×
Independent

Electricity bills to rise by €120 in new shock

This article appeared as the lead on page 1 of the Irish Independent

Watchdog accuses Bord Gais of 'hoodwinking' customers

 

By Charlie Weston Personal Finance Editor
Monday July 11 2011
 
HUNDREDS of thousands of householders are facing a €300 hike in their annual energy bills, the Irish Independent has learned.
 
Bord Gais will this week announce it is pushing up the cost of its electricity by between 10pc and 14pc.
 
And in further pain for its residential customers, the energy supplier is also seeking permission to increase its gas prices by up to 28pc. This will mean an increase of €120 on the average family annual electricity bill and €200 on the annual gas bill.
 
Consumer watchdogs last night condemned the move to raise electricity prices, accusing the semi-state company of "hoodwinking" customers into switching from rival suppliers.
 
Hundreds of thousands of consumers changed over to Bord Gais for their electricity supply over the past two years after a high-profile advertising campaign urged householders to "make the big switch" on the promise of paying lower prices.
 
The hike in electricity prices will add around €120 to the average annual bill of €1,000 for a family. The higher price is to take effect in October.
 
Bord Gais has also asked the energy regulator for permission to push up its gas prices by up to 28pc.
 
An increase of this size would result in the annual average bill of €737 for a family going up by around €200 to close to €1,000. The company has more than half a million gas customers.
 
Bord Gais has to get permission for an increase in gas prices because of its dominant position in the gas market.
 
But it is free to push through a hike in electricity prices as it is only the second largest player in the market.
 
The move to hike electricity and gas prices -- the first in two years -- has been blamed on a sharp rise in wholesale prices of oil and gas on world markets. Wholesale gas prices are up 30pc in the past year.
 
The new pressure on households will come despite record numbers falling behind on their utility payments.
 
More than 430,000 households switched from ESB Electric Ireland since Bord Gais entered the electricity market a little over two years ago.
 
Cheaper
 
The Consumers' Association of Ireland (CAI) accused Bord Gais of "hoodwinking" people into switching based on a pledge that they would get cheaper electricity.
 
"People were promised a huge reduction in prices after being subjected to a hard sell. Now that is being taken away from them. They have been hoodwinked," CAI chairman Michael Kilcoyne said.
 
Other electricity suppliers, ESB Electric Ireland and Airtricity, said they had no "immediate plans" to hike their prices.
 
But they hinted at further increases after pointing out that wholesale prices of oil and gas, used to generate electricity, had gone up by 30pc in the past year.
 
Now, ESB Electric Ireland is offering discounts of up to 17pc to homeowners who sign up for gas and electricity supplies from it, according to David Kerr of comparison site Bonkers.ie. But it, too, is expected to raise electricity and gas prices.
 
Suppliers of gas to residential customers, Airtricity and Flogas, said they were "reviewing" prices.
 
Moves to increase household utility bills are likely to push more consumers into arrears. In excess of 100,000 Bord Gais customers are in arrears on their gas and electricity bills, while around 150,000 ESB Electric Ireland customers are behind on their electricity bills.
 
A spokesman for Bord Gais last night admitted that the company had applied for permission to raise gas prices when asked about the imminent electricity price rise announcement.
 
The regulator will publish proposals on the gas-price hike by the end of this month.
 
- Charlie Weston Personal Finance Editor
 
Irish Independent

By using this website, you agree to be bound by our Terms of Use and consent to the use of cookies in accordance with our Cookie Policy.