More than half-a-million households in Northern Ireland will see their electricity bills soar by more than 5% this winter

More than half-a-million households in Northern Ireland will see their electricity bills soar by more than 5% this winter.

Families already struggling will feel the squeeze as inflation continues to hit their pocket while wages are stagnating.

Power NI, Northern Ireland's largest energy company, has announced that it is increasing prices by 5.6% with effect from October 1.

Customers will be contacted by post over the next few weeks.

The Consumer Council described the announcement as "unwelcome but justified".

The hike will cost its average user an extra £27 a year, bringing Power NI's average bill based on 3200KW to £497.

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Power NI put the price rise down to increases in the cost of coal and gas, both used by power stations to generate supply.

This will be the first increase since 2013 and has been agreed with the Utility Regulator. Around two-thirds of Northern Ireland homes will be affected by the announcement.

It comes just a few months after several electricity firms in Britain upped their tariffs.

It's expected that other electricity firms here will follow suit.

However, even with the increase, domestic power here will still cost significantly less than in Britain and the Republic, where currency and a higher rate of VAT makes electricity more expensive.

Stephen McCully, managing director of Power NI, said: "So much is dependant upon world fuel costs, which are outside our control and which have an effect on the price we pay for wholesale electricity.

"We have not increased our prices since 2013, so it is particularly disappointing for us that we have to do so now. However, as we were able to cut our prices over the last four years, a typical Power NI bill will still be roughly £80 less than it was in 2013.

"Unfortunately, we cannot avoid this increase, but what we can do is encourage our customers to take up one of our discount offers, which may help offset it."

The Consumer Council said it recognised it will be "unwelcome news for consumers" but described the hike as "justified".

John French, chief executive of the Consumer Council, said: "Our message to consumers is to review their home electricity costs regularly and to check if an alternative supplier can offer a better deal.

"Households may be able to save up to £112 per year by switching supplier.

"Our online energy price comparison tool makes it easy to compare prices and also explains how simple the switching process can be."

But the move came under fire from some. National Federation of Self Employed and Small Businesses chairman Wilfred Mitchell said the increase was twice the rate of inflation.

He said: "The announcement by Power NI that they will be increasing prices to this extent is disappointing and unwelcome as it adds a further adverse burden to what are already some of the highest operating costs faced by SMEs (small and medium-sized enterprises) at a time of increasing uncertainty.

"Rising costs are already having to be absorbed by business owners, making it increasingly difficult for them to invest, expand and create jobs. This price hike will undoubtedly have a negative impact on economic growth.

"Measures such as progressing the North South Interconnector need to be developed and expedited to help increase efficiency and competition."

Business customers on Power NI's most popular SME and farm tariffs will see a similar increase.

Belfast Telegraph