Electric Ireland is to cut prices for both its domestic electricity and gas in a move which could save some of its 1.1 million customers close to €300 annually.
It is its second price reduction in four months and will see residential electricity prices fall by 8 per cent and gas prices fall by 7 per cent from the beginning of March.
The decreases, in both the unit rate and standing charge will amount to a monthly saving of €13.73 on the average electricity bill and €9.27 on the average gas bill.
When spread over the course of a year Electric Ireland’s residential electricity customers will save an average of just under €153 while its residential gas customers will save an average of over €111.
For customers who get both electricity and gas from the provider, the combined annual reduction with average €264.
A company spokesman said that from March, its Estimated Annual Bill (EAB) will be lower than any other Standard Variable Electricity Tariff EAB currently available or announced for the market.
The announcement comes less than two months after the last decrease kicked in and when the two are added together, it will amount to a cumulative reduction of 17.2 per cent in electricity prices and 18.2 per cent in gas or an annual saving of €365 and €328 on average electricity and gas bills respectively.
“We are acutely aware of the pressure many of our customers continue to experience due to the impact of international events and the energy crisis over the last two years,” said Electric Ireland’s executive director Pat Fenlon.
“We are determined to offer the best value in the energy market and help our customers on the journey towards Net Zero by providing products and services which help them reduce their energy consumption and save money.
He said that since the winter of 2020, Electric Ireland had committed over €63 million to support customer including €55 million returned by foregoing profits in 2022 as well as a €5 million ‘Electric Ireland Hardship Fund’, “which will continue to help those customers having difficulties paying their energy bills again this winter”.
Electric Ireland is the second of the State’s largest providers to announce a price cut in recent weeks and the move is likely to put pressure on others to follow suit, said Darragh Cassidy, head communications at Bonkers.ie. “It’s also welcome that Electric Ireland has cut its standing charges again,” he said. “These were increased hugely by all suppliers during the crisis. No one can avoid them, no matter how little energy they use, so it’s good to see Electric Ireland begin to reverse some of the previous hikes.”
However, Mr Cassidy said that even with the latest round of cuts, electricity prices remain around 85 per cent higher than they were before Covid and the Russian invasion of Ukraine in February 2022.
Separately, SSE Airtricity said in December it would be cutting prices from the beginning of next month, the second time it has reduced the cost of gas and electricity in three months.
Its new prices will see electricity costs fall by almost 13 per cent while gas prices will be cut by 11.5 per cent 1st. The company’s standing charges remains unchanged. The cuts will save the average household around €210 a year on their electricity bills, and €150 year on gas.
Meanwhile, Minister for Finance Michael McGrath has said he expects other energy providers to soon also announce price cuts.
“I would expect we will see further announcements in the very short term by other energy providers in the Irish market who will want to protect their market share,” he told reporters on the sidelines of a Eurogroup meeting of finance ministers in Brussels.
“The normal competitive forces should help ensure that Irish households are benefitting from the reductions we have experienced in the wholesale markets.”
Mr McGrath had previously called on energy providers not to delay in passing on reductions in prices to consumers that they were experiencing in wholesale markets, where prices have plunged over the past year.
Finance ministers discussed the economic outlook for 2024 and subdued economic growth in the EU amid an ongoing war in Ukraine and a slowdown of the economy in China that has reduced demands for European exports.
Eurogroup President and Minister for Public Expenditure and Reform Paschal Donohoe said he expected to see economic growth of 1 per cent this year across the entire European Union.
“While that’s a lower rate of growth than I otherwise would like to see, it’s still growth,” Mr Donohoe told reporters. “Given all the issues that are very specific to Europe, it is a strong economic performance.”
Ministers also discussed the potential risks to the economy from attacks on ships in the Red Sea by Houthi, who say they are acting in solidarity with Palestinians in the Gaza Strip as they undergo bombardment from Israel.
A significant proportion of global oil supplies transit through the Red Sea route, and the attacks have forced shipping companies to re-route journeys around Africa, driving up prices and causing delays.
The Houthis have vowed to expand attacks on British and United States linked vessels after Washington and London carried out airstrikes against their bases in Yemen.
So far an abundant of oil supplies have prevented price surges, but this could change in the coming weeks, the European Commissioner for the economy Paolo Gentiloni warned.
“In a context of very very low economic growth, we are facing a number of geopolitical risks,” Mr Gentiloni said.
“We can’t underestimate the possibility that these tensions in the Red Sea could have consequences. For the moment they don’t seem to have been realised, but it could happen in the coming weeks. There could be implications for energy prices and inflation.”
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