Electric Ireland customers could see their energy bills rise by a further 30% in the coming months, an Oireachtas panel has said.
The energy supplier’s head of prices and trading, David Vickers, said much of the increase in wholesale gas prices had already been passed on to customers, adding it was “difficult” to say what will happen to the market.
He made the comments in response to questions from TD Social Democrat Jennifer Whitmore who asked when customers will see the impacts of coverage expiring on their bills.
“We mostly hedged against that, but not all the way,” Vickers told the Environment and Climate Action Committee on Tuesday.
“I would say a lot of the movement we’ve seen in the markets over the past 18 months has already been passed on to clients.
“And the reason why the full amount was not reached is because of coverage.”
Ms Whitmore asked Mr Vickers what this would mean for the average bill.
He told the committee that the electricity market was up about 300%, not gas.
“Electricity is usually about half of a bill, so half a bill will be 150%. And prices have gone up about 120% of 150% at this point,” he said.
Asked by Ms Whitmore whether this means customers could face a 30 per cent increase, Mr Vickers said it was a ‘market function’ at present, but added that he would not couldn’t say if it would definitely happen.
“The markets are moving, they are reacting considerably to announcements from Ukraine, to European gas supply concerns,” Vickers added.
“I can’t say it will happen. In fact, over the past few days, it’s gone down a bit. The previous week it had increased a bit, so it’s really hard to say.
The committee also heard that Electric Ireland had “no choice” but to raise prices after international wholesale gas prices rose by more than 1,000%.
Chief executive Pat Fenlon said “unprecedented” increases in gas prices mean annual costs are set to rise from 300 million euros two years ago to 2 billion euros this year.
He added that Electric Ireland was “very aware” that the price increase is “hard for customers to absorb” and that disconnections will always be a “last resort”.
“Over the past year, significant increases in customer bills have been driven by extraordinary and sustained increases in the wholesale price of electricity,” Fenlon told the committee.
“Wholesale electricity price increases in Ireland were mainly due to unprecedented increases in wholesale gas prices in Britain and the EU, driven by concerns over European gas supply, made much more acute by the conflict in Ukraine and the reduction in Russian gas supplies.
“Wholesale gas futures prices have risen more than 1,000% in the past 18 months. This is an unprecedented level of increase.
“Two years ago, Electric Ireland’s annual wholesale energy costs were in the region of €300 million. At current market levels, we expect this cost to rise to around €2 billion.
In his opening statement, Mr. Fenlon also said: “As we operate as a stand-alone energy supplier in the market, we have no choice but to increase our prices given the magnitude of the increases. of our costs.
“ESB’s generation and supply businesses are required to operate separately, so increased profits from ESB’s generation business cannot be used to offset costs incurred by Electric Ireland.”
Mr. Fenlon also said the provider engages with any residential customers who are having difficulty paying their bills and “works with them to put a manageable payment plan in place if needed.”
“Disconnections are and always will be a last resort,” he said.
He added that there is a regulatory moratorium on disconnections for the winter period for vulnerable customers.
Electric Ireland has over 1.1 million residential electricity customers and over 700,000 residential gas customers.
It posted operating profit before exceptional items in the first half of this year of 357 million euros, compared to operating profit of 363 million euros in the first half of last year.
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