Increased competition in the gas and electricity markets means that customers can shp around for the most cost efficient options, writes Emma Kennedy
Energy bills represent a large proportion of a typical household’s expenditure, so it’s important not to pay over the offs.
The latest price figures from the Central Statistics Office revealed that the cost of electricity has risen 11.5 per cent in the last 12 months. While gas prices have jumped 16.4 per cent.
The gas and electricity markets have both become more competitive in recent years, with significant deregulation and a number of new entrants. Since last year, Electric Ireland – the new name for ESB’s supply business – no longer has to seek approval from the energy regulator, the Commission for Energy Regulation (CER), for price changes.
Electric Ireland no longer has a monopoly in the electricity market, and now faces competition from a number of other suppliers, such as Airtricity and Bord Gais.
Bord Gais faces competition in the gas market from Airtriciy. Flogas and Electric Ireland, all of which can determine their own prices. Bord Gais has called for liberalisation of the gas market for residential customers similar to that in the electricity market.
In such a busy market, consumers may find it hard to clarify the array of price plans on offer.
However, help is available via comparison website Bonkers.ie, which recently became Ireland’s first energy price comparison service to receive accreditation from the energy regulator.
David Kerr, managing director of Bonkers.ie, said energy tariffs were becoming more complex and that the need for a comparison site that consumers could trust had “never been greater”.
Last August, the energy regulator set out a framework for accrediting and auditing price comparison websites, focusing on the accuracy and reliability of the comparisons to “help provide energy customers with the confidence to use these websites and get the best tariff”.
“In the current era of higher energy prices, the CER encourages all energy customers to take advantage of the competition by shopping around for the best tariff deal,” said the CER.
Figures from Electric Ireland indicate that a typical household bill for gas for a two-month period is €148, including VAT. A typical electricity bill is €185, also including VAT.
A spokeswoman for Bord Gais said that an annual gas bill, based on what the energy regulator considered average consumption, was just under €876. An annual electricity bill ranged from just under €1,090 at standard rates, down to €965 for a customer paying by direct debit and receiving electronic bills.
Last August, Bord Gais increased its residential electricity prices by about 12 per cent, which resulted in and extra €103 per annum on a typical bill. The in October, the company increased gas prices by almost 22 per cent, eaning an extra €157 a year on a typical gas bill.
Electric Ireland also increased its residential electricity prices by about 12 per cent last October. Airtricity’s electricity unit rates increased by 12.4 per cent last September while, a month later, the company’s gas unit rates jumped 21.2 per cent.
“the increase in our unit rates, the first since joining the mass domestic market in 2008, wasdue to a significant increase in wholesale energy prices,” a spokesman for Airtricity said.
Make sure that your price plan is the best fit for your needs, and don’t be afraid to switch to another provider to get a better deal.
Typically utility firms will give a small discount if you opt for online billing, and pay by direct debit.
Electric Ireland is currently offering new customers 14 per cent and 6 per cent off standard electricity and gas unit rates respectively.
“Customers will get discounts for 12 to 14 months, depending on when they sigh up,” said Electric Ireland’s spokesman. “After this, they will revert to standard gas and electricity prices.”
Airtricity is offering dual fuel discounts for up to two years. According to Airtricity’s figures, its dual fuel customers on standard, non-introductory rates are saving €53 annually on Electric Ireland prices and €26 annually against Bord Gais prices.
With Bord Gais, customers can avail of introductory discounts of up to 14 per cent offelectricity prices. The company’s spokeswoman said discounted rates typically applied for 12 months.
The energy sector is faced with a significant challenge, as a growing number of customers struggle to pay their bills.
In a bid to stop customers from bouncing from one supplier to another and leaving debts in their wake, the energy regulator has introduced debt-flagging measures, which alert the new supplier to the potential risk.
The energy market has traditionally operated on a credit approach, where a customer uses electricity or gas and then pays for it two months later. However, in cases of financial difficulty, extending a credit line is not necessarily the most prudent approach. Instead a pre-payment option is a potential solution.
Electric Ireland currently has 1.3 million customers, of which approximately 10 per cent are in arrears.
“In 2010, Electric Ireland entered into 160,000 special payment arrangements with customers to assist the management of their electricity bills,” the spokesman said.
“That number almost doubled in 2011 to 316,000 special payment arrangements.” Electric Ireland’s spokesman added that since last October, about 2100 Electric Ireland customers have agreed to the installation of a pay-as-you-go meter.
Airtricity has 625,000 customers, including about 65,000 in arrears. According to the company, about 10,000 arrears customers have “active payment plan agreements”.
Since last October, almost 900 pay-as-you-go meters have been installed for Airtricity customers. Bord Gais has more than 900,000 customers. “In 2011, we helped over 100,000 customers who were in arrears by agreeing repayment plans or installing pay-as-you-go meters.” The spokeswoman said.