The announcement that the energy regulator has directed Bord Gáis and ESB to amend their prices for 2007 was met with mixed reactions yesterday.

Bord Gáis will reduce gas prices by 10 per cent with effect from February 1st, following agreement with the Commission for Energy Regulation.

ESB will increase electricity prices by 12.6 per cent for its domestic customers on January 1st. This is 7.1 per cent less than the price increase previously approved by the regulator.

It is believed that ESB could have absorbed a larger reduction, but the commission wanted to ensure that the independent electricity generation sector would be able to generate a sufficient return.

Employers' group Ibec welcomed yesterday's price revisions. However, David Manning, Ibec energy executive, said that there is still room for improvement. "Hopefully today's decision will only be the first step by the regulator towards bringing energy costs in Ireland back into line with our European counterparts," he said.

The Small Firms' Association (SFA) also greeted the amended gas and electricity price changes positively. "This is a major win for small firms, as the SFA has fought hard for this reduction," commented SFA assistant director Avine McNally. She added that the regulator must now look at other ways of bringing down energy costs and increasing competition in the energy market.

However, Bernard Durkan, Fine Gael spokesperson on communications and natural resources, was less enthused: "The recent partial climbdown by the regulator clearly indicates a serious error of judgment by the Government and its trust in the regulatory system," he said.

Tommy Broughan, Labour Party spokesman on communications, marine and natural resources, said that he welcomed the regulator's decision to reduce previously sanctioned price hikes. However, he warned that even the reduced price increases will still cause difficulties for both domestic and commercial customers. "With the Budget now only days away, it is essential that those on social welfare and other low incomes receive the support necessary to allow them to cope with the new level of fuel charges," he said.