ESB thought to be seeking further price hikes

CONSUMER and business representatives have reacted with alarm to news that the ESB is seeking a further hike in its charges.

If a new increase is approved by the independent Commission for Electricity Regulation (CER), it would mean electricity costs for domestic and business customers would have risen by over 20% in just three years.

Households in particular would feel the pinch, having seen the cost of food, education, health services, transport and gas all rise in the past year.

The Consumers’ Association of Ireland said it would be seeking an immediate meeting with the CER to discuss the ESB’s requested hike.

“Affordability is a key factor for consumers. Taken on their own, the price increases being sought by the ESB might be affordable, but combined with the increases in other goods and services for consumers, they’re not,” said chief executive Dermot Jewell.

Meanwhile, Small Firms Association director Pat Delaney said that any increases would be bad news for many businesses.

He insisted the business sector should “not bear the brunt” if higher tariffs were imposed, while stressing that it would also be damaging to up prices for domestic users, given Ireland’s ongoing efforts to combat inflation.

ESB prices rose by an average of 9.85% last year and 8.6% the year before.

It was reported yesterday that the company was now seeking an additional 5% increase, but sources said the hike sought “would be in line with inflation”.

The ESB refused to confirm yesterday that it was seeking increases.

“We submit all our costings to the CER and the regulator makes a determination on those,” spokesperson Kevin MacDermott said. Any suggestion of an increase, he added, was pure speculation.

“The CER published a timetable of tariff examinations, and it will be the end of August or September when the regulator would intend to publish indicative tariff increases,” he said.

Such increases, if implemented, would come into effect from January 1. They would add to the considerable costs for various goods and services that both consumers and businesses already face.

The latest Consumer Price Index figures showed that education costs had risen by 9.9% since June 2002, health costs by 7.7%, restaurant and hotel costs by 6.5%, and miscellaneous goods and services by 5.9%.

The last 12 months have also seen increases in phone-line rental costs and domestic gas bills, while the VHI is seeking to increase its premiums by 8.5% from September.

The business sector, meanwhile, has been hit by increasing salary and insurance costs.

The Irish Small and Medium-sized Enterprises Association (ISME) told an Oireachtas committee recently that insurance costs for its members had risen by 53% on average in 2003 alone.