Bord Gais may be free to set its own gas prices in as little as three months, the Commission for Energy Regulation has announced this afternoon.
Bord Gais, the last regulated domestic energy supplier in Ireland, has almost reached all of the criteria necessary to achieve deregulation, the CER said.
Bord Gais must lose at least 40% of its domestic gas customers before the regulator will grant permission for the energy supplier to set its own gas prices. If Bord Gais continues to lose customers at its current rate, it will reach the 60% of market share threshold by August.
Requirements for deregulation
In addition to losing 40% of its customers, the CER says that there must be at least three domestic gas suppliers in Ireland, and two of them must have a market share of at least 10 per cent before Bord Gais can be deregulated.
There are currently four domestic gas suppliers in Ireland. Bord Gais has 63.5% of the market, Airtricity has 17%, Electric Ireland has 14.5% and Flogas has 5%. Both Electric Ireland and Airtricity have more than 10% market share so the supplier requirement has been met.
If Bord Gais wishes to take advantage of deregulation as soon as its market share falls below 60%, the regulator requires that the supplier re-brand.
If Bord Gais decides to keep its current branding, the supplier can wait until its market share has fallen below 55%. The CER predicts that this could take until February 2014.
Electric Ireland, the former ESB, was given permission by the regulator to set its own prices in April 2011 after losing more than 40% of its electricity customers to Bord Gais and Airtricity. It chose to rebrand and compete as soon as possible, rather than wait and keep the ESB branding. If Bord Gais loses 40% of its customers by August - as predicted by the CER - the company may choose to rebrand also.
Commenting on today’s announcement from the Commission for Energy Regulation, bonkers.ie managing director David Kerr said “We are pleased to hear that Bord Gais may be permitted to set their own gas prices soon. It could mean stiff competition and lower gas prices across all suppliers in the lead up to winter, which would be very welcome for consumers.”