The Commission for Electricity Regulation has announced average increases of 8.6% in the charges for electricity supplied by the ESB.
Following a review, the regulator approved increases of 8.9% for domestic users. As the average two-monthly domestic bill is £65, this will mean a £5.70 rise in the average household bill. The new charges will be effective from the October/November billing period.
Increases of 3% for small businesses were approved, but medium-sized businesses face 13% higher charges, while the rise for large businesses is 14%.
Large companies - and some medium-sized firms - are known as eligible customers, which means they can get electricity cheaper from other suppliers.
The average unit price for small businesses will rise by 0.26p per kilowatt hour. For medium-sized firms the increase is 0.83p, for large firms 0.59p.
The regulator said he would have to revisit electricity charges next year, including those for domestic users. He said the domestic increase was only half of what would be needed for a full rebalancing of domestic and business charges.
Apart from a 3.5% rise in 1996/97, there have been no increases in Irish electricity prices since 1986. This means that real electricity prices have fallen by 50% in the last 15 years.
The Commission estimates that the increases will have a negligible impact on inflation. It adds that Irish electricity prices are still around 10% below the European average after these increases.
The CER said there had been 'substantial under investment' in Ireland's network infrastructure, which is coming under increasing pressure, and approved £17bn of capital investment over the next five years, compared with £700m in the last five years.
In the review, the ESB asked for operating costs of £3.2bn, but the CER decided that 'significant reductions in costs and increased efficiencies' were warranted and trimmed ESB costs to £3bn.
The Chambers of Commerce of Ireland (CCI) said the increased electricity prices were a cause for concern.
CCI President, Joe Kenny, said: 'We welcome the fact that the Electricity Regulator took the special position of small business into consideration but we are concerned at the size of the hike for larger businesses. This will increase costs and erode competitiveness further at time when business is facing mounting pressure.'
CCI also has growing concerns about the ability of the electricity
infrastructure to meet the needs of the economy.
