Bord Gais Energy is to increase its residential electricity prices by 12% from 1st August 2011. This is the first time that the company has increased prices since entering the residential electricity market in February 2009 and follows two successive cumulative price cuts of 15% in May and October 2009.
The price increase is due to the significant increase in the cost of procuring commodities on the wholesale markets. Since the last residential electricity price cuts in October 2009, wholesale electricity prices have increased by more than 20%. Further, the wholesale price of gas, a key commodity used in the production of electricity in Ireland, has increased by 39% in the last twelve months, and on the basis of forward prices is currently priced 30% higher this winter than last.
Jason Scagell, managing director of retail and trading, Bord Gais Energy, says: “The prices paid by Irish customers are intrinsically linked to international wholesale prices and with the markets signaling the prospect of higher winter prices, residential price increases have unfortunately become unavoidable. On this basis, we also expect that the Commission for Energy Regulation will approve price increases for residential gas customers from 1 October 2011, following a consultation which is due to commence shortly.”