Northern Ireland’s biggest energy supplier, Power NI, is to increase household electricity bills by 4%.

The move, affecting more than 500,000 homes in the region, will come into effect at the start of December.

The price rise, which is the first in two years, comes after four successive cuts in the tariff.

A typical customer will see their bills increase by about £38 per year.

Power NI said the decision reflected increases in market operation and network-related charges.

The tariff change has been approved by the Utility Regulator and applies to domestic customers only.

Power NI is the only price-controlled electricity supplier in Northern Ireland.

William Steele, director of Power NI Customer Solutions, said: “We work hard to keep our prices as low as possible.

“However, wholesale prices remain high and significant increases in third party market operation and network-related costs have regrettably necessitated a tariff increase.

“In these challenging times, we have held off changing prices for as long as possible and we have been able to keep our tariffs below the equivalent GB and RoI average.”

A review by the Utility Regulator determined that a 4% increase was needed.

Leigh Greer, head of security of supply and markets regulation at the Utility Regulator, said: “The main reason for this tariff change is due to an increase in costs related to the market and operation of the electricity network.

“As we continue to strive to meet Government climate change targets, and to ensure security of supply, there has been a need to invest in grid infrastructure to facilitate renewable energy sources.

“In addition, we have seen significant increases in wholesale gas costs globally as a result of the ongoing conflicts in the Middle East. Wholesale gas prices affect the cost of electricity because 45% of electricity is generated with gas-fired power stations.

“The average price of regulated electricity for households in Northern Ireland is around £80 cheaper per year than in Great Britain, and around £180 cheaper than in Ireland.”

Karen Smyth, from the Northern Ireland Consumer Council, said: “While this is unwelcome news, we are aware the main driver for this is an increase to market operation and network costs, unfortunately this is being passed unto consumers.

“This is the first tariff increase from the regulated Power NI in two years and the Consumer Council work closely with the Utility Regulator to ensure consumers are protected and supported, and no unnecessary costs are added, or additional profits are made by the supplier.

“We know from our research that most consumers in Northern Ireland are still really worried about home energy prices.

“We urge anyone who is struggling to pay their electricity bills or top up their keypad meters to contact their supplier directly for help and support.”