SSE Airtricity is to increase the unit rate of its electricity by 9.4 per cent and gas by 11.6 per cent from early next month.
It is also increasing its daily stranding chargefor electricity by 6.1 per cent but it is not increasing its gas standing charge.
That means the typical electricity bill will go up by 8.9 per cent, or €172 per year if based on average usage, according to the supplier. SSE’s typical gas bill will go up by 9.3 per cent or almost €139 a year if based on average usage, according to the supplier.
The price hikes will come into effect from 5th October and impact almost 300,000 customers who are on variable rates with SSE. Those on fixed rates won’t be impacted.
“This news isn’t surprising, unfortunately,” said Daragh Cassidy of bonkers.ie. “Over the past few months, wholesale electricity and gas costs have shot up again, largely due to the continued conflict in the Middle East.
Wholesale electricity costs for the past six months are up by around 30 per cent compared to the previous six-month period. And on top of this, fees for the management and upkeep of the electricity grid have increased too.
“And wholesale gas prices have almost doubled compared to this time last year,” Cassidy said
He added that while the hikes that have been announced “may not seem exceptionally high, but they’re coming on top of energy costs which are already at very high levels.”
Gas prices are already around 90 per cent higher than they were four or five years ago while electricity prices are around 70 per cent higher. “So any further hikes to energy costs, however moderate, will hit many households hard,” he said.
He pointed out that there are no easy solutions to high energy prices in the short to medium term. “While the ultimate goal is obviously to drastically reduce our reliance on fossil fuels and natural gas, this will take well over a decade, maybe two or three. And while bringing more renewable energy onto the grid is the correct course of action, building a modern grid which can properly accommodate, transport, and then store this energy (for when the wind doesn’t blow or the sun isn’t shining) is difficult and expensive and will even add to bills in the short term.”
He added that households struggling with high energy costs have options. They can switch to a cheaper supplier, look at ways to use less energy around the home, and if they’re on a smart tariff, they can move their energy to times of the day when it’s less expensive.
“But the Government also has work to do,” Cassidy noted. “I would call on it to reduce the rate of VAT on energy bills further and to consider pausing another hike in the carbon tax.”