Wednesday 26 July 2017

Sinead Ryan: Here's how to make this year the one you pay less for electricity

Sinead Ryan

Sinead Ryan

I USUALLY look at cheaper ways to pay for things, but today I'm focusing on value as opposed to price alone.

When it comes to some commodities, such as electricity, we import so much or burn fossil fuels to get it that we're at the mercy of the contracts of big suppliers and limited resources.

Targets to increase electricity supplied by renewable resources to 42pc by 2020 from wind farms and the like are ambitious but achievable. In the meantime, however, consumers are left to the devices of the current companies in the market.

The Commission for Energy Regulation (CER) recently had both good and bad things to say about its suppliers.

Although competition was largely regarded as healthy, which simply means there are more than two or three suppliers, it found that the majority of households were not on the best (cheapest) plan for them.

Read more: Charlie Weston: Energy firms have questions to answer on pitiful price cuts

Indeed, 50pc had never switched, or considered switching, electricity supplier. CER plans to introduce a 30-day cooling off rule so that customers can at least shop around, but is there any evidence they actually will?

The problem seems to be that we often believe we're already on the best plan. We sign up for an initial discount, which only lasts a year at most, before being quietly returned to what electricity companies call standard rates but which really mean the highest tariff.

CER also firmly rapped its members on their collective knuckles for high charges. It noted that although wholesale electricity prices (the ones companies buy at) dropped 39pc between 2013 and 2016, the saving passed on to customers was only 3pc to 4pc, which is disgraceful.

The network operators claim their distribution and other costs rose, but with the ESB alone trousering a profit of €635m in 2015, that's a tough one to swallow.

Why don't more people respond by moving to a different supplier?

Well, electricity bills are notoriously complicated to navigate and win absolutely no prizes for the plain English awards mentioned below. The acronyms alone would make you cry - MPRN, kWh, PSO, MCC . . . it's ridiculous.

Mind you, most of us wouldn't go to the trouble that a Dublin grandad did when he risked electrocution by tampering with the ESB meters on his road to 'sell' cheaper energy to his neighbours.

He got off with a three-year suspended sentence.

If you want to stay on this side of the law, what can you do?

I find the reason most people won't switch their electricity supplier is that they simply don't understand how it works.

Is it time consuming? Does someone have to call out? Where is my meter anyway? How will I save? The questions are endless.

I normally advocate hopping on to comparison sites such as Bonkers.ie and Switcher.ie which are excellent (see table for current discounts), but they generally compare by price alone.

Although there are competitors offering discounts, sometimes householders appreciate more the control of paying as they go.

Pre-pay companies such as Electric Ireland and Pinergy are leading the way. In other countries, home meters are very common. Here, it's been a slow burner.

But pay-as-you-go gives you fantastic control over your costs and usage.

I took a look at Pinergy's new meter and app, for instance, and I really liked it.

First, installation is free (though you 'rent' the box from the company through a daily fee incorporated in your top-up charge).

You get an app from which you control both the top-up amount (say €10 a week, or only on pay day) and it gives you a constant read-out of the balance you have left, how long it's expected to last and how much you're using compared with other houses your size (which might make for some interesting conversations with the teenagers).

Read more: The 60-second guide to... getting a Better Energy Homes grant

It's already popular with landlords, for obvious reasons, and the company now has 30,000 customers.

It fits the device (around the size of a block of cheese) for free in around 40 minutes, cancel your existing supplier and off you go. There are no bills through the letterbox either as you install your debit card details on to the app.

In compliance with CER guidelines, it ensures vulnerable customers can't be cut off over weekends - they are given free credit until they can top-up.

Simon Moynihan of Bonkers.ie says that although Pinergy won't feature top of the comparisons which are purely cost-based, the control people feel from pay-as-you-go is very important.

Either way, electricity is a fixed, high cost for all of us.

Why not make this year the one to see if you can pay less?

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