Electric Ireland hikes energy bills amid warnings of worse to come

Electric Ireland said it was left with no choice but to raise prices by almost 25% for both electricity and gas from May 1 as 'international gas prices are beyond our control'.

More than 1.2m households are facing energy bill hikes of up to €300 as the country's largest provider increases gas and electricity prices.

Amid warnings that worse could be yet to come, Electric Ireland customers will see their annual bills increase by an average of €300 for electricity and €220 for gas.

Last year saw 35 different energy price hikes and the early months of 2022 have brought no respite for hard-pressed customers, with Electric Ireland's increase coming just weeks after hikes from Bord Gáis Energy and Energia. 

The country’s largest energy supplier, which has 1.1m electricity customers and 145,000 gas customers, said it was left with no choice but to raise prices by almost 25% for both electricity and gas from 1 May as “international gas prices are beyond our control”.

Implications of war

It comes as the governor of the Central Bank warned that the increases seen in the price of energy and fuel have yet to reflect the full implications of the war in Ukraine or the fresh wave of Covid-19 cases.

The price rise from Electric Ireland comes after over 730,000 customers of Bord Gáis Energy were told they would be hit with hikes of 39% for gas and 27% for electricity earlier this month, adding €340 and €350 to their annual bills, respectively.

Last week, Energia also announced that its customers would see their average bills go up 15% from 25 April.

This latest rise from Electric Ireland comes on the back of a 9.3% rise in electricity and 7% in gas last November. 

The company advised customers struggling to pay their bills to engage with them on their options, and also pointed to support given by the likes of Mabs and St Vincent de Paul to families and individuals in difficulty.

All energy account holders in the country are set to receive €200 off their bills on foot of a Government scheme to help with the cost of living in the coming weeks. 

The first payments are expected in the coming days but some people will have to wait until May or June, depending on billing dates.

But this latest hike in prices will hit customers who have already faced numerous price hikes from their suppliers throughout 2021.

'A hard blow'

Daragh Cassidy, head of communications at Bonkers.ie, said this latest price rise was not unexpected but nevertheless comes as a hard blow to many families.

“To say these are unprecedented times for the energy sector is an understatement,” he said. 

Price hikes from all the other suppliers are likely to follow and more price hikes from Electric Ireland later in the year can’t be ruled out.

“Since October 2020, when prices began to rise, some suppliers have announced price hikes that have added almost €1,500 to households’ annual gas and electricity bills. We’re in a crisis.” 

Central Bank governor Gabriel Makhlouf yesterday told an Oireachtas Committee hearing that Ireland is facing the highest rate of inflation since late 2000, and he was aware people are feeling “these very real price increases”, in particular with their energy bills.

“The current rates of inflation are driven by higher global energy prices and supply bottlenecks, with some knock-on implications of the energy price rise for the prices of other consumer goods and services,” he said.

And it should be noted that these increases in official consumer prices for energy and fuel are yet to reflect in full the developments of recent weeks and the implications of the conflict in Ukraine.

Taoiseach Micheál Martin, speaking in the Dáil, also referenced the impact of the war in Ukraine on inflationary pressures. 

“The impact on low-income households is, of course, a particular concern for the Government,” he said.

“That is why we have taken targeted action to help alleviate the immediate pressure of energy costs. 

"The electricity credit of €200 will soon be paid to all consumer accounts at an overall cost of €400m. 

"There is also a lump sum payment of €125 for people on the fuel allowance, which benefits 372,000 households across the country."

He said the economic implications of the war in Ukraine are already being seen in increases in energy prices, food security issues, and in the agriculture sector. 

“And so we will, and we have responded sectorally to some of these areas, and we will have to continue to do that," said Mr Martin

"Over the next while, we will be targeting those most in need and those on lower incomes. And we have to target our responses in respect of government allocations and government funding."