By Niamh Hennessy - Tuesday, July 12, 2011
ENERGY prices are going up. This has been confirmed by Bord Gáis which recently warned that households and businesses should expect higher energy prices in the coming months because of the rising cost of natural gas.
There are many options for consumers when it comes to choosing a provider and, with so many companies battling for customers, it can be difficult to know the best option.
However, you could be one of the thousands of consumers who could save a lot of money by taking the time to switch to a better deal.
For example if you are a Bord Gáis electricity and gas customer paying by direct debit and using the average amount of energy each year, then you could save €122.34 on your bill if you are paying €740 a year for gas and the same for electricity. The savings would entail switching to Flogas and the ESB.
Simon Moynihan of comparison website, bonkers.ie said that when switching was first allowed, there were just a few tariffs to choose from, standing charges were all the same and it was easy to see that you’d save money by changing supplier, especially as nearly everyone was still on standard rates.
"Now there are dozens of tariffs on offer from four different energy companies and it’s becoming more and more difficult for people to figure out the cheapest deals on their own.
"What makes it even more complicated is that nearly half of Irish households have already switched and are no longer on standard rates," he said.
Standard rates are the regulated Bord Gáis gas unit rate and standing charge and what was the regulated ESB electricity unit rate and standing charge. Electricity is no longer regulated by the Commission for Energy Regulation, so ESB can set their own prices. However, most of their customers are still on standard rates. The standard unit rates are what suppliers compare to when they make claims like "you can save 14%".
However, these types of claims are no longer valid because many tariffs now have non-standard standing charges.
"So, basically, when someone calls to the door or on the phone and says you can save 12% or whatever and you’ve already switched before, how does he know what you’ll save? He doesn’t because you are no longer on standard rates, and your standing charge may be different. That’s why it’s becoming increasingly difficult to tell what you’ll save by yourself," said Mr Moynihan.
"The savings claims made by energy companies are really only accurate if you’ve never switched before," he added.
ESB is the new player in the dual fuel market, but an ESB Electric Ireland customer will not automatically be switched to their new cheaper rates.
The customer will have to contact ESB and request that they change the tariff. They will get additional discounts by paying by direct debit and viewing bills online. Taking gas as well electricity with ESB Electric Ireland will net a further discount on electricity. However, any customers returning to ESB Electric Ireland must pay by direct debit.
The best deals all require payment by direct debit and all suppliers except Flogas require customers to review bills online to get the best prices.
"Bord Gáis carefully tracks wholesale energy prices and has just warned that the price of natural gas has gone up. Bord Gáis also expects gas prices to continue to increase in price.
"This means that we will most likely be paying higher prices for gas this coming winter and, because more that 50% of electricity in Ireland is generated using natural gas, it is very likely that the cost of electricity will go up too," said Mr Moynihan.
The Commission for Energy Regulation is likely to require that energy suppliers tell people how much electricity and gas they’ve used in the last year. This figure will appear on a person’s bill and will make it much easier for householders to find the best deals.
Director of moneycoach.ie Frank Conway said the best deals from the providers are those that are bundled, billing is facilitated via email and accounts are direct debited.
"However, not all consumers prefer to receive electronic bills and direct debiting can present its own issues which consumers need to remain cognisant of including errors and disputes.
"In an era where the personal finances of consumers are being increasingly stretched, the use of electronic billing and direct debits can add a certain amount of removal from day-to-day management of personal finances that may not always be the most prudent, especially in situations where careful scrutiny of income and expenses is crucial to the financial well-being of those families."
Mr Conway said that, in addition to searching for better value on gas and electricity, consumers should also remember to minimise the usage of those utilities where possible.
"Adequate home insulation is one way to achieve this and various Government grants are available to make older homes more energy efficient, which includes upgrading of windows, doors, wall and attic insulation," he said.