The head of the Commission for Energy Regulation has denied reports that families are facing a 5% hike in electricity costs over the next five years.

It follows reports at the weekend that bills are set to rise because Eirgrid and ESB Networks want to increase spending to improve the network.

The Sunday Business Post claimed the two companies are in line for spending increases of €1.8bn over the next five years.

It was reported that much of the increase would go toward new power lines from Eirgrid, while €500m would be spent by the ESB supplying homes with smart meters.

However, the chairperson of the CER says the overall cost to families will not hit 5%.

Garrett Blaney says bills will only increase by around 1%.

"It's not 5 percent, no what's important is the total impact on the bill - and that's less than one percent" he told Newstalk Lunchtime.

"The reason why it's so little given that amount of investment going in is because there's been a significant reduction in the cost of financing".

"Ireland's in a much better place today than it was five years ago, we've been able to hand that benefit back to consumers".

"We've also made judicious cuts on the various costs that have come in, and we're demanding further efficiencies from the utilities" he added.

Mr Blaney says there is "no justification" for a 5% increase, and there may be an opportunity for a reduction.