Business

Energy suppliers confirm April price hikes as government support winds down

Reduction in UK Government's energy support scheme mean all suppliers are likely to confirm fresh price increases next month

A reduction in the UK Government's energy price guarantee scheme in Northern Ireland will result in higher electricity costs from April 1.
A reduction in the UK Government's energy price guarantee scheme in Northern Ireland will result in higher electricity costs from April 1. A reduction in the UK Government's energy price guarantee scheme in Northern Ireland will result in higher electricity costs from April 1.
By Ryan McAleer

SOME of the north’s biggest energy suppliers have confirmed price increases for households from April 1.

Changes to how the UK Government’s energy price guarantee (EPG) scheme works in Northern Ireland means all domestic customers face paying more for electricity from next month.

Power NI’s 475,000 customers will see prices rise by 14 per cent – around £120 a year, while Electric Ireland’s 96,000 customers will pay 18 per cent more, which will add around £190 to the average bill.

Both suppliers have cut their underlying tariff in response to the falling price of wholesale natural gas. In Power NI’s case, it reduced its tariff by 16 per cent, while Electric Ireland opted for a 9 per cent cut.

But it won’t be enough to offset the price households actually pay for their electricity due to the winding down of the UK Government’s EPG scheme.

First introduced last November, the scheme had shielded customers from energy companies passing on the costs of surging wholesale gas prices.

The savings, which were automatically applied by the suppliers, originally took around 20p off every kilowatt hour (kWh) of electricity – the unit of measurement suppliers charge by.

That was reduced to around 14p per unit of electricity on January 1.

While the scheme will run for an extra three months until the end of June, in its final three months, just less than 4p will be shaved off every unit of electricity.

The EPG currently saves gas customers around 4p on every unit. That will fall to 2.6p/kWh of gas from next month.

Unless energy suppliers response to further declines in the price of wholesale gas in the coming months, households could face further increases once the scheme ends for good on June 30.

Firmus Energy announced plans last week to reduce its gas tariff on both the Ten Towns and Greater Belfast networks from April.

The government-backed Utility Regulator only regulates Firmus on the Ten Towns network and SSE Airtricity on the Greater Belfast gas network.

It said the changes by Firmus will be enough to offset the EPG changes, meaning Ten Towns gas customers will still see a fall in prices from April 1.

But a review by the regulator for SSE Airtricity’s tariff in Belfast didn’t result in any change, meaning its customers face a 15 per cent hike next month.

Explaining the rise in prices at a time when wholesale gas costs are falling, Peter McClenaghan from the Consumer Council said: “This strange situation is happening because the additional back-dated EPG support consumers here were receiving is ending.

“The additional support had been provided because the EPG was introduced later in Northern Ireland.”

Further changes are being made to the Energy Price Guarantee Scheme. This means there will be a lower level of discount applied to all electricity and gas bills from April.

We’ve published information on how the changes will affect regulated tariffs.https://t.co/qv97A1RIuvpic.twitter.com/2U8kSmajEW

He said the change in EPG means it is likely all domestic electricity suppliers in the north will increase their prices: “Meaning that consumers should consider reviewing their tariff in the coming months to ensure they are on the best deal for their needs, as money can be saved by switching supplier, tariff, or billing method.

“We know from our pulse survey that most consumers in Northern Ireland are still really worried about home energy prices. We urge anyone who is struggling to pay their energy bills or top-up their meters to contact their supplier directly for help and support.”

The interim chief executive of the Utility Regulator said even with the increases, customers in the north will on average pay less for electricity than the average household in Britain or the Republic.

Kevin Shiels said the average electric bill in the Republic currently stands at £1,660, while the GB price cap will be at £1,366 from April 1.

The equivalent for annual bill for Power NI customers will be around £966, while Electric Ireland customers face paying £1,249 over the year.