Dull everywhere. That’s how the Met described January. The weather was wet and warm too they said. And a mild winter was just what we needed this year. It helped keep energy consumption down at the time of year when we use the most electricity and gas.
Most of us are trying to use less energy these days because gas and electricity prices are at the highest they’ve ever been. In less than a year and a half, gas prices have gone up by more than 30 per cent, and electricity prices have gone up by 20 per cent. Suppliers have cited all sorts of reasons for these increases, but the hard fact is that compared with 2011, energy customers need to come up with around €427 extra per year just to keep the lights on and stay warm.
An average Irish household on Standard plans (and that’s most of us) is now spending €2,141 a year on gas and electricity. At nearly €180 a month, it’s a very big chunk of our household expenditure. And what makes it worse is that we’re paying paddy tax on that too. We fork out 25 per cent more for our gas and electricity than UK energy customers do. And we use more too.
The most recent price hike was just a few months ago in October when all Irish energy companies increased prices just as the nights got longer and weather turned cold. And as winter energy bills continue to arrive, many people have been shocked at the highest bills they’ve ever seen… even though they know they’ve used less energy than ever.
Unsurprisingly, less cash and bigger bills have pushed record numbers of gas and electricity customers into arrears. And with the biggest bills of the year now due, those numbers are only likely to increase.
Sadly, arrears lead to disconnections. And although suppliers do not traditionally disconnect customers in the run up to Christmas, they seem to redouble their efforts at this time of year. Last year in January, Airtricity disconnected more than 1,000 electricity customers, the highest number ever by a supplier in a single month. Then Bord Gais disconnected 750 gas customers last March. We don’t have any numbers yet for 2013, but with prices at their highest and more customers in arrears than ever, we could see high disconnections this year too.
The good news is that we don’t have to though… The Commission for Energy Regulation saw trouble coming as the recession deepened and disconnections increased. Of course, higher energy prices made the problem worse and by the end of 2011 the regulator had put together a set of new rules to help customers in trouble stay connected. They also wanted to make sure that the disconnection of household electricity and gas was absolutely the last resort.
These rules apply to all suppliers and knowing about them could be the difference between staying connected and getting cut off.
The first thing to know is that suppliers are required to have a pre-disconnection escalation process. They’ve got to try and contact customers that are in arrears at least twice by phone and twice in writing. Written contact must be separate to normal bills. When they do make contact, they are required to try and work out a way to help settle the arrears. And this doesn’t mean just demanding payment.
Most customers in arrears simply can’t pay them off all at once, so suppliers are required to offer payment plans. These generally work by spreading arrears into affordable instalments. The terms can vary according to how high the arrears are and what is considered affordable.
Where customers find themselves in serious difficulty and payment plans are not a workable solution, suppliers should then offer to install prepayment meters.
These rules can prevent customers from disconnection, but customers in difficulty must engage with their suppliers. If a supplier can’t reach a customer and the full escalation process has been followed, they are then allowed to issue a written notice of disconnection. This gives a customer 14 days notice. If a customer doesn’t speak with the supplier, it will finally lead to the electricity or gas supply being cut off.
If you’re behind on your bills and feel that you may be able to take care of the arrears over time, a repayment plan might be the right solution. Energy companies know well that many of their customers are having difficulties with their bills these days, and all suppliers now have plans in place where you can arrange to pay off arrears in instalments rather than all at once. The first step is to contact your supplier and discuss your options. They are required to do what they can to help you.
Keypad prepayment meters, or pay-as-you-go meters used to be very difficult to get, and energy companies were reluctant to install them for their customers. Since last winter though, the energy regulator has insisted that energy companies offer their customers prepayment meters instead of disconnection when accounts are in serious difficulty.
The regulator’s new rules have meant that thousands of prepayment meters are now being installed every month and customers that would otherwise have been disconnected are able to keep the lights on.
When a prepayment meter is installed, any arrears are included as an affordable percentage of every top-up. Crediting a modern prepayment meter is like topping up a mobile phone and can be done at most paypoints.
Unit rates and standing charges for prepayment meters are usually the same as a supplier’s standard rates and there is no cost to the customer for a prepayment meter to be installed.
Unfortunately, prepayment meters are not generally available on demand from the big suppliers. Customers must have accumulated arrears that they are unlikely to be able to pay off before being considered for a prepayment meter.
Electricity customers that would like a prepayment meter but do not have arrears can obtain one from independent energy companies like PrePayPower and Pinergy. These companies will install prepayment meters for free, and the pricing is the same as Electric Ireland’s standard rate. There is an additional standing charge of around 37 cent per day which PrePayPower and Pinergy charge for the pay-as-you-to service.
What else can you do to keep your energy bills under control?
Look into a budget plan
Most customers pay their energy bills every two months based on meter readings and estimates, but it is possible to pay a set monthly amount for gas and electricity regardless of the time of year and how much energy is used.
Budget plans offer a way to spread the cost of gas and electricity evenly throughout the year. All suppliers have budget plans and they work by reviewing a household’s electricity or gas consumption for the previous year, working out how much it would cost in the coming year and dividing it into twelve equal payments.
The main benefit of a budget plan is that it makes energy costs predictable throughout the year and a cold winter doesn’t necessarily mean a huge gas or electricity bill. And if you overpay, you can claim back any surplus or use it to lower your payments in the coming year.
Check your prices every year
Most of us know that switching suppliers or getting a better deal from our current supplier is the quickest and easiest way to cut the cost of gas and electricity. However, more than half of Irish households have never switched for better electricity prices and the numbers are even higher for gas. Staying on expensive standard rates means you could be paying €250 per year of €20 per month more than you need to.
Even if you have switched before, discounts usually last for one year only, then your supplier will move you on to a standard rate. If you’ve been with your supplier for more than a year, check your prices on a comparison service like bonkers.ie. If you find a better deal, you can switch. You can also call your supplier to ask for a cheaper rate. If your account is in good standing, they will usually apply a new discount for another year.