Power NI customers will see an increase of 6.1% on their electricity bills from October this year.
The move will affect nearly half a million households in Northern Ireland, adding around £35 a year to their average annual electricity bill.
Power NI said the rate change, which has been agreed with the Utility Regulator, is due to increases in costs from the electricity network provider and the market operator.
However, it claims its prices are still “significantly below” the main suppliers in Britain, Ireland, Europe and £80 cheaper than they were 10 years ago.
Stephen McCully, Managing Director of Power NI said: “We work very hard to keep our prices as low as possible. Unfortunately, like all suppliers, we have no alternative but to pay these increased network and market charges, which have a knock-on effect on our prices.
“Having been through a rigorous process with the Utility Regulator, our customers can be sure that although unwelcome, this increase is as low as possible. In fact, Power NI presently has the most competitive rate in the market for customers without tying them in to a fixed term contract.”
He added if costs fall, that will be reflected in the supplier’s prices “at the earliest opportunity”.
The Utility Regulator said approving any increase to electricity bills “is not a decision we take lightly”.
Chief Executive Jenny Pyper added: “It is disappointing that, due to a number of rising costs, Power NI need to increase their domestic tariff. However, we have fully scrutinised every element of the tariff to ensure it reflects the actual cost of supplying electricity to Northern Ireland homes and is therefore justified.
“Power NI have an under recovery from this current tariff year which needs to be collected. This reflects the shortfall between forecast and actual costs which needs to be recovered. However, our system of regulation ensures that Power NI makes no extra profit due to over or under recoveries and that customers only pay the actual costs of buying and transporting electricity to their homes.”