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Electricity bills to rocket by 30%
Householders braced for a £160-a-year hike
Thursday, 4 September 2008
Beleagured Northern Ireland householders were today bracing themselves for a hike of over 30% in their electricity bills.
Northern Ireland Electricity is poised to hit consumers with an increase of up to £160 a year, the Belfast Telegraph has learned.
Details of the new tariffs, which will take effect on October 1, are still being finalised in negotiations between NIE Energy, the Utility Regulator and the Consumer Council.
But it looks likely that the increase — to be announced next week — will be between 30% and 36%, and it’s all down to the soaring wholesale cost of gas.
At present, the average household bill stands at £439 a year, but the proposed increase could put this figure up to just under £600.
And in a depressing double whammy for over-stretched families, Phoenix Natural Gas is also set next week to announce a double digit increase, to also take effect on October 1.
In May, Phoenix increased its tariff by 28%, a move which sparked complaints from fuel poverty groups. And last month, Maxol Direct revealed that the price of home heating oil in Northern Ireland has risen by around 80% in the last year.
by energy companies in Britain.
Kerstie Forsyth from NIE Energy said: ”Wholesale fuel prices are more than double what they were a year ago, despite any recent easing in world oil prices, so a significant electricity price increase in the coming weeks is inevitable.
“NIE Energy looks to buy electricity a year in advance to give price stability and insulate customers as much as possible from further increases in wholesale fuel costs.
“We cannot control world fuel prices, but what we can do is encourage more of our customers to take advantage of one of our discount schemes, such as Keypad or direct debit, to help offset increasing energy costs.”
A spokesman for Phoenix Natural Gas confirmed that the company was in discussion with the Utility Regulator and the Consumer Council over its proposed tariff increase.
Neither the Utility Regulator nor the Consumer Council had any immediate comment to make on the price hikes, but the regulator, Iain Osborne, is due to address the Assembly’s enterprise committee next week.
The soaring cost of electricity and gas bills comes at a time when householders are already trying to absorb hefty increases in the cost of diesel, petrol, home heating oil and food.
Dr Alasdair McDonnell, who is chairman of the Assembly’s enterprise committee, said he was “deeply concerned” by the prospect of tariff increases.
He called on NIE Energy and Phoenix to freeze prices, given that oil prices had recently fallen from their record highs.
The utility regulator has been scrutinising the proposed increases, ensuring that they are a straight pass-through of higher wholesale costs.
Over the past year, world coal prices have gone up by 146%, gas by 114% and crude oil by 90%, and there are predictions of major increases in wholesale gas prices over the coming winter.
It is understood that NIE Energy has over the summer managed to hedge more than 90% of the electricity it needs over the winter, and is hoping to avoid any further increases over the next 12 months.
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It's almost always been the case that electricity / oil / petrol have cost more in NI compared to mainland UK, and also that we are more dependent on oil (due to the nature of rural living and the weather). To an extent this is compensated for because property is cheaper than in the rest of the UK. Although there has been a blip in house prices, this will probably be the case in the near future again.
Posted by Peter | 08.09.08, 11:30 GMT
In true fashion the people of NI are suffering due to a lack of choice. "Your electricity is going up 30%, cost of oil & the economy you see, things you wouldn't understand" , "Oh really, well thank-you that's just what I need along with the high cost of everything else". "Will I receive higher wages, more benefits and better services to help me and my family?" "Er No."
So why don't those lovely people in government and those charming local service providers for Gas, Kerosene, electricity and petrol just hoist us over that proverbial barrel? I think most of us are braced for the pounding.
We are too dependant on oil for everything and as levels reduce throughout the world costs will increase. The shocking thing is at the rate at which this is happening... a 30% increase within months for electricity? I'd like to see there profit and loss accounts and the salaries of NIE executives...
What goes up, must come down.. Unless it's a bill or anything from government AJ
Posted by Anthony | 08.09.08, 10:31 GMT
NIE energy does not own any power stations - yes the Viridian group does and is in turn owned by Arcapita - but NIE energy has to buy out of the pool or enter into NDCs with a power stn like say Ballylumford. They are a regulated company and profits are regulated - anything over the 5% goes back the next year - in turn under recover can be clawed back by what is called the K factor - the fact oil has dropped still does not mitigate the fact it has increased exponentially over the last 12 months. Oil is only one fuel and Gas is still increasing - last year it was 41p/therm for winter 08 it is now £1.02 - you dont need a calculator to work out the implications.Also with the oil - it is bought in dollars and the pound has slumped 20% against it.
Posted by G | 06.09.08, 15:05 GMT
with the rate that they are increasing the cost ,, maybe we should all move to n.i.e or possibly stormont and let them give us the heat we require ,, i dont think there would be many in stormont worried about switching their heating on ,, or the fat cats in the n.i.e !!!!!!!!
Posted by heather | 05.09.08, 09:42 GMT
How on earth are pensioners expected to keep up with all the price hikes???
Posted by Liz | 05.09.08, 02:19 GMT
G
Explain your statements raw materials such as crude oil are trading at 107 dollars a barrel two months ago it cost 147 dollars a a barrel. Crude oil has been falling steady for the past two months and indications show that trend to continue. Therefore where is the need for NIE to increase costs.
You talk about a 5% profit margin what a load of balls, anyway it this where true it would therefore be at NIE advantage to keep prices high after all 5% of £100.00 is more profit than 5% of £50.00
Do you not know that NIE owns shares in the poer stations through subsidurary companies
Posted by Raymond | 04.09.08, 22:27 GMT
G
Explain your statements raw materials such as crude oil are trading at 107 dollars a barrel two months ago it cost 147 dollars a a barrel. Crude oil has been falling steady for the past two months and indications show that trend to continue. Therefore where is the need for NIE to increase costs.
You talk about a 5% profit margin what a load of balls, anyway it this where true it would therefore be at NIE advantage to keep prices high after all 5% of £100.00 is more profit than 5% of £50.00
Do you not know that NIE owns shares in the power stations through subsidurary companies
Posted by Raymond | 04.09.08, 22:26 GMT
Go to Uswitch.com, pretend to have a London postcode. Enter your details and how much you use and ask them to search for the best deal for you between all the Mainland suppliers. Prepare yourself for a shock as you see how much more you are paying than your UK compatriots. Even with their increases just announced they still are not hitting our prices right now, and they are squealing! And now we are to sprint 30% further into the distance. The Lunatics have taken over the asylum.
Posted by Vaughan | 04.09.08, 18:35 GMT
sorry but is everyone not living in the real world - have you not seen the huge increases in the raw fuels which are used to make electricity? There is now a single electricity market for the Island of Ireland and it operates on a pool system - NIE is not allowed to own power stations so has to buy out of this pool - due to the nature of the pool power stations do not hedge their fuels as they get the pool price therefore when the raw energy prices rise so does the price NIE pays - they cannot absorb these costs and the large monthly billed commercial customers have been exposed to these increases already. The domestic market is already open to competition but no one else wants to enter it as there is very little money in it - remember NIE Energy is a regulated company with profits set at 5% - the people to blame are thise who inititated the credit crunch - ie the Banks etc - who have moved into the commodity markets when the credit crunch hit & the manipulation of wholesale gas prices
Posted by G | 04.09.08, 16:23 GMT
The sooner we have other energy suppliers here in Northern Ireland the better. We desperately need some competition to wake up our energy suppliers.
I receive a free email each week from Martin Lewis' Money Saving Expert (Google it) and he regularly advises which company to switch to in order to save on energy costs. Here, we are stuck with NIE and Phoenix Gas. At least Dick Turpin had the decency to wear a mask!
Thankfully, we still have a chooice when phoning around for home heating oil.
Posted by Centaur | 04.09.08, 15:15 GMT
Time for our local politicians to act and force cuts due to a monopoly in this sector within NI. We need competition here big time or else we will get more of the same for a while yet.
Oil prices have been dropping - time to cut the bullsh*t!
Posted by Liam | 04.09.08, 14:18 GMT
I think NIE need to take a good hard look at the price of crude oil. It has fallen by 28% in the last two months at that time wholesale engery prices had double in price but now they have come back down. When will NIE reduce their price accordingly?
What about electricity produced by renewable engery surely this has not gone up by 30%
Catch yourself on NIE, its time for record profit levels to stop.
Posted by Raymond | 04.09.08, 13:20 GMT
I'm lucky myself as I'm single & live alone. I've noticed a rise in my electricity, around £1.40PW compared to last year. My gas is not too bad roughly around £0.80 PW. For both I have Top Up Metres.
What I want to know is, when the world prices start to go down, will our bills go down? If not, Why not?
Posted by Dave | 04.09.08, 11:24 GMT
This shows waht the complete lack of compettion in NI leads to. At least on the mainland you could shop around a bit to save a little money. Here, we're held to ransom by the only suppliers
Posted by Bill Scott | 04.09.08, 10:37 GMT
Again what sort of profits will they be making??? Look at the oil companies profits. See in African i give the Africans credit there. They team up and boycott or wreck the infrastructure rather than be ripped off. They unfortunately live in squalor but aren't we we the cost of living???
Posted by Jocelyn Brandley | 04.09.08, 09:43 GMT
I received a letter from NIE last week explaining that my monthly direct debit was increasing from £18 to £25 whcih is an increase of about 39%!!! They said it was due to increased energy costs. I hope it's not going to go up again??!!
Posted by stephen | 04.09.08, 08:32 GMT