Small business unhappy about Power NI price increases

Ulster’s main power supplier, Power NI, has recently raised the cost of its power and many small businesses have complained that they are going to be badly affected by the price rise which is coming into effect on October 1st. The company announced that its customers will be seeing a near 20% increase in the cost of their electricity.

Fivemiletown Creamery is a business in the area and the director, Mervyn McCaughley has said, “This is going to significantly raise our overhead costs and prevent some of our future growth. This will in turn mean we cannot employ more people. Furthermore, we are trying to expand to international markets and this increase in the cost of power may mean we struggle to do this.”

Ian Marshall is the deputy president of the UFU and has said, “this price rise is going to negatively affect many of the farmers in the area. Some farmers are changing to alternate suppliers, but many have been with Power NI for such a long time that they find changing over very difficult, even when facing such a price rise.” Marshall went onto criticise Power NI, “They claim the rise is due to us having been protected from rises for so long. It just seems that they are actually doing this to increase their profit margins.”

The cost of diesel has recently risen by near to 25% and fertiliser has gone up by 40%. The price of wheat has jumped the most with an 85% rise in cost. All these factors taken together has meant that the price that it costs to make food has increased substantially while the price of food has remained relatively stagnant due to very little food price inflation. The hike in the price of power is going to make this situation even worse for Ulster’s farmers.

Head of Northern Ireland Manufacturing is Bryan Gray, he has said, “this price increase will affect over 3,000 small manufacturers. It is a great shame that we are seeing this price increase at the same time as the many other increases for different products.

“The cost of energy is one of the most expensive for businesses, only being behind the purchase of labour and raw materials. Because of the way tariff pricing works, even if the price of world energy fell substantially businesses would not see any drop in price for an entire year.” Some people are on a variable tariff and for them a fall in price would be beneficial.

The reason this will be particularly damaging to small businesses is because the larger companies will purchase power directly from the market so are unaffected by the increase. Wilfred Mitchell who is from the Federation of Small Businesses has said, “It’s surprising that these increases have come at a time when oil prices are at their lowest in months. The government needs to take action against these kind of price hikes or small businesses are going to continue to suffer.”