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The Commission for Energy Regulation (CER) has received an
application from ESB Customer Supply for an interim increase
of 17.5% in electricity prices for households and SMEs to
apply from 1st August 2008.
The Commission has published its draft decision which proposes
to allow this increase to take place.
Fuel prices have risen dramatically over the past year -
e.g. gas prices have risen by over 130%, oil by 85% and coal
by almost 100%. Fuel costs are the single largest cost component
in determining the price of electricity and their upward path
is the key driver of rising electricity prices. Increases
of this magnitude have inevitable consequences for electricity
prices in Ireland as in other countries.
In order to cushion the impact on consumers of such fuel
price increases the CER has concluded that it is reasonable
and proportionate in these circumstances to deal with the
inevitable electricity price increase in two phases for households
and SMEs.
Accordingly, having considered the ESB’s submission for an
interim price increase and discussed it in detail with ESB,
the CER proposes to approve this interim increase in ESB’s
Public Electricity Supply tariffs for households and SMEs
of 17.5% - to take effect from the 1st August, 2008.
The Commission will review the situation later in the year,
based on market conditions at that time. A proposed decision
on this will be published in early November next, with the
final decision on 1st December to apply from 1st January to
30th September 2009.
It is also proposed that ESB PES large customers, currently
on Pool Price Pass Through Tariffs, will be offered the option
of a 12 month fixed price contract from 1st October to allow
them fix their electricity costs. This price will be fully
reflective of forward prices in the Single Electricity Market.
ESB PES will make its submission to the Commission at the
end of July on the details of this pricing arrangement.
Given the significant impact these very large increases in
fuel costs will have on electricity prices, the CER actively
engaged with ESB to explore all options to mitigate the price
impact for customers. As a result, the ESB will provide -
as part of the second phase arrangements - a rebate of €300m
applicable to all electricity customers irrespective of their
supplier, to help offset the impact of rising fuel prices.
The Commission will work with ESB and independent suppliers
to ensure that all customers receive this rebate through their
bill.
The Commission proposes to make its final decision on these
matters on 18th July.
To view the CER Press Release - Click
Here
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