Major blow for households as electricity bills to rise by 14% despite Power NI dropping tariff prices by 16.2%

Northern Ireland’s largest electricity supplier, Power NI, has announced a price cut - but says it will be cancelled out by a reduction in the Government’s Energy Price Guarantee.

The company’s domestic electricity tariff will be reduced by 16.2% (6.61p per unit) from April 1, due to a fall in wholesale market costs.

However, the UK Government’s Energy Price Guarantee (EPG) Scheme support will also reduce by 10.33p per unit and this will result in overall tariffs increasing by 3.72p per unit or 14%.

As a result, the typical standard Power NI credit bill will increase by around £119 and Power NI customers with a prepayment meter will also see their costs increase by £116 a year.

Power NI is the only domestic electricity supplier in Northern Ireland who is price-regulated, providing customers with an additional level of safeguarding, as tariffs are only adjusted through a Utility Regulator validated formula. This is the second Power NI underlying tariff reduction in 2023.

The UK Government has announced it is reducing the level of Energy Price Guarantee (EPG) support given to all domestic customers in Northern Ireland.

William Steele, director, Power NI Customer Solutions, said: “A decrease in wholesale energy prices has enabled Power NI to again reduce its underlying unit price. However, the recent change by the UK Government to its Energy Price Guarantee means that a lower level of scheme discount will be applied to all electricity bills. Unfortunately, this means customers will see a 14% increase in prices.

“We understand that some customers may be worried about paying bills. We would ask for any concerned customers to contact us directly and we will help you.

“As well as working directly with customers, we will continue to work closely with our charity partners and other key stakeholders, to ensure the most vulnerable in our society and those who are struggling get the help they need.”

In response Kevin Shiels, interim chief executive at the Utility Regulator, explained: “In January 2023, the Utility Regulator commenced a review process with Power NI of its regulated tariff for domestic electricity customers. This tariff review forms part of our regular scrutiny to make sure that consumer bills reflect the actual cost of providing electricity to homes in Northern Ireland.

“Power NI’s underlying costs have fallen, including their energy wholesale costs. However, whilst our review has resulted in a 16.2% decrease to Power NI’s underlying regulated tariff, the actual change customers will see from April 1 2023 is an increase of 14%. This is due to a reduction in consumer financial support provided through the UK Government’s Energy Price Guarantee (EPG) scheme.

“The EPG scheme was brought in by the UK Government to help households with high energy prices over the winter. However, as the cost of wholesale energy is now reducing, so too is the level of support being provided by government. This means there will be a lower level of discount applied to all electricity and gas bills from 1 April 2023.

“The reduction to Power NI’s regulated tariff, which is a direct result of the recent falls in forward wholesale electricity prices, is welcome, but we understand that customers will be disappointed not to see this in their bills.

“When the new tariff takes effect on 1 April, Power NI’s average domestic credit customer (with the EPG discount applied) will pay £966 a year, compared to the GB electricity Price Cap of £1366 per year. This means that the typical Power NI domestic customer’s annual bill will be 29% lower than the equivalent in Great Britain and 42% less than RoI.

“We will continue to monitor Power NI’s regulated electricity tariff and ensure any further falls in costs are passed through to customers at the earliest opportunity.

“If you are worried about paying your energy bill, please contact your electricity or gas supplier in the first instance, to make them aware of your circumstances, and discuss the options available. In addition, there are a number of agencies who can provide free and independent advice to households, including Advice NI, Christians Against Poverty, the Consumer Council and Money and Pensions Service’s MoneyHelper.”

Peter McClenaghan, director of Infrastructure and Sustainability at the Consumer Council, added: “It is welcome news that wholesale energy prices are coming down allowing Power NI to announce a second price reduction for its customers so far in 2023. However, as this is happening at the same time as changes to the level of the Energy Price Guarantee, consumers’ bills will increase.

“This strange situation is happening because the additional back-dated EPG support consumers here were receiving is ending. The additional support had been provided because the EPG was introduced later in Northern Ireland.

“Due to the change in EPG, it is likely that the other four unregulated electricity suppliers in Northern Ireland will increase their prices, accordingly, meaning that consumers should consider reviewing their tariff in the coming months to ensure they are on the best deal for their needs, as money can be saved by switching supplier, tariff, or billing method.

“We know from our pulse survey that most consumers in Northern Ireland are still really worried about home energy prices. We urge anyone who is struggling to pay their energy bills or top-up their meters to contact their supplier directly for help and support.”

The Consumer Council’s free online Energy Price Comparison Tool lets consumers see all available tariffs from all suppliers in one place. Consumers should use this tool regularly to check that they are on the best tariff for their needs, as it is likely that price changes will be announced in the coming weeks.

The Consumer Council’s website also contains information on energy efficiency, and an overview of all financial help, grants, and schemes available to help with high energy costs.

This tariff announcement marks the conclusion of a review undertaken by the Utility Regulator and Power NI, in consultation with the Department for the Economy and the Consumer Council for Northern Ireland.