Energy bills: beat this autumn's price hikes


Electricity prices went up in August and September and are set to go up again this autumn.Tina Leonard discusses when it is worth switching provider and when it is not.

You may not have noticed it as your electricity and gas bills are lower during the summer months, but in August and September some energy providers increased their electricity prices.

And from this weekend, electricity and gas prices are set to increase again - Bord Gais prices are going up a whopping 22%.

So unless you want even higher bills than last year during the cold winter months, you should think of switching to get the best deal.

Tina Leonard is here to explain what price hikes are coming and what you need to figure out before you choose which energy provider to buy from.

First, the good news - the government levy is being slashed

From October (this weekend) the government is reducing the PSO levy. The Public Service Obligation levy was introduced a year ago and amounts to €6.20 (inc Vat) on your two monthly bill. It goes towards a helping to generate the Irish renewable energy industry and on subsidies towards the cost of buying from renewable energy generators. (The eventual aim is that we can produce enough energy to stop being dependent on buying in energy and consequently on fluctuating world prices).

The levy is being reduced by 41% so the two monthly charge will now be €3.65 including VAT.

Now for the bad news

This decrease in the PSO levy will do nothing to offset the huge hikes in electricity and gas prices.

From August prices have gone up across the board and from 1st October there will be more price hikes.


Bord Gais electricity prices were increased by 12%


Airtricity electricity prices rose by 12.3%


ESB electricity prices and standing charges rise by 14.8%

ESB gas prices track Bord Gais gas prices so also increase.

Airtricity gas prices rise by 21.2%

Bord Gais gas prices rise by 22%

Flogas gas tariff up 21.5% (discounts pegged against Bord Gais price)

So should you switch?

Absolutely. Prices change all the time, and right now they’re increasing, so you need to review your energy provider each year, just as you would with motor or home insurance for example.

Gas prices to Irish consumers fell in 2009 and 2010 as world gas prices dropped in 2008.

But wholesale gas prices have doubled in the last two years and as Ireland buys nearly all its gas from external markets we have no control over it. For example, a 40% increase in wholesale electricity prices has been cited for the reason behind current increases.

Also, you may be on a tariff that offers ‘discounts’ i.e. a percentage off the standard tariff, that expire after a certain time period. So for example some ‘discounted’ deals (6% or 14% off standard rate) offered by ESB Electric Ireland from last April don’t expire until the end of March next year, but when the standard rate rises you’ll still be paying more.

Basically, when prices rise the deal you are on may no longer be the most competitive on the market. And with energy prices number two after mortgage payment in terms of payment priority, paying the lease amount you can is paramount.

Six key questions before you switch

1. Am I locked into a fixed contract period (i.e. 12 months)? If so, then you’ll have to wait until your contract ends to switch, unless you want to face penalties.

2. Am I on an urban or rural rate, a day or night tariff? You won’t be able to compare deals unless you know this.

3. What standing charge do I pay? Check your bill to find out as different price points can have different standing charged. For example, a package might have a lower tariff but higher standing charge and vice versa.

4. If I have both gas and electricity, which do I use more of? This is important so that you check if combined gas and electricity deals suit you. In general there will be a cheaper price for one above the other, so there is no point in signing up for cheaper electricity and not so cheap gas if you use more gas for example.

5. Am I happy to pay by direct debit and get my bills online? If you are, then the best deals are offered for customers who pay and receive bills this way. For example there can are savings or ‘discounts’ of up to 14% off standard tariffs.

6. Am I an average consumer? I’m throwing this one in because all the headlines will tell you that you can save a certain amount per year by switching to a particular provider. For example, an average household (5,300KWh per year for electricity) could save €92 if they opt for electricity with Bord Gais’s Paperless Direct Debit option rather than ESB Eletric Ireland’s Value Saver with Direct Debit and Paperless Billing. But those tariffs and usage might not be representative of your usage, so keep that in mind.

When comparing prices never just compare the percentage discounts that the providers offer off their standard rate. So if you re told you’ll get 10% off if you sign up, you have to ask 10% off what? These ‘discounts’ are off the standard rates, all of which are different (apart from ESB Electric Ireland/Bord Gais for gas supply). Also ask what the standing charge is.

Given how much research you have to do before you choose you can opt to use a price comparison website such as www.bonkers.ie, where you have to input you usage details.

If you want to peruse energy cost comparison tables you can take a look at www.moneyguideireland.com. (The Commission for Aviation Regulation is currently establishing an accreditation system for energy price comparison websites).

What to do before you switch

The gas or electricity you are buying is the same from any provider so you are comparing like with like in terms of what you will receive. (The only difference might be different percentages of energy being sourced from renewable sources).

Given the product is the same you would be forgiven for thinking that price comparison would be straightforward.

But it is not! In fact it is far too complicated with a maze of tariffs all depending on a number of variables.

You have to wade through: day and night rates; urban and rural rates; different rates depending how you pay or get your bill; different standing charges and stand alone or combined electricity and gas deals.

What happens if you switch with unpaid bills

New rules from the Commission for Energy Regulation (CER) aim to tackle debt hoppers - those who switch leaving their unpaid bills behind. Energy companies from October will be allowed to warn a new supplier if a domestic customer owes more than €250 and is 60 days overdue.

They will not be allowed to block someone from switching and the customer will only be ‘flaggedup’ to the new provider and no further information will be given but the new supplier can assess the risk.

How they will deal with ‘flagged up’ customers wishing to switch remains to be seen.


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