Most households are not on the best energy price plan available to them, according to the CER’s review of competition in the electricity and gas markets in Ireland.
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The CER has today published the findings of its review of the level of competition in the Irish gas and electricity markets. The regulator has found that there is a healthy level of competition in the marketplace, prices are gradually falling and that customers are generally satisfied with the service they are receiving.
However, the CER has expressed concern that most people are not on the best plan available to them.
The CER’s review has found that over 50% of customers have either never switched or even considered switching, meaning that they are missing out on the benefits of increased competition and choice.
There is currently over €400 to be saved by customers with average consumption who switch to the cheapest suppliers in the marketplace. And high consumption households could stand to save significantly more than that.
Ireland’s energy suppliers employ a series of strategies in attempting to attract new customers, including offering large discounts, cashback offers and other incentives. For example, discounts of as much as 33%, cashback offers of up to €180 and free consumption monitoring devices are currently available to customers who switch.
However, most new customer discounts expire after 12 months, after which customers are quietly placed back on to expensive standard rates.
The CER’s review has found that the vast majority of customers who switched to a better deal defaulted back to standard rates after 12 months.
In fact, 86% of electricity customers who had switched in the previous 12 months ended up back on standard rates. This figure stands at 81% for gas customers.
In order to combat this switching inertia, the CER has proposed that suppliers be required to give 30 days written notice to customers before their discounts are due to expire. The proposal is currently under consideration.
In the meantime, customers who switch should set themselves a reminder to switch again in 12 months’ time.
Switching deemed “very easy”
Despite its concerns about the high proportion of customers who are not on the best deal available, the CER was “encouraged” to find that the switching process is “very easy”.
In fact, over 80% of customers who have switched suppliers since 2012 have deemed the process “easy or very easy”.
On bonkers.ie, customers can compare the entire market and switch online in less than 7 minutes. All that is needed to save over €400 is an MPRN for electricity switching, GPRN for gas switching and a recent meter reading.