The energy business used to be a stodgy sort of enterprise. Things didn’t change much and when they did, they changed slowly. It was real utility stuff. Prices stayed the same for years and everyone paid the same rates to the same company and…. you get the picture.
Then a couple of years ago deregulation came along and the whole business got a good hard funt in the derrière. Things changed fast. Bord Gais launched The Big Swich and it was the most successful campaign of its kind ever in the world (really), Airtricity hopped on the bandwagon, customers switched like Billo…
Then this year things went bananas altogether.
After frantically trying to jettison customers (they were losing about 5,000 per week), the ESB was finally given permission to start winning them back. In April, they changed their name to ESB Electric Ireland, slashed prices by up to 17%, went from being the most expensive supplier to the cheapest. And thus began their scorched earth campaign to get all their old customers back again.
Airtricity responded by calling ESB a bunch of copycats for having decent prices.
The ESB got savaged by the media for not giving their nice new rates to 150,000 customers who weren’t paying their bills. Which was funny because all the other suppliers had been grumbling for ages that customers were switching and leaving massive unpaid arrears behind them. They called it debt hopping and there was nothing they could do to stop it.
So finally the regulator said that from the 1st of October suppliers could tell each other if customers weren’t much good at paying their bills.
It was game on. The ESB’s “New Energy” campaign took them from a net loss of 17,700 customers in March to a net gain of nearly 10,000 customers in August.
There was a price war going on sure enough, but it was also a game of chicken. Wholesale energy prices had gone through the roof and in the UK every energy company had increased prices but the Irish ones hadn’t. Something had to give and it was Bord Gais that finally caved.
In July they announced that they’d be increasing electricity prices by 12% and they asked the regulator for an unbelievable increase of 28% for gas. The media went nuts and Bord Gais got roasted.
But the media roasting was nothing compared to the one they got from their customers. Bord Gais went from gaining 5,300 customers in February to a net loss of 16,500 customers in July. Ouch!!
After letting Bord Gais take the kicking for increasing prices everyone else quietly did the same. After just six months of proper cheapness, ESB Electric Ireland went right back to being pricey again - and then all four gas suppliers hiked prices by over 20%.
But despite staggering price increases that will mean energy customers will have to fork out more than €250 per year for gas and electricity, October was the lowest electricity switching month in nearly 2 years and gas switching fell off a cliff too.
Gas prices are now at a record high and the cheapest electricity deal in the market costs nearly as much as we used to pay to the ESB before they could set their own prices.
So what’s going on? Why aren’t customers switching like they used to? Are supplies turning down switches now that they can tell when customers are in debt? Why do so few people switch to Flogas when they are nearly always the cheapest suppler?
I think it’s because all the tariffs and plans and dual fuel options have become too confusing. I think customers are wary of long contracts. I think it’s no longer clear or obvious who’s cheapest. When it was just Bord Gais and the ESB, it was easy. Now suppliers tell you that you’ll save 10%… but off what?
We work hard to help customers make sense of all the new plans and find the best deals, but here’s something that could help too. What if suppliers were required to tell you how much an average customer would pay over one year if you signed up to their new plan? - we think so and we'll be rolling that out in the next few days. If suppliers did that in their advertising message, then we wouldn't need to worry about percentages and unit rates and discounts and direct debit or dual fuel. Just the annual cost for the average customer.