Electricity bills increase to 'compensate' for recent reductions

With energy prices in the first six months of 2014 being 30 per cent lower than at the end of last year - and 32 per cent less than the government's fixed prices - residents who have overpaid have been receiving refunds in their bills.

But from Tuesday (July 1) to the end of the year, consumers will pay on average 8.5 per cent more than they are now.

A sliding scale of increasing prices 'to compensate for reduced costs' back in January means that by December, utility bills will only have gone down by three per cent on average over the whole of 2014.

This year started with wholesale electricity 'pool' energy prices of 47.59 euros per megawatt per hour (MWh), which the government 'provisionally' increased in January to 48.48 euros after calling off what would have been the most-recent energy supply 'auction', a procedure previously carried out roughly every three months.

For the first six months of 2014, the average price per MWh was 32.98 euros, although June has closed with a cost of 51.66 euros.

Heavy use of wind and hydraulic energy over this period is thought to have brought prices down.

Actual energy use, or the cost of electricty consumed, only makes up 37.48 per cent of the final bill, of which the remainder comprises 41.14 per cent in standing charges and 21.38 per cent in taxes.

Standing charges went up by 0.9 per cent early this year.

Over July, August and September, electricity will cost 54.40 euros per MWh to wholesalers and, from October to December inclusive, 48.65 euros.

Despite the planned hike, the government says the extra money clawed back will not make up for the sudden decrease in January, nor will it make much of a dent on the multi-billion debt the State has with supply companies and which is invariably passed on to the consumer.