Regulators have verified that families will need to shell out approximately €8.41 extra each month for electricity from the 1st of October onwards. This is intended to fund improvements to the energy networks in the Republic, totalling an annual increase of just over €100 for household electricity invoices.
Electricity users incur standing charges on their invoices in order to defray the expenses of upkeeping the network that delivers power to their homes and workplaces. The Commission for the Regulation of Utilities (CRU) announced this Tuesday that these charges may rise on average by €8.41 every month from October 1st for households and businesses to accommodate these expenses.
The current standing charges amount to between €25 and €30 per month, or more than €50 on the bi-monthly invoices many households pay. Although households can reduce these invoices by using less energy, they are invariably saddled with standing charges.
The oversight commission for the Republic’s electricity industry has stated that state companies ESB and EirGrid require €1.4 billion for the upkeep and expansion of the national grid and distribution systems.
The significant increase this year is attributed in part to the regulator’s decision to reduce the charges by an average of €6 a month over the 12 months from the previous October. This was to reimburse most electricity consumers for the de facto undercharging of major energy consumers between 2011 and 2022. This move led the CRU to reimburse customers to the tune of €100.86 million.
Electricity providers have the option to refrain from transferring all or some of the CRU-authorised increase starting next October, according to the regulator. While the agency sets the network charges, it permits providers to decide whether they will absorb or transfer the costs.
EirGrid is in charge of the national grid, the core system that transports electricity from power stations to consumers, while ESB Networks oversees the distribution network that connects individual homes and businesses to the grid.
The CRU stated that the €1.4 billion required to upkeep and amplify the country’s electricity networks would be a 38% increase over the amount required in the 12 months leading to October 1st.
The regulator highlighted the necessity for the electricity networks to be “upgraded and modernised” annually to provide reliable and consistent supplies to consumers. The Republic also faces an additional challenge with its plans to enhance its renewable electricity production in the years ahead, which will necessitate extensions and other significant alterations to its national grid.
As exemplified by the regulator, the Republic is currently in the midst of an unprecedentedly high electricity usage and demand shift. This requires considerable investment to maintain a network capable of accommodating all customers’ requirements, transitioning from fossil fuel dependency, and heating residences and powering transport with electricity, according to its statement.
Karen Kavanagh, the CRU’s Director of Networks and Economic Regulation, highlighted the commission’s need to painstakingly analyse ESB’s and Eirgrid’s investment requests in the networks to ascertain their necessity and benefit to customers, while continually striving to minimize costs.
She added that this must be weighed against further network maintenance, upgrade, and development needs in order to promote lower carbon alternatives for heating and transport. Moreover, she emphasized the importance of an ongoing supply of a reliable network for customers, which is crucial to cater for the growing population’s needs.