Electricity users will face price increases next year of up to €1.75 per month on bills to pay for a major upgrade to the national grid, which could cost almost €19bn.
The regulator for the sector, the Commission for Regulation of Utilities (CRU), has sanctioned increased spending of an initial €13.8bn by ESB Networks and EirGrid, the body which manages the electricity network.
If the two organisations meet regulatory targets, the CRU will allow the spending increase to €18.9bn over the coming five years.
Initially, €1 will be applied to bills every month before VAT. But this could rise to €1.75 if spending is allowed to rise to €18.9bn.
Domestic users will pay 55% of the costs and businesses 45%.
Network tariffs charged to electricity users make up 25% to 30% of an average customer’s bill.
The upgrade to the grid will facilitate the building of 300,000 new homes by 2030, the connection of one million electric vehicles and 680,000 heat pumps to the grid.
It will also be used for electrification of public transport projects, including Dublin’s MetroLink and increased use of electric buses.
The grid will be upgraded to prepare for climate change and storms, and reinforced to handle increased power from wind and solar power.
The State is investing a total of €3.5bn and between €4bn and €5bn will be raised on the bond market.
It will result in 520 different capital projects. Among them will be 29 major transmission infrastructure projects, 27 major distribution substations, 80,000 pole replacements and hundreds of kilometres of overhead and underground lines.
Minister for Energy Darragh O’Brien said the investment “would be the largest investment in the electricity grid since rural electrification”.
The CRU said it will monitor ESB Networks and EirGrid’s delivery to ensure customers’ money is spent responsibly.
There are currently almost 300,000 electricity users in arrears and the Government did not include one-off credits in October’s Budget.
Latest figures from the Central Statistics Office show electricity prices have increased by 5% over the past year.
The CRU’s Commissioner Fergal Mulligan said: “Changing supplier is one of the fastest and most effective ways for customers to lower their energy bills.”
He said people who move to the lowest tariff could have saved almost €2,500 over the past four years.
He added: “Customers could also move to a Time of Use tariff which you can avail of if your smart meter has been installed, to use less expensive electricity at different times during the day that suits their needs.”
He said there were also projections in place for vulnerable consumers.