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Consumers hit with double gas bill charge

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    Consumers hit with double gas bill charge

    Irish Examiner

    15 November 2006

    @@@@SPAN style="font-weight: bold;">Hidden hike: consumers hit with double gas bill charge@@@@/SPAN>

    By Paul Kelly
    LAST month’s massive hike in gas prices included a hidden rise in supply charges which added 8% to the overall bill, it emerged last night.

    Bord Gáis blamed the 33.8% price increase solely on the rising price of oil. However, it has emerged that the company also increased the annual standing charge by 33.8% — which inflated the overall bill by 8% and added €5 million to the company’s profits.

    The annual average gas bill is now €1,207, which is made up of €864 for gas and €343 for supply costs. Without the hike in supply costs, average bills for the company’s customers would be €87 a year lower.

    Last night, the Consumers’ Association of Ireland (CAI) said only a handful of customers were aware that the 33.8% hike applied to supply charges as well as gas usage.

    “It is unacceptable. The rise in supply charge was never made clear to consumers when the 33.8% rise in bills was first proposed,” said CAI chief executive Dermott Jewell.

    “This additional rise means it’s virtually impossible for consumers to save money by using less gas as the standing charge has gone up 33.8% as well.”

    Yesterday, Bord Gáis defended its decision to hike both supply and gas charges by 33.8%.

    “It’s just the way the tariff is structured but we can understand consumers’ concern,” said Bord Gáis deputy head of supply Paul Kenny.

    “The increase (of 33.8%) applies to the whole of the bill and has been the case since 2003. Had we kept the supply charges fixed then we would have had to increase the rest of the bill — and the rise in gas would have been toward 50%.”

    He insisted that papers before the Government’s Commission for Energy Regulation (CER) — which sanctioned the rise — had made clear the 33.8% increase applied to both elements of the bill.

    The regulator said the hike in the supply charge was justified because Bord Gáis charged too little in the past to cover the costs of distribution, administration and repairs.

    The CER said it was looking at re-forming the supply charge, which means customers have to pay €343 a year irrespective of the amount of gas they use.

    In future, customers could pay a supply charge based on how much gas they burn so light consumer would pay less and heavier users more.

    The rise in supply charge is for the expansion of the cable network, repairs and administration costs while the hike in electricity costs is because of costlier gas used for power generation<!-
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