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Bord Gáis customers face rise in bills of over €300 a year

Conor Pope - Irish Times

BORD GÁIS Energy customers will see their energy bills rise by more than €300 a year as the company prepares to dramatically increase its charges in the weeks ahead.

The firm will announce an electricity price increase of more than 10 per cent later this week and is preparing to apply to the Commission for Energy Regulation for a gas price increase of between 20 and 30 per cent, The Irish Times has learned.

The increases come at a time when more than 100,000 of the energy provider’s customers are in arrears and struggling to pay their bills.

While the company’s electricity price increase will take effect from August 1st, the gas price increase will have to be delayed until the beginning of October, pending sanction from the commission.

Bord Gáis Energy is blaming a spike in energy prices on international markets and says wholesale gas prices have doubled over the last year.

It says it is no longer in a position to absorb price increases of this magnitude so will have to start passing them on to consumers.

In May, when the company announced a profit before tax of €120 million, its chief executive John Mullins warned it would raise electricity prices by up to 10 per cent and would be seeking sanction from the energy regulator for a gas price increase of 10-20 per cent.

It is understood the situation has since worsened and the gas price increases are likely to be substantially higher.

The average domestic gas bill in the Republic is €720 a year; an increase of 25 per cent will see bills increase by about €180 a year. The average electricity bill for Bord Gáis Energy customers, meanwhile, stands at €1,200 annually; an increase of 12 per cent will add a further €144 to consumers’ bills.

Bord Gáis Energy now has more than 114,000 customers in arrears of two months or more, an increase of 300 per cent on 2010, although the number in arrears has declined by about 1,000 over the last month, indicating the situation is stabilising.

Sources in the company say that even with increases of this magnitude, prices will still be below the levels of three years ago.

“We do not expect people to like the price hikes but we would hope that they would, even grudgingly, accept that it is beyond our control,” one source said.

When contacted, the company would not confirm the imminent price moves.

Posted Date: 
12 July 2011