We thought that with the regulation of the energy sector and a new system being put in place after the Government stepped in that, that would be the end of our electricity bill increase nightmares and the service would resume some kind of normality. That’s what we were led to believe, but that quite possibly is not the case.
Despite the fact that consumers received a refund last quarter after electricity companies were found to have estimated the price of electricity too high, it looks like that nice little reimbursement will be going straight back to the electricity companies this quarter.
The official price of electricity, as registered by the Department of Industry was set at 48.5 euro per megawatt per hour during the first quarter, but now, nearing the end of the second quarter when the price for the following quarter will be set, it’s not looking good.
From 1 July we will be paying for our electricity at a new rate. The current cost of electricity has increased from 48.5 euro at the end of March to 60 euro per MWh in the last few days, and a quarterly average of 55 euro per MWh.
The rise is more exaggerated when you realise that the first quarter of 2014 ended with a rate of 24 euro per MWh, which was actually 51% less than the Government’s estimate. Now, however, electricity prices exceed the reference figure given when calculating prices for this transition period by 20%.
Even before the Government stepped in to regulate the system, electricity companies warned of how volatile this new electricity-pricing system could be. And, they weren’t the only ones. The CNMC, the market’s regulatory organisation, was also worried about how much prices could fluctuate from one day to the next.
So, it looks like yet again we’ll be paying more for our electricity, and, no doubt, excuses will be made as to why.
In 2013, the cost of electricity rose by 8%. The Government tried to placate consumers by saying reassuring them that this year the increase would be less. That is yet to be seen.
Whilst it is normal for the cost of living to go up over the years, the price of electricity has gone through the roof. In 2003, an average household paid 360 euro a year to power the home. That figure is now around 615 euro – not including the price hike for this year.
And while the Government has tried to alleviate the situation by getting rid of the quarterly auctions that were a reference point to set our electricity bills by, the new PVPC (voluntary price for the small consumer), in place from next week, will be governed by the smart meter, which each household will have installed in their home by 2018.
The power companies are trying to offer the customer a set price each month, but the CNMC believe that the monthly sum is too high, even though it does guarantee stability each month.
Once again, how much we have to pay for our electricity is in the hands of the power companies, and the rise in the market value over the last few months is an indication that we could indeed be forced to pay more. That is unless the Government steps in again as they did last year to prevent an 11% increase in our monthly bills.