Families will soon get the chance to save up to €275 a year on their electricity bills as the first of the price cuts announced by energy companies earlier this year starts to kick in – Louise McBride
In just over a week's time, Bord Gáis Energy will cut its electricity prices by 2.5pc - and its gas prices by 3.5pc. Although the gas price cut is well below the 5pc reduction introduced by its sister company, British Gas, earlier this year, these cuts are a step in the right direction.
Energy companies have benefited hugely from a plunge in wholesale gas prices over the last year so it's about time consumers started to see gas and electricity prices fall.
Once its price reductions kick in on March 16, an average household will pay €996 a year for their electricity - as long as they sign up to Bord Gáis's cheapest energy deal.
That deal includes its €100 cashback offer and its 10pc electricity discount. Under this cashback offer, you get €100 off your electricity bill if you sign up to Bord Gáis, pay your bills by level pay direct debit (where you pay the same amount every month for your electricity), and receive your bills online. To secure its 10pc electricity discount, you must sign up to Bord Gáis for a year.
At €996 a year, the cost of electricity for a typical household under that Bord Gáis deal is €65 less a year than one of the best deals on the market for new electricity customers - Electric Ireland's Value Saver (direct debit and online billing) offer. Under that Value Saver deal, an average household would pay €1,061 a year for their electricity. A typical household could, however, be paying between €1,193 and €1,271 a year for their electricity if they're on standard, rather than discounted electricity rates - depending on the supplier. A family paying standard electricity rates could therefore save as much as €275 by signing up to Bord Gáis’s cheapest electricity deal this year.
Remember Bord Gáis’s cashback deal is a once-off offer so it is unlikely to be available after a year. The 10pc discount will also expire after the first year - and revert to a 5pc discount instead. This means you will probably get your electricity cheaper with another supplier after your first year with Bord Gáis.
This applies to any discounted energy deal you sign up to.
"Most discounts run out after a year - so once you've been with the same provider for a year, check what rate you're paying for your electricity or gas," said Simon Moynihan, communications director with the personal finance website, bonkers.ie. For this reason, be prepared to switch your energy company if you want to grab some of the best electricity and gas deals out there. The best offers are usually only available to new or returning customers - rather than existing ones.
Switching energy provider is free and straightforward. First choose the supplier you wish to move to. Then, get a copy of your latest electricity or gas bill and have it to hand when you contact the supplier you want to switch to. You will be asked for your Meter Point Registration Number (MPRN) if switching your electricity, or your Gas Point Registration Number (GPRN) if switching gas. You will find these numbers on your energy meters - and latest bills.
Your new supplier will ask for a meter reading - as well as your address. It will then make the necessary arrangements with your old supplier to have your account switched. You will need to give your new supplier your bank details if you are going to pay by direct debit.
Understand and be comfortable with the terms and conditions of your contract before you sign up to a new supplier. You often need to stay with the same company for at least a year to qualify for a discount. There are usually break fees if you end your contract before the year (or whatever the minimum term is) is up.
Your key priority when switching should be to save money. Be wary of using prepaid meters to do so as electricity usually works out more expensive when you pay for it in this way.
"Generally, electricity is up to €300 more expensive a year with pre-pay meters than you would pay if you went with the cheapest deal," said Mr Moynihan.
Bord Gáis won't be the only energy company cutting its prices this year. Electric Ireland, which reduced its electricity prices by 2pc last November, will cut its gas prices by 2.5pc from April 1. On the same date, SSE Airtricity will chop its gas and electricity prices while Flogas will cut its gas prices. There will be plenty of opportunities to save money on your electricity and gas bills in the coming months - so get moving.