The move comes despite warnings from advocacy group St Vincent de Paul (SVP) that poorer families would not be able to cope with higher bills.
The Commission for Energy Regulation said it had agreed to allow a 30pc increase in the “green” levy on household electricity bills.
This will add €25 to the annual cost, once valued added tax is added. It will apply to bills from October.
The levy hike will apply at a time when higher waste costs and back-to-school expenses are set to hit parents hard in the pocket.
Known as the Public Service Obligation (PSO) levy, it is in place to subsidise the production of electricity from peat, renewables and to pay power plants to produce energy to ensure we have a steady supply to the network, what the regulator calls security of supply.
Energy experts said the 30pc hike in the levy would wipe out much of the price cuts announced recently by Electric Ireland.
Bills for the 1.2 million Electric Ireland electricity customers fell recently by 6pc, knocking €57 off the average bill.
And the levy increase comes after a report found that electricity prices here are the third highest in the European Union.
Eoin Clarke, of price comparison site Switcher.ie, said the move would see the annual PSO levy go from €80 a year on electricity bills to almost €105.
Mr Clarke said: “The PSO levy is a standard component of all electricity bills, and is a charge all of us have to pay, regardless of our electricity usage.
“Already, the average electricity bill in Ireland stands at €947 per year, so the fact that this PSO levy change will push this up by another €25 will come as unwelcome news for anyone who is already struggling to pay their energy bills.”
He urged consumers to switch supplier to save money. There are now nine energy suppliers in the domestic market.
St Vincent de Paul said recently it was particularly concerned at the impact the increases would have on the families and individuals it visits who cannot afford to pay additional charges on top of other costs they face.
Jennifer Thompson, of the society, said: “Autumn is a particularly difficult time for families, who have just faced back-to-school costs and are worrying about upcoming Christmas expenses and getting through the winter months, when energy bills are highest.”
SVP said it was concerned about the changes in electricity and waste charges, which it said were coming in September and October.
The society said it accepted the pricing structure for waste removal should encourage waste reduction and recycling, but called for waste charges to be properly regulated and poverty-proofed.