Utility Regulator comment on Firmus Energy’s regulated gas tariff increase

Commenting on this increase, John French, Utility Regulator Chief Executive said:

“In late December 2021, we received a submission from Firmus Energy to undertake an ad-hoc review of their regulated Ten Towns tariff for domestic and small business[1] consumers. The review took place against a continuing increase in wholesale gas prices, which have risen significantly since Firmus Energy’s last tariff increase on 3 December 2021.

“We have now analysed and evaluated Firmus Energy’s submission and consulted with the Department for the Economy and the Consumer Council for Northern Ireland. This review has unfortunately concluded that a 33.57% increase from 24 February 2022 is needed to reflect the ongoing and exceptional price spikes that have been experienced in the global wholesale market.

“This will regrettably mean that the average annual household gas bill[2] in the Ten Towns licence area will increase to £1,293 per year.

“The unparalleled increases in the cost of wholesale energy at a global level have persisted and continue to impact on supplier costs. This has been exacerbated by the overall volatility within the market, with significant price movements occurring on a daily basis.  

“Unfortunately there appears to be no end in sight during 2022 for significantly above trend wholesale prices. However, if wholesale prices begin to reduce, our system of regulation in Northern Ireland allows us to act to make sure that reductions are fully passed onto consumers as quickly as possible.

“We are extremely aware of how this further energy price increase will affect consumers in Northern Ireland. We established a working group with the Department for the Economy, Department for Communities and the Consumer Council for Northern Ireland to actively explore what practical measures can be brought forward to alleviate the burden of these higher prices on consumers, this winter. I am pleased that the Northern Ireland Executive has provided significant funding to support local energy consumers.

“I have written to all energy suppliers and reminded them of their regulatory obligations to avoid customer disconnections and consider other approaches to protecting customers in debt. We are also following this up with individual meetings with all energy suppliers, to ensure they are doing all they can to support their customers.

“I would encourage anyone worried about paying for their energy bill to contact their supplier as soon as possible. There are also a number of agencies who can provide free and independent advice, including Advice NI, Money and Pensions Service and Christians Against Poverty.”

A briefing paper has also been published. 

Media contact - Adele Boyle on 07787 279584.

Additional notes: 

  • This tariff review commenced on 21 December 2021 and covers around 59,000 customers in the Ten Towns area.  
  • The average domestic credit customer will see their bills increase by around £324 per year and the average domestic bill will rise to £1293 per year.
  • The firmus energy standard tariff will be 106.46% above the GB default tariff cap level.  Both have VAT rates of 5%.
  • The firmus energy standard tariff will be 44.71% higher than the Bord Gais standard gas tariff in the RoI. This includes VAT at 13.5% in RoI and 5% in NI. Exchange rate of 0.84 used in calculation.
  • The Ten Towns and Greater Belfast areas 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.

[1] Business customers using less than 73,200kWh per annum.

[2] Average domestic customer using 12,000kWh per year.