Following today’s announcement by Power NI of a 17.8% tariff increase (or £1.73 per week) for their domestic and small business customers, the Utility Regulator said the main reason was due to increases in wholesale energy costs.
Shane Lynch, Utility Regulator Chief Executive explains further:
“Last year we were able to approve a 14% reduction in electricity tariffs over the winter period due to falling energy wholesale costs. Unfortunately, continued volatility in international wholesale energy costs has led to significant cost increases, much higher than that forecast by Power NI when tariffs were last set in October 2012.
“This increase brings the tariff back to what it was before the decrease last year. Northern Ireland continues to be heavily reliant on fossil fuels, particularly gas, for electricity generation. This reliance means that electricity prices are particularly vulnerable to rising energy costs on the international energy markets.
“We regret having to approve tariff rises and are aware that Power NI’s increase will add to the difficult times that households and businesses are experiencing. We only approve tariff increases after extensive scrutiny, and have done so to ensure that this increase is unavoidable.
“Northern Ireland consumers have a choice of electricity supplier and I would encourage them to explore the choices available to them.
“We continuously review the components that make up Power NI’s tariff, and should wholesale energy or other costs decrease, we will act as soon as possible to ensure that this reduction is reflected in consumer bills.”
The tariff increase will come into effect from 1 July 2013. Today’s announcement follows the ongoing tariff review process that is carried out by Power NI and the Utility Regulator, in consultation with the Department of Enterprise, Trade and Investment and the Consumer Council for Northern Ireland.
Utility Regulator briefing paper