The ESB is proposing to increase the cost of homes connecting to the electricity system by between 15 and 18 per cent in a move which could affect more than 20,000 people.

It means that new house buyers could have to pay around €1,200 for the service.

The Construction Industry Federation (CIF) said the increased connection charges would ultimately be borne by consumers purchasing new homes.

In a submission to the energy regulator, Mr Tom Reeves, ESB Networks, the division responsible for the local distribution system, said it needed an overall rise in connection charges.

It pointed out the charges had not increased since 2002 and the full cost of connection was not levied on customers. A spokesman said the charge was a once-off payment to cover the cost of connecting homes to the local wires. He said the connection charges in the Republic were far lower than in most other European countries.

Under its proposals, commercial and industrial customers will be charged 6 per cent more; houses in housing estates face a 15 per cent rise; while one-off houses face an 18 per cent rise.

ESB Networks cited a rise in building inflation and a re-balancing of costs as the reasons for the increases.

The main impact will be on one-off houses, because the cost of connection for homes in large developments is normally absorbed by the builder.

About 20,000 one-off houses are built each year and the increase in these cases will have to be borne by the consumer. The charge for one-off houses is increasing from just over €1,000 to €1,200. However, the changes require the final approval of Mr Reeves and he has invited submissions before April 9th.

The CIF's director of housing services, Mr Hubert Fitzpatrick, said in the case of housing developments, builders would pay the cost of connection. But he said this would still have to be reflected in the ultimate price to the purchaser.

He said builders were "convenient scapegoats" for a whole raft of extra charges, among them development levies, gas connection rises and increased VAT. In relation to one-off houses, he said consumers would be hit directly.

ESB Networks operates the local part of the electricity distribution system. The large scale element of the electricity network is the responsibility of ESB National Grid. Both companies operate at arm's length from the ESB group, although they are ultimately owned by ESB.