Utility Regulator comment on firmus energy’s gas tariff announcement

02 March 2021

firmus energy has today announced a 17.75% increase to its regulated gas tariffs for domestic and small business customers[1] in the Ten Towns area. This change in tariff will be effective from 1 April 2021.

Commenting on the announcement, John French, Utility Regulator Chief Executive said:

“In February 2021, firmus energy submitted a request to the Utility Regulator to increase their Ten Towns regulated tariff by 17.75% or £78 per year. Following a detailed regulatory examination of the company’s gas purchasing strategy, operating costs and regulatory reserves[2], we have accepted firmus energy’s submission.

“This increase reflects a significant rise in the cost of wholesale gas over the last year. For example, the price of wholesale gas traded on the ‘day ahead’ market has nearly doubled since January 2020.

“After this increase, the average firmus energy bill in the Ten Towns licence area will now be £518 per year. This compares to the annual average gas bill in GB of £536 and £685[3] in RoI.

“We expect all suppliers in Northern Ireland to set their prices competitively and treat their consumers fairly. We will continue to proactively review wholesale energy costs and should these decrease, we will act to ensure that regulated companies reflect this in consumer bills.

“We recognise that many households in Northern Ireland are struggling with the impact of Covid-19. We have been working with the energy industry and the Consumer Council to ensure consumers are supported through this difficult time. I would encourage anyone who is worried about their energy bill to contact their supplier and access the help and support that is available.”

Further information on the support available to energy customers is available at www.nidirect.gov.uk and within the consumer protection section of the Utility Regulator’s website. The Consumer Council’s website has energy advice for consumers during these difficult times and also provides an independent energy price comparison tool to help consumers save money.

A number of agencies can provide free and independent advice, including Advice NI, Money and Pensions Service and Christians Against Poverty. There is also more information on support for natural gas customers from the new gas industry website.

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

A briefing paper on the tariff review has also been published.

[1] Business customers using less than 2,500 therms per annum.

[2] Also referred to as over/under recovery. An explanation on these costs is provided in the briefing paper.

[3] Exchange rate of 0.888 rate used in calculation.

For further information, please contact Adele Boyle on 07787 279584.

Notes

  • This tariff review commenced in February 2021 and covers around 51,000 domestic and small business customers in the Ten Towns area.
  • The previous tariff was effective from 1 October 2020 and included a 12.5% decrease.
  • The firmus energy average domestic standard credit tariff is 3.28% lower than the default tariff cap level in GB. Both have VAT rates of 5%.
  • This firmus energy average domestic standard credit tariff is 24.28% lower than the Bord Gais standard gas tariff in the RoI. This difference is between both tariffs inclusive of VAT at 13.5% in RoI and 5% in NI.
  • The Ten Towns and greater Belfast area are two separate markets, with different distribution network operators and different network use of system costs.
  • The Ten Towns area refers to firmus energy’s distribution network and includes: Derry/Londonderry, Limavady, Coleraine (including Portstewart and Bushmills), Ballymoney, Ballymena (Broughshane), Antrim (including Ballyclare and Templepatrick), Craigavon (including Portadown and Lurgan), Banbridge, Newry (Warrenpoint), Armagh (Tandragee) and more than 25 other towns and villages in the surrounding area.
  • The Greater Belfast area covers: south, west, east and north Belfast; Carrickfergus; Newtownabbey; Duncrue and Harbour; Lisburn; Carryduff; Castlereagh; Newtownards; Larne; and North Down.