The Taoiseach has said that energy prices are “off the Richter scale” compared to last year as Electric Ireland announced another hike, its third increase in five months.
The provider announced plans to increase residential electricity bills by 26.7% and gas bills by 37.5% with effect from 1 October 2022.
The company said the increases equate to €37.20 per month on the average residential electricity bill and €42.99 per month on the average residential gas bill, based on the estimated annual bill as defined by the Commission for Regulation of Utilities (CRU).
It followed similar recent hikes from other suppliers amid growing concerns about energy costs and security over the winter.
Taoiseach Micheál Martin said the latest increases reflects the “broader exponential rise in energy prices”.
This afternoon, Martin told reporters that there have been "dramatic, unprecedented spikes in pricing" in the wholesale market for electricity.
In the minutes after Electric Ireland announces another price hike, the Taoiseach tells @thejournal_ie that the latest rise is part of the “broader exponential rise in energy prices”
— Lauren Boland (@laurenanna_1) September 1, 2022
“We’ve seen dramatic, unprecedented increases in pricing” pic.twitter.com/aOJVIIatbE
Next week, an urgent conference of energy ministers from across the European Union is scheduled to take place in Brussels.
The Taoiseach stated, "The Commission President [Ursula von der Leyen] has advised me that they would be bringing forward emergency legislation to try to deal with the market right now."
"That will probably be the link between the price of gas and the wider price," he added. "We need to act fast in respect of that, and then over the following 12 months, a more systematic reform of the market."
"From a government standpoint, we will use the Budget and the Cost of Living Package in addition to the Budget to relieve pressure on households. We must also consider the effect on businesses in terms of employment creation and job retention.
"We will also be launching a demand reduction approach – in other words, energy efficiency all round and all of us will have to see what we can do to reduce our energy consumption, because it is very costly now at an individual level and at a societal level.”
Paschal Donohoe, the minister of finance, concurred with the Taoiseach when he told reporters this afternoon that the budget would be "heart"-centered on measures to help address the growing cost of living.
However, when asked if he would consider instituting energy price controls in Ireland, he responded that given the scale of the country's economy, he did not think a cap could be implemented there successfully.
The most efficient way to implement price controls, according to Donohoe, is at the European level or even through enhanced forms of international collaboration.
In an economy of our scale, "I am not persuaded that we would be able to implement a price cut without immediately causing other problems for ourselves."
Regarding a windfall tax, Donohoe said he and the government would be thinking about it, but it would be necessary to assess any potential effects.
The Taoiseach stated that the concept of delaying the clock changes until October in order to ease some nighttime energy demand is not explicitly being addressed at this time, but that "the big impact we can have is on our energy consumption, how we can utilise energy over the coming months."
Budgetary pressures can be reduced to some extent, but with the exponential growth anticipated for the remainder of the year and into the upcoming winter and early next year, there certainly needs to be a bigger market intervention to bring prices back down.
He said he’s spoken to European Commission President Ursula von der Leyen about the EU’s plans to deal with the energy market (energy ministers from around the bloc are due in Brussels for an emergency meeting next week)
— Lauren Boland (@laurenanna_1) September 1, 2022
"This continues to be a very hard moment for consumers, and an unprecedented time in the energy business," said Pat Fenlon, executive director of Electric Ireland, in a statement. "Increases in wholesale gas prices have exceeded 700% over the last 12 months, and 200% since June 2022 alone.
We reluctantly raised electricity and gas costs for our consumers once more, but it was essential given the ongoing increases in wholesale energy prices, especially gas.
"To put that in perspective, wholesale gas costs for the winter at this time last year were approximately GBP£1.15 per therm, and as of last week, prices this winter were approximately GBP£7.70 per therm."
The corporation announced increases in gas and power costs on July 1 in response to the conflict in Ukraine.
Gas prices climbed by 29.2% at that period, while electricity costs jumped by 10.9%.
The first rise became effective on May 1; at that time, electricity prices increased by 20%.
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