Energy firms have announced price cuts today - but householders won’t see their bills come down thanks to Government intervention money being scrapped.
Power NI will reduce its domestic electricity tariff by 7.1%, while SSE Airtricity gas supply’s tariff for domestic and small business customers is reducing by 12.2%. These decreases will become effective from July 1.
But at the same time the Government’s Energy Price Guarantee of around £454 a year for the average household is being cut to zero, also from July 1.
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The Northern Ireland Utility Regulator says that with the EPG gone Power NI customers will actually see their bills go up by 5.1%, while SEE customers will experience a 10.6%.
Regulator John French said: “The reduction to the underlying regulated tariff is a direct result of the recent falls in forward wholesale energy prices, after the huge increases that were seen following Russia’s invasion of Ukraine in February 2022. Unfortunately though, these tariff decreases coincides with the removal of the financial support provided through the UK Government’s Energy Price Guarantee (EPG) scheme.
“The EPG scheme was brought in by the UK Government in November 2022 to help Northern Ireland households with high energy. As the cost of wholesale energy has been steadily reducing, the UK Government have decided to reduce the value of the support scheme to zero from 1 July 2023.
“Although the underlying wholesale price of energy has significantly reduced over the last few months, it still remains twice the price of historic norms. For example, the forward gas price is currently around £1.20 per therm, whereas before the Russian invasion, it was around 50 to 60 pence per therm.”
William Steele, Director, Power NI Customer Solutions, said: “As prices have continued to fall, Power NI has welcomed another chance to further reduce its underlying unit prices for customers, with our third tariff reduction of the year. Despite this good news, the decision by the UK Government to remove its Energy Price Guarantee support means that unfortunately customers will see an overall increase of 5.1% in prices.”
Power NI’s price change will affect over 474,000 households. The Consumer Council says that when their decrease and the EPG cancellation is applied “the typical standard Power NI credit bill will increase by around £49 and Power NI customers with a prepayment meter will see their costs increase by around £48 a year”.
They added that for SSE customers their bills “will increase by around £134 and customers with a prepayment meter will see their costs increase by around £136 a year”.
Peter McClenaghan, Director of Infrastructure and Sustainability at the Consumer Council said: “These tariff decreases are welcome news as they indicate a downward trend in wholesale energy prices. However, as the Government subsidy to our bills, the Energy Price Guarantee, is being reduced to zero from July, customers will actually see their bills increase.
“This strange situation is also likely to lead the other local energy suppliers to change their tariffs in the coming days and weeks. This means it is important that consumers consider whether their current tariff remains competitive.
“The Consumer Council’s free online Energy Price Comparison Tool enables consumers to compare all available tariffs. Consumers should use this tool regularly to check that they are on the best tariff for their needs, as money can be saved by switching supplier, tariff, or billing method.”
The Consumer Council says it provides support and advice online including an overview of all financial help, grants, and schemes that are currently available to consumers here: www.consumercouncil.org.uk/costofliving/energy.
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