Energy bills to rise as government discount drops

The Utility Regulator is due to make an announcement on prices on Friday morning

Energy bills for some consumers across Northern Ireland will rise despite major suppliers announcing cuts.

On Friday, Power NI announced a 7.1% electricity price cut and SSE Airtricity announced cuts to gas prices of 12.2% from July.

But customers will not see drops in their bills as the decreases are offset by the end of the Energy Price Guarantee (EPG).

The government support on electricity and gas stops at the end of this month.

This means bills for Power NI customers will rise by 5.1% and for SSE Airtricity consumers by 10.6% from July.

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Overall, typical energy bills were lower in Northern Ireland during the winter period than in Great Britain.

The Energy Price Guarantee (EPG) started in Britain in October and one month later in Northern Ireland, which meant there was backdated support which has now come to an end.

From January to March 2023, energy bills in Northern Ireland were being discounted by up to 13.6p per unit for electricity and 3.9p per unit for gas.

That support was reduced from April to June 2023 - bills were discounted by up to 3.8p per unit for electricity and 2.6p per unit for gas.

The EPG will drop from approximately £454 per year in discount for the average household, to £0 from 1 July 2023.

Power NI's announcement will add about £49 a year on to the typical household bill

In Northern Ireland the Utility Regulator imposes price controls on the major incumbent suppliers: electricity firm Power NI, SSE gas in greater Belfast and Firmus gas in the so-called Ten Towns network.

The regulator approves the maximum tariffs based on the costs for providing the service and a small profit margin.

Chief Executive of the regulator John French said the reduction was as a result of recent falls in "forward wholesale energy prices".

But he added this unfortunately coincided with the withdrawal of government support.

Power NI is the largest electricity supplier in Northern Ireland with around 479,000 domestic electricity customers.

Its announcement will add about £49 a year on to the typical household bill.

Power NI Customer Solutions Director William Steele said: "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.".

SSE Airtricity Gas Supply serves about 195,000 customers in the Greater Belfast area

SSE Airtricity Gas Supply serves about 195,000 customers in the Greater Belfast area and 3,200 customers in the Gas to the West area.

Its announcement will add about £134 a year on to the typical household bill.

SSE Airtricity General Manager (NI) Andrew Greer said the supplier was pleased to be delivering on its promise to reduce prices as soon as possible.

He added: "We know energy costs are a primary concern for customers across Northern Ireland and the last 18 months have been a difficult period for everyone who is trying to manage the impact of the cost of living crisis."

'Strange situation'

Director of Infrastructure and Sustainability at the Consumer Council Peter McClenaghan, said: "This strange situation is also likely to lead the other local energy suppliers to change their tariffs in the coming days and weeks."

Meanwhile, data from the NI Consumer Council suggests the price of home heating oil has fallen back to levels last seen in January 2022.

A majority of households in Northern Ireland still use oil to heat their homes

The council's research estimates that the average price of 500 litres this week was just below £280.

In the immediate aftermath of Russia's invasion of Ukraine the price of 500 litres spiked to £660 and cost £400 - £500 for most of last year before starting to fall in the early months of this year.

A majority of households in Northern Ireland still use oil to heat their homes.

Last month experimental data from the Office for National Statistics (ONS) suggested that the falling price of heating oil meant NI was experiencing a lower rate of inflation than the UK as a whole.

The ONS said that in March the UK inflation rate was 10.1% while the rate in Northern Ireland was estimated at 7.5%.