Consumers face 'very expensive winter' despite energy price cuts

Electric Ireland said its plans for an 8% drop in electricity prices and 7% drop in gas unit rates would lead to a combined annual reduction of €264.07 for the average dual-fuel customer.

More energy companies could drop their prices within days after Electric Ireland announced a cut to its gas and electricity rates on Monday — but households have been warned they still face sky-high prices as the coldest weather of the winter so far begins to bite.

Electric Ireland said its plans for an 8% drop in electricity prices and 7% drop in gas unit rates would lead to a combined annual reduction of €264.07 for the average dual-fuel customer.

The price reduction, set to take effect from March 1, comes after another recent price drop made by the company in November.

Between both reductions, Electric Ireland said it would save dual-fuel customers about €692.81 per year. However, these drops come after record price hikes in recent years, forcing the Government to provide relief to households across the country in the form of once-off energy credits.

Critics have said energy companies have also been slow to pass on reductions in the cost of wholesale gas and electricity, all while parent companies make huge profits.

Bonkers.ie head of communications Daragh Cassidy said the other energy firms may move to cut prices within a matter of days in response to this move from Electric Ireland.

“But even after today’s reduction, Electric Ireland’s second in just a few months, its electricity prices remain around 85% above where they were in 2020 before covid and then the war in Ukraine wreaked havoc with energy prices, while its gas prices are still over double previous levels.

Yes, prices are falling, but they’re falling from really high levels. So it’ll still be a very expensive winter to heat and light our homes. And of course, this price cut doesn’t come into effect until 1st March.

Mr Cassidy added a third price drop from Electric Ireland later in the year is likely, with wholesale gas and electricity prices continuing to fall. He said he expected the next drop to be in the region of 10% to 15%.

Tánaiste Micheál Martin welcomed Electric Ireland’s announcement on electricity price reduction but said he believed energy companies could do more and do it quicker.

“I’m conscious that there's been a lot of pressure on families over the last two years, in particular since the war in Ukraine and the consequential increase in energy prices, and of course, the post-covid period,” he said.

“People have been under pressure. I think it's a welcome move today that we have witnessed, but I think there is space for more as well."

Social Democrat TD Jennifer Whitmore said despite these price reductions, “we must not lose sight of the fact that these reductions are coming from a very high base and follow a succession of increases by the company”. 

She was also critical of the timing of the reductions from Electric Ireland, set to kick in in March.

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“It is telling that Electric Ireland announced its latest round of electricity and gas reductions on the coldest day of the year so far, yet the decreases won’t take effect until March 1," she said.

“Consumers need these price cuts now as winter bites and energy consumption is at its peak, not when the weather starts to improve in spring.”