto the bill, come into effect on October 4.

This, coupled with the 130% rise in the PSO levy will see customers' pockets hit hard.

The levy, which has stayed at the same price since its introduction 10 years ago, will jump to €88.80 per year, €50 more expensive than before. Up until this year, the money raised from the levy was used to subsidise the cost of burning peat. 2020/21 will be the first year in which the money raised will go solely to producing renewable electricity.

In early September, the issue of the growing cost of electricity was raised in the Dáil by Sinn Féin leader, Mary Lou McDonald. In her address, she said: "Those working from home have already seen their energy costs increase as a result. Ordinary people have also faced price hikes by insurance companies and banks. The last thing people can afford now is higher electricity bills as we move into winter."

Taoiseach Micheál Martin told the Dáil he will engage with Electric Ireland over the increased rates, though no changes have been made.

Comparison and switching sites are urging customers to swap providers to save money.

Darragh Cassidy, head of Communications and PR at bonkers.ie said businesses rarely reward loyalty with cheaper prices. “That’s because energy companies all offer really great introductory rates to those who switch to them. However, these discounted rates usually expire after 12 months.

“Discounts of over 40% are now available to those who switch, meaning you could save yourself almost €500 a year right now just by switching. However, if you live in a poorly insulated home or in a home with more than three bedrooms, your savings are likely to be even more,” he added.