Power Shock

Power Shock

The cost of electricity is rising again. Power NI has just announced a six per cent increase in its tariff. The hike, when it comes into effect at the beginning of October, will add around £35 a year to the average customer's bill.

It follows two previous increases by Power NI: a fourteen per cent price jump last year and a near six per cent boost in 2017.

This latest announcement is somewhat surprising since it comes as global gas prices, which are the normal driver of wholesale electricity costs, have been moving downwards. The unexpected turn in events is partly explained by a dramatic increase in carbon tax which has been offsetting the fall in gas charges.

There are several other elements involved. Power NI did not recover all of its costs last year. It is entitled to make up the shortfall this year. 

Two highly significant factors are increases in network and market operator costs which were addressed in a report on enirgy.info recently which incidentally warned that electricity prices might go up this year. http://www.enirgy.info/articles/price-jolt

The Energy Regulator  has described Power NI's price increase as disappointing but has nevertheless approved the increase after scrutinising  the tariff to ensure it reflected the actual cost of supplying electricity to homes here.

Jenny Pyper added: “Despite this increase, Power NI’s standard domestic electricity tariff continues to be lower than the GB and RoI average. Taking account of the recent change announced in GB to the price cap, annual average bills in Northern Ireland will be £600, compared to £800 in RoI and £700 in GB."

This price announcement will impact more than 450,000 homes but even if you are not a Power NI customer, it's possible you will be affected because most of the factors driving up the company's prices will affect its competitors. It remains to be seen how exactly these suppliers will react but we should learn over the next few weeks.

Meanwhile the Energy Regulator is also reviewing gas prices. The outcome of that investigation should be known soon.

Last updated on 06/05/2020

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