As ESB is deregulated, a price war is bringing cheaper gas and electricity. Niall Brady looks at the deals on offer
Householders have been told to take advantage of a price war among energy suppliers to protect themselves from rising oil and gas prices.
Energy regulators lifted price controls from ESB Electric Ireland last week, letting it offer discounts to coax back some of the 800,000 households that switched to Bord Gais and Airtricity in the past two years.
ESB has also entered the gas market, with dual-fuel discounts it says will save customers €190 a year if they sign for a gas and electricity bundle.
The discounts will be a key weapon in the battle against rising energy costs. Oil prices are back at levels last seen in August 2008 with Brent crude rising above $123 a barrel last week because of fears that suppliers could be hit by a prolonged crisis in Libya. The increases helped to push Irish inflation to 3% in the past year.
Gas prices are under pressure too, with Bord Gais expected to ask regulators for permission to raise its domestic tariff by more than 15% from October.
Wholesale energy prices are up 31% in the past six months according to an index of oil, gas, coal and electricity costs compiled by Bord gais. Many of these rises have yet to be passed on to households.
Michael Kelleher, energy trading analyst at Bord gais, said: @Saudi Arabia has covered the production shortfall arising from the situation in Libya, but concerns are being raised about the long term implications for the oil industry.
“Natural gas prices experienced a sharp rise in March and could see further increases as Japanese imports increase to fill the gap left by nuclear and coal plant shutdowns.”
We guide you through the best energy deals and identify the home improvements that will pay themselves in lower electricity and gas bills.
Bonkers.ie, a price comparison website, says that the ESB’s new Supersaver tariff is the best electricity deal for homes that are not connected to the natural gas grid.
It gives 12% off ESB’s standard prices if you pay by direct debit and 2% for receiving your bills online – 14% in total. The same discounts are available to ESB’s existing customers if they sign up for its Reward tariff.
Supersaver would cost €870 for households using 5,300 kilowatt hours (kWh) of electricity a year, according to Bonkers.ie. Bord Gais, whose equivalent deal gives 13% off ESB’s standard tariff, would cost €879. Airtricity also offers a 13% discount. Many Bord Gais and Airtricity customers are not eligible for these discounts, however, as their introductory deals have run out
Simon Moynihan of Bonkers said: “ESB’s new Supersaver deal does not require a one-year contract, as we’ve seen with other suppliers’ price plans. It has not increased the standing charges to compensate for the unit rate discounts – a practice that is becoming increasingly common. Customers signing up should be aware however that prices will revert to ESB’s standard rates after one year.”
Flogas has the best deals, with its Option B offering 15% off Bord Gais’s standard tarifffor one year. It is available to households that pay by direct debit and is suitable for those with average gas consumption, which is considered to be about 13,800 kWh of gas per year.
Option A gives a larger discouint of 20% but at the cost of a higher standing charge - €125 a year after VAT compared with €68 for other gas tariffs. This makes it suitable for heavy gas users only.
ESB is the only other company that supplies gas to households which are not its electricity customers. It gives 4% off Bord Gais’s standard tariff if you pay by direct debit and 2% for online billing – 6% in total.
ESB and Airtricity bundle electricity and gas into discounted packages, with the best choice depending on the mix of fuels. Bonkers.ie says ESB has the edge for households that conform to the national average – 13,800 kWh of gas and 5,300 kWh of electricity a year.
ESB’s SuperSaver dual-fuel bundle gives up to 17% off its standard electricity tariff and up to 6% off Bord Gais’s standard gas prices. Bonkers.ie says this works out at a bill of €1,535 a year based on average consumption patterns.
Airtricity’s Biggest Save bundle gives 6% off electricity but up to 20% off gas. This would cost €1,590 a year if you fit the consumption pattern used by Bonkers - €55 more expensive than ESB. If your gas usage is higher, though, Airtricity’s discount of 20% tips the balance in its favour. It bases its comparisons on 16,000 kWh of gas usage a year.
Airtricity’s bundle locks you in for a year with a termination fee of €100 for leaving early, making it the only energy supplier to require a fixed contract. It also muddies the water by imposing higher standing charges than other energy suppliers.
Those determined to squeeze the best deal from energy suppliers should bypass the dual-fuel bundles sourcing electricity from ESB (15% discount on Supersaver tariff) and gas from Flogas (15% discount on Option B). Bonkers.ie says this would reduce your bill to €1,504 a year.