SSE Airtricity announces 7.6% gas price increase in Northern Ireland from 31 March
SSE Airtricity, Northern Ireland’s market-leading provider of natural gas, is today announcing a 7.6% increase in its regulated natural gas prices from 31 March 2017 for home and small business customers.
The price increase means a typical household natural gas customer will see gas costs rise by £36 annually, equivalent to around 10 pence per day1. The increase has been examined and approved by the Utility Regulator.
The change in gas prices is as a result of a rise in external costs outside of SSE Airtricity’s control, including sustained increases in global wholesale gas costs which have risen by over 50% in the last 12 months2.
This is the first increase in SSE Airtricity’s regulated gas prices in Northern Ireland since April 2013 and follows a four-year period during which SSE Airtricity has either held or reduced its standard prices. Since April 2015, SSE Airtricity has cut its gas prices by over 25%, reducing the average household gas bill in that period by £1603. After today’s announcement, the average SSE Airtricity household gas bill is still £124 cheaper than it was two years ago.
Today’s announcement follows the annual review by SSE Airtricity of costs associated with its regulated natural gas business. This gas price review, which is conducted at this time every year, was completed by SSE Airtricity in consultation with the Utility Regulator, the Department for the Economy, and the Consumer Council of Northern Ireland (CCNI)4.
Andrew Greer, General Manager of SSE Airtricity Gas, said:
“We’re sorry we have to increase gas prices at this time however in the last year wholesale natural gas prices on global markets have increased by more than 50%.
“Despite the scale of these external cost increases we’ve been able to use our expertise and buying power on wholesale energy markets to help reduce the impact of these global cost changes on our customers’ bills. In addition, we’re passing back over-recovered costs to customers in line with the regulatory mechanism that applies, helping to further reduce the impact of this price change.
“The average SSE Airtricity household gas bill is still £124 cheaper than it was two years ago and this change has been examined and approved by the Utility Regulator.
“As always, we will continue to do everything to ensure we consistently deliver value to our customers in their gas supply, provide the greatest possible help and the outstanding service that our customers expect from us.”
The price change will apply to 141,000 SSE Airtricity home and small business customers or around 75% of the natural gas market in Greater Belfast5.
In line with the Utility Regulator’s final determination on the SSE Airtricity regulated gas Price Control, published in November 2016, tariffs for Medium-sized Commercial (IC2) customers are being deregulated as SSE Airtricity is no longer in a dominant position in that segment5. These customers will transition to the company’s deregulated commercial tariffs from 1 April 2017 and SSE Airtricity will contact each of these customers on an individual basis in due course.
- Equivalent cost of price increases based on a household natural gas customer on standard 24hr credit meter tariffs (Home Energy Standard) with typical annual consumption of 12,500 kWh. Figures rounded to the nearest Pound value and are inclusive of VAT. Actual costs vary according to meter type, individual tariff and consumption.
- 51.163% change in forward global wholesale gas costs based on 12 month comparison of UK Natural Gas Futures, 1 April 2016 (30.944 pence per therm as at 23 February 2016) and 1 April 2017 (46.776 pence per therm as at 22 February 2017); source: Intercontinental Exchange (NYSE: ICE)
- Quoted saving of £159.86 in SSE Airtricity regulated gas prices since April 2013 based on two year price freeze to April 2015 combined with7.8% (£49.42) price reduction on 1 April 2015, 10% (£57.61) price reduction on 1 October 2015, and 10.2% (£52.83) reduction on 1 April 2016.
- Under the annual Natural Gas Price Control review process, the setting of SSE Airtricity’s regulated natural gas prices, including any changes to those prices, require the Utility Regulator’s formal approval. Annual price changes, if they are to be applied, take effect from 1 April each year. The Price Control process also allows for an interim or 6-month review by the Regulator of SSE Airtricity’s natural gas tariffs with any mid-year price changes, if required, taking effect from 1 October each year.
- SSE Airtricity provides natural gas to 141,364 Domestic and Small Industrial & Commercial customers in the Greater Belfast area (73.5% market share) and 1,066 Medium-sized Industrial & Commercial customers (38.5% market share). Figures quoted based on latest Retail Market Monitoring Quarterly Transparency Report Q4 (Oct-Dec) 2016 published by the Utility Regulator, February 2017.