Electric Ireland has announced it will cut energy prices for SMEs from next month, but there will be no cuts for residential customers.

The company will cut electricity prices by 10% and gas prices by 15% for small and medium enterprises from 1 March following significant reductions in the wholesale price of electricity, which fell 41.4% last month.

The wholesale price of electricity was around 20% lower in January than it was at the same time last year before the market experienced rapid inflation in the wake of Russia's invasion of Ukraine.

A spokesperson for the ESB-owned firm said successive price increases in the past 18 months had been driven by wholesale gas costs which have "increased by many multiples," and that while the wholesale markets have fallen in recent months “they remain at levels substantially higher – at multiples of their levels – prior to the crisis”.

He added that energy suppliers “typically hedge energy costs in advance to secure costs for the upcoming year, so any increases or decreases in the wholesale market can take some time to feed into retail prices seen by residential customers.

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“The lag between movements in the wholesale market and movements in retail prices is a function of both the rate of change in the wholesale market, and the tenure of forward hedging contracts for electricity and gas”.

Electric Ireland informed business customers that the exact price changes will vary depending on the price plan they have and how much energy they use.

Pinergy last week became the first company since the crisis to lower energy prices, but Electric Ireland was still the cheapest supplier in the Irish market following the announcement.

Minister for Housing Darragh O'Brien last week encouraged other providers to lower prices with the government due to pay another €200 electricity credit next month.

(Pic: Alex Yeung/Shutterstock)