The country's biggest energy supplier is reducing its prices for the third time in just under a year.
Electric Ireland has announced another price cut. But its size may leave some disappointed.
Over 1.1 million electricity customers and around 170,000 gas customers will see their electricity prices fall by 3% and their gas prices drop by 3% from 1st November. However those on a smart meter tariff will see their electricity prices drop by 5% as Electric Ireland seeks to encourage more people to make the move to these.
The reductions will save the average household around €40 a year on their gas and up to €75 a year on their electricity.
It's the third time Electric Ireland has reduced its prices in just under a year and follows a price drop from SSE Airtricity at the start of July.
As well as this Electric Ireland is offering great deals to new customers to entice them to switch. But more on that in a bit...
Why are prices not falling more?
The energy regulator the CRU recently sanctioned a big increase in electricity and gas network fees, which are limiting the room for suppliers to drop their prices. On top of this, wholesale prices still remain high by historical standards.
Energy suppliers pay ‘network’ fees to Eirgrid and Gas Networks Ireland for the upkeep of the electricity and gas networks respectively.
As consumers, we don’t see these charges on our bills as they’re incorporated into the unit rate that we pay for our energy as well as the standing charge. But around 30% of the total cost of a household’s gas and electricity bill is made up of these network costs.
The CRU sets the amount that Eirgrid and Gas Networks Ireland can charge suppliers each year based on detailed discussions with all relevant stakeholders.
For the 2024/25 year the CRU has agreed an increase in the network fees that Gas Networks Ireland can charge. According to the regulator, this is to support Gas Networks Ireland in delivering “a safe, secure and decarbonised gas network”. Based on average usage, this increased charge works out at around €5 a month or €60 a year per household.
The CRU has also increased the network fees for the upkeep of the electricity grid. Big investment is needed in the grid over the coming years to cope with a rapidly increasing population, the demand from data centres, as well as to help with the transition towards Net Zero. So the energy regulator also sanctioned an increase in the electricity grid fee to over €100 on average per household.
Electric Ireland, like all suppliers, has to pay these fees. So the small reductions need to be seen in that context. Had the grid fee increases not been sanctioned we’d likely have seen a far bigger price drop from Electric Ireland.
Prices still high
Although this announcement is obviously good news, we need to remember that it comes on the back of some hefty price increases from Electric Ireland, and indeed all suppliers, over the past few years.
Even after today’s reduction, Electric Ireland’s third in just under a year, its electricity prices remain around 80% above where they were in 2021 before Covid and then the war in Ukraine wreaked havoc with energy prices. While its gas prices are over double pre-war levels. This means customers of Electric Ireland will still be paying well over €1,000 a year more for their gas and electricity than they were only a few years ago.
On top of this, the CRU recently sanctioned an increase in the PSO levy to over €42 a year from 1st October. So this is going to eat up a lot of the electricity price reduction.
So it’ll still be an expensive winter to heat and light our homes.
Will energy prices fall further?
Looking forward, given where wholesale gas and electricity prices seem to be settling, it’s tough to see prices for households falling much further in the short to medium term at least. Though there may be some room for another small cut in gas prices.
Wholesale gas and electricity prices are still just over double pre-war levels. And this is where they seem to be settling. So we may need to get used to paying much higher prices for our energy unfortunately.
Today's announcement continues our commitment to deliver value to our customers, while also supporting the transition to a more sustainable energy future. Electric Ireland will not be increasing prices for our electricity customers, despite the increases in network charges as recently announced by the CRU which would have resulted in an increase of €101 per annum.
Pat Fenlon, Executive Director, Electric Ireland
Get up to €100 cashback as a new customer with Electric Ireland
As well as the reductions outlined above for its existing customers, Electric Ireland is offering further big discounts to new customers.
Right now new customers can get a 28% discount on their electricity as well as €100 cashback or a 30% discount and €50 cashback when they switch both their gas and electricity to Electric Ireland.
And if you're already a customer of Electric Ireland, don't worry. There are great deals for you from other suppliers. Flogas has a great Team Ireland dual fuel deal.
Assistance
Electric Ireland says it continues to provide a range of initiatives to support customers who are struggling to pay their bills.
It provides several flexible payment options, including an 'equaliser' product that allows customers to spread their energy costs in equal payments across the year or to take a payment holiday by agreeing a plan to pay their bills over 11 months instead of 12. So reach out to Electric Ireland if energy costs are a concern for you as it will work with you to put a manageable payment plan in place.
In the meantime, to help you cope with high energy prices, here are 16 ways to use less electricity and save money.
And if you're struggling to pay your energy bills, here are a range of other supports that are available.
Switch and save on your energy costs
If you’re looking to save money on your energy bills, why not switch to a cheaper supplier?
Even though prices are dropping, you can save even MORE money by switching as suppliers are offering big discounts to new customers.
Head over to our energy comparison page to review the options available to you.
Whether you’re looking to compare electricity, gas, or dual fuel deals, bonkers.ie has got you covered.
