“If PrePayPower has the cheapest unit rate in Ireland, how come they are just about the most expensive supplier on bonkers.ie?”
Now that’s a heck of a question, isn’t it? And I’ve lost count of the amount of times it’s come up over the last few weeks.
There’s a good reason why people are asking too. PrePayPower has been running a campaign that says: “PrePayPower.ie now has the cheapest unit rate for electricity in Ireland”. That’s exactly how their radio ad starts...
“That means,” continues the jaunty announcer, “you pay even less for your electricity, because PrePayPower.ie has the cheapest unit rate for electricity in Ireland. So when it comes to electricity unit rates, no other company is lower and all other companies are higher.”
No wonder people are asking us questions…
We’re expected to know which suppliers are the cheapest and which are the most expensive. And if PrePayPower does have the cheapest unit rate in Ireland, then surely they should be at the top of a price comparison table, right? Surely they shouldn’t be languishing at the bottom. After all, they do say in their ad that “no other company is lower and all other companies are higher.”
So what gives? Have the levers come off the adding machines at bonkers.ie? Shouldn’t PrePayPower actually be at the top of the list because they have “the cheapest unit rate in Ireland”?
Well, our adding machines are working just fine. And until last month, PrePayPower actually had the most expensive electricity unit rate in Ireland at 17.01 cent.
PrePayPower did cut their unit price for new customers last month to 15.84 cent though. That’s a reduction of nearly 7%, and to give credit where it’s due, it’s actually the biggest electricity unit rate cut we’ve seen since energy companies started announcing price cuts. When it takes effect from 31 March it’ll save those existing PrePayPower customers €70 per year - which is more than double what we’ve seen from any other provider.
Still cheaper with other suppliers
Their price cut doesn’t make PrePayPower cheap though. Their customers will still pay €1,320 per year for an average amount of electricity - and that’s where it all gets quite interesting…
That's because you can actually buy your electricity much cheaper on discounted bill-pay rates from almost every other suppler. Take Electric Ireland for example. They’ll sell you a year’s supply for €1,061, which is 20% or €259 per year cheaper than PrePayPower.
SSE Airtricity will sell you a year’s supply for €1,065 and they’ll also throw in €35 cashback for new customers, so you’ll come out ahead of PrePayPower by €291 a year.
And then there’s Bord Gáis Energy. They’ll sell you that year’s supply for €1,119. And they are giving new signups €100 cashback, so they could actually save you more than €300 a year over PrePayPower. Whew.
Of course, discounted rates expire after 12 months, but seriously, what gives? How can the company with “the cheapest unit rate in Ireland” be so much more expensive than almost everyone else?
Well, it’s because PrePayPower does not have the cheapest unit rate in Ireland. In fact, there are loads of discounted unit rates that are cheaper, and here are just a few:
The cheapest discounted and standard electricity unit rates in Ireland
|Discount rate||Standard rate|
|Bord Gáis Energy||14.89||16.90||16.54||18.77|
So how come PrePayPower are saying that they have the cheapest unit rate in Ireland?
Well, the last line in their radio ad is: “For full terms and conditions see prepaypower.ie/switch”. So, that’s where I headed after I heard the ad, and the first thing that catches your attention on that page is a line that says:
Get Ireland's Cheapest Electricity Unit Rate*
And there it is. An asterisk. It leads to some small print which says:
* Cheapest standard unit rate comparison was made against all Irish domestic electricity providers standard unit rates, comparisons made on 01/02/2015.
Ah. So they are making their comparison against STANDARD unit rates. But their radio ad says nothing whatsoever about Standard unit rates. Their TV ad says nothing about Standard unit rates either... And I would have thought that was an essential piece of disclosure.
In fact, you may remember that Bord Gáis Energy also ran a campaign about having the cheapest unit rates in Ireland. But they were very careful to actually use the word “Standard” in their ads so people wouldn’t be confused.
PrePayPower has left the word “Standard” out of their ads, and they don't use the word "Standard" in the statements on their website either. Instead they use an asterisk. The home page says the same thing:
THE CHEAPEST UNIT RATE* IN IRELAND!
And again, the asterisk leads to the same small print about standard unit rates.
Standard. It's a little word but it makes a huge difference. A Standard unit rate is typically a supplier's most expensive rate, It's like a benchmark. Suppliers use standard unit rates to discount against, and they use them as follow-on rates when those discounts expire - usually after 12 months. And because people don't switch for better rates as much as they should, 6 out of 7 electricity customers are actually paying those standard unit rates.
Prepayment Service Charge
PrePayPower does have the cheapest Standard unit rate – but they don't offer any discounts, whereas other suppliers do. Some suppliers offer discounts of up to 20%. And even if you compare PrePayPower to the Standard tariffs from other suppliers, you’ll almost always pay more to PrePayPower than you would to anyone else. That’s because they apply a extra charge that regular suppliers don’t. It’s called a “Prepayment Service Charge” and it adds and exta €136.71 to the cost of using PrePayPower. That’s on top of those standard unit rates, standing charges, taxes and levies.
So even with the cheapest standard unit rate in Ireland, PrePayPower will still cost you more than you would pay on almost every other supplier’s standard tariffs. And PrePayPower will cost you loads more than you would pay on any decent discount rate.
Below is a transcript of PrePayPower's radio ad:
"PrePayPower.ie now has the cheapest unit rate for electricity in Ireland. That means you pay even less for your electricity because PrePayPower.ie has the cheapest unit rate for electricity in Ireland. So when it comes to electricity unit rates, no other company is lower and all other companies are higher. So switch to PrePayPower.ie now for the cheapest unit rate for electricity in Ireland. Freephone 1800 844 668. Unit rate comparison was made on 1st February 2015. For full terms and conditions see prepaypower.ie/switch"
You can see their TV ad here:
12/03/2015 - We have made a number amendments to this article since first publication. This was done to clarify the difference between standard and discounted unit rates, and to account for the fact that discounted rates expire. The changes include adding "standard" unit rates to the table and identifying rates as discounted where applicable.