Bord Gáis Energy has confirmed that it is to increase its residential electricity prices by 12 per cent from August 1st.
The price hike, first reported in this newspaper on Monday, is likely to add about €150 on to the average household's electricity costs of the course of 12 months.
In a statement issued this afternoon, the company said the price increase was due to the significant increase in the cost of procuring commodities on the wholesale markets.
It said that since the last residential electricity price cuts in October 2009, wholesale electricity prices had increased by more than 20 per cent and added that the wholesale price of gas, a key commodity used in the production of electricity in Ireland had gone up by 39 per cent in the last twelve months,.
"We recognise the strain that households are under at the moment and we have done our utmost to limit the overall price increase to 12 per cent despite much higher increases in international wholesale prices," said Jason Scagell, Bord Gáis Energy managing director of retail and trading.
He said the company had been able to do this "through a well executed procurement strategy that hedged our exposure to wholesale increases and enabled us to maintain retail prices at the same level for the last 20 months."
He said prices paid by Irish customers were "intrinsically linked" to international wholesale prices and said that with the markets signaling the prospect of higher winter prices, "residential price increases have unfortunately become unavoidable".
He said the company expected the Commission for Energy Regulation (CER) to approve price increases for residential gas customers from the beginning of October. He said consultations on a gas price increase – which The Irish Times understands will be about 25 per cent – will begin shortly.
Mr Scargell urged any customers having difficulties meeting their bills, to contact the company immediately.
Bord Gáis Energy now has more than 114,000 customers in arrears of two months or more, an increase of 300 per cent on 2010, although the number in arrears has declined by about 1,000 over the last month, indicating the situation is stabilising.
The average domestic gas bill in the Republic is €720 a year; an increase of 25 per cent will see bills increase by about €180 a year. The average electricity bill for Bord Gáis Energy customers, meanwhile, stands at €1,200 annually; an increase of 12 per cent will add a further €144 to consumers’ bills.
