Energy companies accused of ‘short-changing’ consumers after huge drop in wholesale costs

Calculations based on figures from the Central Statistics Office (CSO) show that wholesale electricity costs are down by 78pc since their peak in August 2022.

But prices for households have only come down by between 20pc and 25pc.

Today's News in 90 seconds - 22nd March 2024

Most energy companies have announced two or more price cuts for consumers, with the larger players resisting calls for larger price reductions.

The CSO figures show that in February wholesale electricity prices fell by 15.3pc when compared with the previous month.

In the last year wholesale prices were down 46.8pc.

Calculations by this publication show that wholesale prices are now down 78pc since they peaked in August 2022.

Chairman of the Consumers Association of Ireland Michael Kilcoyne accused electricity suppliers and the Government of “fleecing” households.

“We are being short-changed. The industry and the Government, with its Vat and other levies on electricity, are taking us for fools. Consumers are being fleeced,” Mr Kilcoyne said.

Daragh Cassidy of Bonkers.ie confirmed the Irish Independent calculations that wholesale electricity prices are down 78pc since August 2022.

At the same time consumer prices have only fallen by between 20pc and 25pc.

However, he pointed out that not all of the rise in wholesale costs was passed on to consumers.

He said: “Wholesale electricity prices continue to ease largely on the back of falling wholesale gas prices as well as strong wind output.

“However, they still remain high by historical standard.”

Mr Cassidy said wholesale prices are now at their lowest level since the start of 2021 before a host of events caused prices to skyrocket over the next two years.

This included a wind drought during the summer of 2021, prolonged outages at two of the country’s biggest power stations for much of that same year, lingering Covid-related supply chain issues, and then the outbreak of war in Ukraine at the start of 2022.

Mr Cassidy said that due to hedging it takes time for price decreases on wholesale markets to feed through into lower bills for consumers.

He said wholesale prices only make up around half of the final cost of electricity for consumers. Government tax and levies, costs for the distribution of electricity into people’s homes, and supplier operating costs and profit margin also need to be factored in.

“However, if wholesale prices remain close to where they are, it’s highly likely we’ll see another round of price cuts in the second half of the year of between 10pc to 20pc,” Mr Cassidy said.

Mr Cassidy said this comes on the back of two rounds of price cuts over the past six months that have seen electricity bills fall by around 20pc to 25pc.