LAST UPDATE | 1 Sep 2022

THE TAOISEACH HAS said that energy prices are “off the Richter scale” compared to last year as Electric Ireland announced another hike, its third increase in five months.

The provider announced plans to increase residential electricity bills by 26.7% and gas bills by 37.5% with effect from 1 October 2022.

The company said the increases equate to €37.20 per month on the average residential electricity bill and €42.99 per month on the average residential gas bill, based on the estimated annual bill as defined by the Commission for Regulation of Utilities (CRU).

The CRU have also announced that due to new tariffs on gas transmission, there will be a 1.41% increase in customers gas bills from 1 October 2021. This is equal to €16.

It followed similar recent hikes from other suppliers amid growing concerns about energy costs and security over the winter.

Taoiseach Micheál Martin said the latest increases reflects the “broader exponential rise in energy prices”.

Speaking to reporters this afternoon, Martin said that there have been “dramatic, unprecedented increases in pricing” on the energy wholesale market.

Energy ministers from around the European Union are due in Brussels next week for an emergency meeting.

“The President of the Commission [Ursula von der Leyen] has informed me that they would be bringing forward emergency provisions to try to deal with the market right now,” the Taoiseach said.

“That will perhaps be the link between the price of gas and the wider price and the need to do something quickly in respect of that, and then a more structured reform of the market over the next 12 months,” he said.

“From a government perspective, we will use the Budget and also, in tandem with the Budget, the cost of living package to alleviate pressures on households. We also have to look at the impact on businesses in terms of jobs, retention of jobs.

We will also be launching a demand reduction approach – in other words, energy efficiency all round and all of us will have to see what we can do to reduce our energy consumption, because it is very costly now at an individual level and at a societal level.”

Finance Minister Paschal Donohoe echoed the Taoiseach, telling reporters this afternoon that measures to help tackle the rising cost of living would be at the “heart” of the budget.

However, when asked if he would consider implementing energy price caps in Ireland, he said that he did not believe a cap would be implemented effectively in Ireland, due to the size of the economy.

“If price caps are being brought in, the most effective way they can be brought in is at a European wide level or even through heightened forms of international cooperation,” Donohoe said.

“I have not been convinced that we would be able to implement a price cut in an economy of our size without quickly creating other problems for ourselves.”

On a windfall tax, Donohoe said that he and the Government would be considering it, but the potential impacts of such a tax would need to be examined.

The Taoiseach said the idea of not changing the clocks in October to reduce some energy pressure in the evenings – a suggestion that has been floated – is not being considered specifically at the moment but that “the big impact we can have is on our energy consumption, how we can consume energy over the coming months”.

“We can alleviate pressures to some degree from a budgetary perspective but given the exponential growth at the moment and forecast into winter and early next year, clearly there has to be a wider intervention in the market to bring prices back down.

“I am heartened by the fact that at a European level, storage levels are over the 80% that was called for by the Commission and that is having a dampening effect at the moment in terms of prices, but relative to where we were last year, they’re still off the Richter scale.”

In a statement, Electric Ireland Executive Director Pat Fenlon said: “This continues to be a very challenging time for customers, and an unprecedented time in the energy industry with increases to wholesale gas prices in excess of 700% over the last 12 months and 200% since June 2022 alone.

“It is with considerable reluctance that we are increasing electricity and gas prices again for our customers, which is necessary given the continuing increases in wholesale energy prices, particularly gas.

“To put that into context, this time last year wholesale gas prices for winter were circa. GBP£1.15 per therm, and as of last week, this winter’s prices were circa. GBP£7.70 per therm.”

On 1 July the company announced increases in both electricity and gas prices citing effects from the war in Ukraine.

At that time, electricity prices were increased by 10.9%, and gas rose 29.2%.

The first increase kicked in on 1 May – at that time electricty costs went up 20%.

With reporting by Lauren Boland and Tadgh McNally