CER approves ESB increase of 17.5%


The Commission for Energy Regulation (CER) has received an application from ESB Customer Supply for an interim increase of 17.5% in electricity prices for households and SMEs to apply from 1st August 2008.

The Commission has published its draft decision which proposes to allow this increase to take place.

Fuel prices have risen dramatically over the past year - e.g. gas prices have risen by over 130%, oil by 85% and coal by almost 100%. Fuel costs are the single largest cost component in determining the price of electricity and their upward path is the key driver of rising electricity prices. Increases of this magnitude have inevitable consequences for electricity prices in Ireland as in other countries.

In order to cushion the impact on consumers of such fuel price increases the CER has concluded that it is reasonable and proportionate in these circumstances to deal with the inevitable electricity price increase in two phases for households and SMEs.

Accordingly, having considered the ESBís submission for an interim price increase and discussed it in detail with ESB, the CER proposes to approve this interim increase in ESBís Public Electricity Supply tariffs for households and SMEs of 17.5% - to take effect from the 1st August, 2008.

The Commission will review the situation later in the year, based on market conditions at that time. A proposed decision on this will be published in early November next, with the final decision on 1st December to apply from 1st January to 30th September 2009.

It is also proposed that ESB PES large customers, currently on Pool Price Pass Through Tariffs, will be offered the option of a 12 month fixed price contract from 1st October to allow them fix their electricity costs. This price will be fully reflective of forward prices in the Single Electricity Market. ESB PES will make its submission to the Commission at the end of July on the details of this pricing arrangement.

Given the significant impact these very large increases in fuel costs will have on electricity prices, the CER actively engaged with ESB to explore all options to mitigate the price impact for customers. As a result, the ESB will provide - as part of the second phase arrangements - a rebate of Ä300m applicable to all electricity customers irrespective of their supplier, to help offset the impact of rising fuel prices.

The Commission will work with ESB and independent suppliers to ensure that all customers receive this rebate through their bill.

The Commission proposes to make its final decision on these matters on 18th July.

To view the CER Press Release - Click Here