Price cuts from three energy suppliers are coming into effect and two others have just launched huge discounts in a bid to win new customers. Could this be an energy price war?
Three energy suppliers are cutting prices.
Why? Well, the wholesale prices that they pay are at their lowest level in seven years, so they can afford it.
Which also means they can cut prices in other ways too – with discounts – and two suppliers seriously slashed away at their prices today.
It started with Energia launching new deals this morning. First up was a 31% electricity discount which is the biggest discount we’ve ever seen for electricity on bonkers.ie.
Then they launched a dual fuel offer with a 25% electricity and 24% gas discount. It has a year one cost of €1,743 and went straight in at number one as the cheapest dual fuel offer in the marketplace. For a few hours…
Then SSE Airtricity countered with their own dual fuel offer. And with a year one cost of €1,730, it knocked Energia off the number one spot!
And that’s where you’d think this story would end right?
At five o’clock, Energia came back swinging, increased the discount on their dual fuel offer and with a new year one cost of €1,724 took back their number one dual fuel spot!
Now after all that, what about those price cuts eh?
Well, Electric Ireland, Bord Gáis Energy and PrePayPower are all cutting standard prices effective 1st October. And here's the details.
Electric Ireland price cut
Electric Ireland is cutting standard gas unit rates by 5% from 5.72 cent to 5.43 cent including VAT.** This will save an average household €39.47 over the course of a year. Cutting gas prices at this time of year used to be something that suppliers just didn’t do, but not any more…
Bord Gáis Energy price cuts
Bord Gáis Energy has also announced that it will cut standard gas unit prices. Their gas price cut is worth 2.5% and will bring unit rates down from 5.74 cent to 5.60 cent, saving customers €19.50 per year.
But Bord Gáis Energy isn’t stopping there. They are cutting standard electricity unit prices by 5% too. It’ll bring unit rates down from 17.94 cent to 17.05 cent which will save customers €47.50.
PrePayPower price cut
And PrePayPower has announced that it will reduce prices too. They are cutting standard unit rates by 0.70% from 17.15 cent to 17.03 cent which would save customers €6.36, however the company is also increasing their standing charge by €2.18, so the net benefit to customers will be €4.18 a year.
Now these price cuts are grand and all. And because most people are paying standard rates, they will benefit plenty of households. But why wait for a small price cut when customers switching from the most expensive electricity deal to the cheapest could save almost €350*** in year one by switching?
PSO Levy increase
Oh, in all the excitement, I nearly forgot to mention that the PSO Levy is going up on 1st October from €68.20 to €80.30 per year. Which sounds like a bad thing, but it’s not completely terrible… which I’d better explain because last time I said that I got into all sorts of trouble.
The PSO Levy is a bit like a market barometer in reverse. When it goes up, electricity prices are usually falling. And when the PSO Levy goes down, electricity prices are usually going up. And the price decreases are usually much bigger than the PSO Levy increases.
And with the amount of price cutting and discounting going on right now, maybe people won’t mind that extra quid a month on the PSO Levy too much.
*Sorry Trump fans - sniff!
**I have included VAT in the rest of the prices too, but wanted to save the reader from having to see “including VAT” a dozen times.
***A customer with average consumption, switching from the PrePayPower Standard tariff with an annual cost of €1,280.53 (price cut and PSO Levy increase included) would save €349 in year one by switching to Energia’s Clever Energy tariff with a 31% discount.
And finally, calculations are based on national average consumption of 5,300 kWh electricity per year and 13,800 kWh gas per year, as determined by the CER.