Energy Price Increases

A copy of this was sent to the Irish times, the Tainaiste, and ICTU.

26th July 2008


Madam

It is with noted interest I read the report that the Commission for Energy regulation has sanctioned a 20% increase in gas prices. Your report states the average domestic gas bill is €822 per annum. My annual bill is around €1500 for a small 2 bed roomed home in Dublin, which is home to just 2 people which mean an increase of around €300 or twice the reported figures. We use gas for heating and cooking. We are an average couple, both working day time jobs which means we really should be paying the average €822 per annum. Something tells me there is an element of spin in these figures to report a smaller level of increase on the consumer.

There are a number of significant factors regarding this increase. We bought into natural gas as an economical green alternative to burning fossil fuels. At the current rates we will have to consider returning to the open fire as our source of heating.

Another factor that can not be ignored is how the gas and electricity price increases will fuel the spiral of inflation that will inevitably follow these. The affects of these increases on people will affect the ability of the social partners to strike a deal as the rate of pay increases required to cover these increases will invariably have to be factored into any possible agreement. These will be resisted by employers and in turn it will almost inevitably be rejected by the trade unions memberships, and a free for all wage bargaining will ensue, and then the employers will really have something to worry about. IBEC et al should condemn these increases and put pressure on the energy companies to refrain from these increases. These energy companies are large enough to weather a reduction in incomes at least in the short term, and they should do so, not hide behind the cloak of the regulator as though once the increase is granted they have to increase prices, they don’t and they should not increase their prices, (in the national interest of course).

There is another factor which intrigues me, and it’s the role of the Commission of Energy Regulation. In my naivety I believed the regulatory processes existed to protect the interests of consumers. These actions clearly demonstrate the interests of the consumer are being completely ignored, and the regulations are only serving the interests of big business.

The issue of industry regulation must be overhauled completely to reflect the consumer’s interest.

Regards etc
John Fitzpatrick