Latest:

04:32 Killer goalie offered club trial
04:30 Grandmother catches rabies from dog
04:30 MSPs set to pass alcohol price Bill
04:30 Hunt ex-aide to face Leveson probe
03:22 Facebook flotation faces U.S. probe
02:50 HP issues British job cuts warning
02:42 Clinton: U.S. hacked al Qaida sites
02:32 Shooter accused police of cover-up

Double blow on energy charges: Electricity bills up 33% Gas bills up 19.2%

By Robin Morton
Wednesday, 10 September 2008

Phoenix Natural Gas said its bills were being racheted up by 19.2%

enlarge

Consumer bodies hit out after unprecedented increases of 33.3% in the price of electricity and 19.2% in the price of Phoenix Natural Gas were announced. For a number of householders this will mean paying an average of £258 more a year for gas and electricity.

And the hikes come on the back of a 73% increase in home heating oil since last year and on top of rising food prices.

The Consumer Council - which was part of the consultation process, said the magnitude of the increases would strike "fear and distress" into many consumers.

Eleanor Gill, the Consumer Council chief executive, called for the scale of the NIE Energy increase to be re-examined and urged the company to justify why the increase was almost double those being applied in Britain.

She said: “These price rises are truly shocking for consumers and people will struggle to cope. People can’t find extra money they don’t have to keep the lights and the heat on in their homes. Today’s increase will make the vulnerable even more vulnerable.

“NIE Energy’s scale of increase is not and it needs urgent and further explanation — in just 10 months their rate of increase has almost doubled compared to the rest of the UK even though we are told that global energy prices are behind these rises.

“The Consumer Council cannot accept an increase of this scale until this fundamental question is fully answered.”

Utility regulator Iain Osborne confirmed that he had scrutinised the proposals from NIE Energy and Phoenix before approving the increases.

“We regret having to approve major price rises and are conscious of the impact this will have on household budgets in Northern Ireland.”

Glyn Roberts, chief executive of the NI Independent Retail Association, warned that the rising electricity costs would have a negative impact on the retail sector, as householders cut back on their shopping.

The tariff increases, which are blamed on the spiralling cost of wholesale gas, will take effect on October 1 — just as winter begins.

They mean that the average annual domestic NIE bill will be rising from £439 to £585 — an extra £4.58 per week — while the average Phoenix household bill goes up from £577 to £689, an extra £2.15 per week.

The rises will have a widespread impact, given that NIE Energy has almost 800,000 domestic and business customers, while Phoenix has a customer base of 110,000.

The Citizens Advice Bureau, said many people would struggle to pay the new tariffs.

And the Northern Ireland Manufacturing Focus Group described the increases as “potentially disastrous” for local firms.

Lagan Valley Assembly member Edwin Poots, the former Culture Minister, called on the energy companies to shelve the increases until a further assessment of the international oil and gas market could be made.

Both NIE Energy and Phoenix insisted they were simply passing on the increased cost of wholesale gas, which they said had doubled in price over the last year.

NIE Energy managing director Stephen McCully said: “We regret having to pass such a sizeable increase on to customers, but the sustained very high power purchase costs have left us with no alternative.

“NIE Energy buys most of its electricity in advance to give price stability and insulate customers as much as possible from further increases in wholesale fuel costs. However, when high prices persist we have no option but to pass these costs.”

Economy 7, which is used for heating in about 4% of homes, will also increase by 33.3%.

David Strahan, general manager of Phoenix Supply, said the company was, in common with energy companies across the UK, experiencing record high wholesale costs.

Print
Text Size
- Normal
- Large
- Extra Large

Comments

First |
Previous
1
2
Next
| Last

21 Comments

In the mainland, Energy Companies, are offering all kinds of deals on Electricity and Gas, such as fixed rate deals, to help consumers in some way or another.
We have the costliest electricity in the UK and you have apologist come on here and take blame away from NIE and the Government.
I don't care who is responsible for this price rise, but someone is making from it, and its not the consumers.
I bet none of the MLAs are having problems paying for their Utility bilss and Fuel.
If it ever got tight for them, they just give themselves an inflation busting payrise, and have us pay for it through tax, and rates.

Posted by Campbell Allen | 11.09.08, 19:44 GMT

Crude oil down 34% in the past two months could NIE and Phoniex gas explain why they need to increase their services by a further increase of 33% & 19.2% respectively, this is on top of the earlier increase this year.
AT LEAST RDICK TURPIN WORE A MASK!!

Posted by Raymond | 11.09.08, 16:22 GMT

Here here Anne - but as a single full time working parent its not only rates we dont get help with, we dont get help with prescriptions, dentist, school uniforms all because we do get up off our backsides to hold down a job.

Posted by MARIE | 11.09.08, 10:51 GMT

How long are we going to remain quiet and allow the Government to pretend that inflation is 4%? As a single parent I can't afford any of the luxury items that are included in the calculation which bring the cost of inflation down to 4%. As a public sector worker my pay rise will be capped at 2% unlike the real increased cost of the essentials I buy. My family's inflation rate is nearer 20% than 4%. Oh and then as a single householder in work living in a house that is not worth more than £400,000 I get no assistance with my huge rates bill unlike the wealthy here and single householders in GB. There is something very wrong with this society where it includes the cost of luxuries in its inflation calculations so that it can artificially lower the wages of the very people who cannot afford to buy such luxuries and that gives blanket assistance with the cost of rates to those who own the most expensive houses while refusing it to those who have a single household income.

Posted by Anne | 11.09.08, 08:30 GMT

Andrew, I think you miss my point.

If you subscribe to "Money Saving Expert"'s free email, you will see price comparisons between different companies for THE SAME amenities - much in the same way as you will see insurance services touted on Confused.com et al.

Posted by Centaur | 11.09.08, 05:53 GMT

Centaur

The increase is not profiteering - it's covering gas (and other fuel)costs. If NIE's gas had not been 'hedged' over the last 'period' at a lower price, then you'd have been paying considerably more at an earlier stage than you will be paying come October (the oil/gas price move must be looked at over the last year, not the last few weeks (when it's dropped a minimal amount compared to where it was 12 months ago)).

The wholesale market within Ireland (as a whole) is already open to competition with NIE 'competing' with ESB etc. Interestingly, the electricity price in NI is now similar to what people in RoI have already been paying.
It's not profiteering.

Posted by Andrew | 10.09.08, 22:50 GMT

Having read all comments (including an astonishingly patronising one from M Spence), I repeat my view, made earlier in the month, that the REAL answer to lower power costs would be competition.

Bring in other power suppliers. NIE and Phoenix would soon find miraculous ways to lower their charges if they were faced with competition from other suppiliers as the companies in Great Britain are.

M Spence, your condescending remarks about "ignorance" are not helpful. People here are not (usually) stupid, and are perfectly aware that, in spite of a drop in the cost of raw materials, the 33% increase in NIE's charges is sheer profiteering - in spite of the pathetic bleeting from their spokesperson.

Posted by Centaur | 10.09.08, 20:02 GMT

sorry Neil but the Viridian group was bought in 2006 by a private equity firm called Arcapita and is now privately owned by this company - note it is now up for sale again and may be bought by another utility company

Posted by G | 10.09.08, 19:27 GMT

"NIE has no shareholders". Partly true. It's part of the Viridian group, a publicly quoted company. With shareholders.

Posted by neil | 10.09.08, 18:04 GMT

Having read the various comments I am surprised at
the general level of ignorance expressed on this board so I will give it to you in a nutshell.

Energy is only going to get more expensive. No amount of digging in Antrim or Government rebates are going to change that. There is more demand for Oil and Gas and dwindling supply, the UK is now a net importer of energy so your gas is coming from Norway and Russia who can charge what the market dictates. I guarantee that while prices seem to be stabalising this is only a temporary repreve expect prices to double again over the next 1 - 2 years.

What we are experiencing is the the first volley of peak oil as predicted in the Hubberd curve which when compared to the decline of North American and North Sea Oil and Gas fields has been proved accurate.

So take action and lobby local politicians to plan for energy transition. Solutions do exist but will take time to implement and need to be planned for.

Posted by M Spence | 10.09.08, 17:26 GMT

The comment by Stephen McCully (NIE) that "we (NIE) don't make a penny more from this increase" is wholly unacceptable and totally inappropriate, particuarly in light of the current economic climate. Presumably NIE won't be making a penny less from the increase then?

Posted by Darren | 10.09.08, 17:22 GMT

It is foolish for pensioners to continue paying bills to NIE, Rates etc. by direct debit, because they are can now be fleeced with impunity,and lose control of their money. They must cancel Direct Debits and prioritise expenditure to protect their wellbeing.

Posted by Malachy McAnespie | 10.09.08, 16:19 GMT

This situation will continue as long as we are at the behest of mineral rich countries whose governments have a vested interest in creating instability and restricted supply for their own political and economic gain.

What we need is new safer 4th generation nuclear power plants to be built in the UK. This will give us a controlled and cost-effective national electricity supply that is free of global economic and political forces. Nuclear power will also help in combatting pollution and global warming as it produces zero CO2 emissions when operational; clearly substantially less than gas, coal or oil and less than hydro, wind and solar power.

If we want to have lower electricity prices in the future then we have to accept Nuclear power as an alternative 'local' source of energy production

Posted by Realist | 10.09.08, 15:09 GMT

Belfast Boy - NIE does not have shareholders.

NIE also has to buy (mostly) gas on the open market with which to run the power stations. If they don't pay the market price then the stations don't run and you have no electricity - simple as that.
The price rises today are only to cover these costs - it's not as if the company is increasing their profit from them. As they're also a regulated business, any profit (outside a set amount) is returned as lower prices (and vice versa - hence today's rise). I don't like it any more than you do but it's the global markets at fault, not NIE.

Posted by Andrew | 10.09.08, 14:16 GMT

Is it not time that the NI Assembly tooks its first serious decision and nationalised NIE. Instead of greedy shareholders, Executives and Directors making huge sums, lets have lower prices for the cinsumers, controlled by the Government.

Posted by Petesy | 10.09.08, 14:01 GMT

Time the Gordon to ge this sorted as we are not high wages earner like the MP amd MLA's Surely the VAT can be reasonable and come down a bit??!!

Posted by Michael | 10.09.08, 13:40 GMT

Yes, prices should be decreasing as oil price decreases but long term rising energy prices are inevitable as resources are depleted combined with increasing demand.
The only answers are to be more efficient, wear more clothes, waste less and heat a smaller part of our homes.
Also humans must use other sources of energy but a recent Eric Waugh article, in the BT, discussed how people in the Ballymoney area were reluctant to utilise the huge lignite deposits - this project would have helped our present crisis. Additionally, help would have come from the offshore wind farm off the coast at Portstewart but again development was prevented by objectors. Perhaps these people need to rethink their case!
Northern Ireland is also reasonably rich in geothermal resources which have not been exploited but many politicians rarely think in the long term as they are too obsessed with holding on to power.

Posted by robbo | 10.09.08, 13:14 GMT

This is a nightmare - I can't afford these rises. I guess it's just going to have to be a case of extra jumpers this year instead of heating.

Posted by Fiona | 10.09.08, 12:46 GMT

I think its time we took to the streets, and start protesting over this.
We are being held to ransom by NIE, and Phoenix Gas, and maybe its time we start protesting outside their premises, and letting them know, once and for all how we feel.
Maybe we should ALL refuse to pay our next Electric Bills, and see how they react then.
Oil is coming down, so should the Electricity and Gas.
It needs to be brought to a head by the people themselves, instead of waiting on Politicians to do it for us.

Posted by Campbell Allen | 10.09.08, 12:27 GMT