ELECTRIC IRELAND IS reducing bills for businesses from the start of March, the company has confirmed.
An average decrease of 10% is set to take effect on electricity bills for small and medium enterprises from Wednesday.
However, no similar cut has been confirmed for its household customers.
A spokesperson for Electric Ireland, in a statement to The Journal, said it intends to keep its prices under review and that reductions in wholesale costs can take some time to have a knock-on effect for residential customers.
Energy companies have faced scrutiny over the last year as a combination of Russia’s war on Ukraine and other global factors, such as the fallout of the Covid-19 pandemic and Brexit, saw gas and electricity prices rise.
Many homes, businesses and farms in Ireland experienced steep increases in their bills in recent months compared to previous years, forcing the government to introduce additional social welfare payments and electricity credits in its annual Budget and more recently in a cost-of-living package.
However, some major energy firms have simultaneously reported large profits.
Wholesale electricity prices have begun to fall, according to figures from the Central Statistics Office, dropping by 41.4% in January 2023 compared to December and 19.5% year-on-year.
Last week, Pinergy announced a cut to its standard residential electricities prices from 31 March, which it said would result in a 7.1% decrease on average, or around €183 annually.
Electric Ireland has now confirmed a decrease for its SME customers, though it has not made a similar move for the residential sector.
The company asserted in its statement that wholesale market prices remain high despite the falls in recent months and energy suppliers “typically hedge energy costs in advance to secure costs for the upcoming year, so any increases or decreases in the wholesale market can take some time to feed into retail prices seen by residential customers”.
“The lag between movements in the wholesale market and movements in retail prices is a function of both the rate of change in the wholesale market, and the tenure of forward hedging contracts for electricity and gas,” it said.
These forward hedge contracts can be for a period of up to two years and are commenced at various times for different volumes.
A combination of historical and more contemporary contracts, along with current and projected wholesale prices, are used to determine residential prices, the company said.
“For this reason it is very difficult to project the trajectory of residential electricity and gas prices.”
“Electric Ireland will continue to keep its prices under constant review, and is committed to providing customers with the best value possible across a broad range of products. As of 1 February 2023, Electric Ireland offers the lowest Estimated Annual Bill for electricity on the market.”
Susanne Rogers, Research & Policy Analyst, Social Justice Ireland, told The Journal that the organisation appreciates that energy costs have risen sharply for every user, commercial and household over the last 12 months, and that Electric Ireland announced last December that it intended to forgo profits from its residential electricity business and apply a €50 credit to all existing customers bills.
“However, we see a cost saving measure applied to one section of their customer base and not the other at a time when many households, especially those on low or fixed incomes are really struggling to manage,” she commented.
“The moratorium on disconnections for domestic customers has now been extended from 28 February until 31 March 2023. Those who have arrears on their bills and are finding it difficult to bring down their balance, face into the reality of being cut off.
“We have to remember that a household with utility arrears may also be struggling to deal with increasing housing and food costs. Dealing with an arrears balance becomes easier when the cost of current usage drops.
“A reduction in tariffs for household consumers as we start to come into the brighter, warmer summer months would alleviate some of that burden.”
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