Small print warning before switching power supplies


Monday, October 11, 2010

A WAR is raging in the electricity and gas market with annual savings of more than €200 to be gained by changing from traditional providers.


Prices are likely to fall even further with the ESB expected to announce plans shortly to sell both gas and electricity. 

However, as the country faces into what could be one of the coldest winters in years, experts say there needs to be more clarity on the savings that can be made by switching between providers. 

Earlier this week Flogas matched Airtricity’s deal of offering a 20% discount on Bord Gáis gas prices. However, consumers have been advised to read the small print as, for example, they will have to pay €100 to exit an Airtricity contract in the first year, but there is no penalty to leave Flogas or Bord Gáis. 

Simon Moynihan of consumer website Bonkers.ie said in Britain home energy tariffs are more complicated than mobile phone bills and before long it will be the same in Ireland. 

"Without a standard by which tariffs can be compared, savings figures from suppliers will become completely meaningless," he said. "To allow us to compare energy tariffs properly the regulator needs to publish agreed national average household energy consumption figures and suppliers should be required to use them when making savings claims. That way we could easily work out whether deals like these are worth switching for or not." 

Flogas offers two new deals, but Mr Moynihan said its "15% off" deal is better than their "20% off" deal because it has a bigger standing charge. 

"With the Flogas ‘15% off’ deal, you’ll save about €106 a year off Bord Gáis’s gas rates." 

According to Bonkers, the cheapest home energy deal for the average Irish household would be to take the Flogas "15% off" deal for gas and go with Bord Gáis’s cheapest electricity deal or Airtricity’s direct debit and eBill deal. 

Frank Conway of moneycoach.ie said that many of the best electricity and gas discounts come on the back of direct debits and annual contracts. "However, in light of the fact that prices could take a further fall, it may be worth one’s while to take a wait-and-see approach instead of locking into a one year price contract." 

Chief executive of the Consumer Association Dermott Jewell advised that consumers need to look at all of the offers and take their time to consider them before committing to what are annual contracts with terms and conditions applying. 

"Let’s be clear, providers have taken too long a time to get to this point of discounting in what has been a seriously overpriced market for the consumer in Ireland," he said. 

The price war began when Bord Gáis launched The Big Switch campaign in February 2009 which saw thousands of ESB customers move supplier. 

Bord Gáis, however, is not allowed to compete with private operators on gas prices, as it is regarded as dominant in the market, but it can compete on electricity prices where it offers a 13% discount on the ESB tariff.

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