Power NI and SSE cut their tariffs - but customers will still pay more
ENERGY providers Power NI and SSE are reducing their tariffs by 7.1 per cent and 12.2 per cent respectively from next month following a review by the utility regulator.
But customers will actually have to pay more, due to end of the Energy Price Guarantee, which will drop from approximately £454 a year in discount for the average household to zero.
And as a result, domestic energy bills will increase by 5.1 per cent for Power NI's 500,00 electricity customers and by 10.6 per cent for 200,000 SSE gas customers, as the underlying reduction in prices is less than the government support.
Power NI current average tariff of £1,092 drops to £1,015, while for SSE Airtricity gas supply, the annual bill under these latest increases drops from £1,594 to £1,400.
But the removal of the discounts effectively render those new lower tariffs meaningless for households.
Utility Regulator chief executive John French said: “In April we commenced a review process of the regulated gas and electricity tariffs in Northern Ireland as part of our regular scrutiny to make sure consumer bills reflect the actual cost of providing gas and electricity to homes here.
“Following our analysis of both company’s costs, and as a direct result of the recent falls in forward wholesale energy prices, we agree that Power NI’s electricity tariff will decrease by 7.1 per cent, and SSE Airtricity Gas Supply’s tariff will reduce by 12.2 per cent.
“But unfortunately these reductions coincide with the removal of the financial support provided through the UK Government’s Energy Price Guarantee (EPG) scheme, introduced last November to help Northern Ireland households with high energy.
“As the cost of wholesale energy has been steadily reducing, the UK Government have decided to reduce the value of the support scheme to zero from July 1.
“Although the underlying wholesale price of energy has significantly reduced over the last few months, it still remains twice the price of historic norms. For example, the forward gas price is currently around £1.20 per therm, whereas before the Russian invasion, it was around 50 to 60p per therm.”
William Steele, director at Power NI customer solutions, said: “As wholesale prices have continued to fall, we have welcomed another chance to further reduce its underlying unit prices for customers, with our third tariff reduction of the year.
“But despite this good news, the decision by the UK Government to remove its Energy Price Guarantee support means that unfortunately customers will see an overall increase of 5.1 per cent.
“We continue to work closely with our charity partners and other key stakeholders to ensure the most vulnerable in our local communities get the help they need. If anyone is worried about paying bills, please contact us directly, we are here to help.”
SSE Airtricity general manager (NI) Andrew Greer said: “I’m pleased to be delivering on our promise to reduce prices as soon as it was possible to do so.
“We know energy costs are a primary concern for customers across Northern Ireland and the last 18 months have been a difficult period for everyone who is trying to manage the impact of the cost of living crisis.
“We are hopeful the improvements in wholesale prices will continue and that market conditions stabilise to levels that are more sustainable for suppliers and consumers.”
He added: “SSE Airtricity is fully committed to continuing to reduce prices as and when it is possible to do so and will continue to work with our customers to provide the support and service, they need.”