Thursday 30 October 2014

Warning that prepaid electric meters will cost you more

Charlie Weston Personal Finance Editor

Published 28/05/2014 | 02:30

Consumers have been warned about the cost of pre-pay electricity meters
Consumers have been warned about the cost of pre-pay electricity meters

HOUSEHOLDS have been warned about the high cost of prepaid meters after Electric Ireland became the first mainstream supplier to offer the option of having them installed.

Two smaller operators have been signing up thousands of homes to the pay-as-you-go electricity meters.

But up to now, mainstream suppliers have only offered the these meters to their customers who are in arrears.

Now the Irish Independent has learned that the largest supplier of electricity to homes, Electric Ireland, will offer a voluntary pay-as-you-go electricity deal.

The electronic meter is topped up, much like buying credit for a mobile phone.

Electric Ireland, which is the retail name for the ESB, has not formally launched the new option but it confirmed that prepaid meters are available to all its residential customers.

Energy experts said it was responding to the fact that PrePayPower has signed up 60,000 customers since it launched in 2009. The company says it will not cut people off at night or weekends.

Users buy credit in a retail outlet, over the phone with a debit or credit card or online.

Newer player Pinergy, which uses rugby legend Paul O'Connell in its TV adverts, is also growing fast, according Simon Moynihan of price comparison site Bonkers.ie.

He said the main attraction of pay-as-you-go, also called prepaid, meters is that it forces people to focus on their energy use and cut their consumption.

PrePayPower claims prepaid meter users reduce their usage by almost 7pc.

Half of all households in the North have prepay meters, Mr Moynihan said.

Standard

But he warned that people who sign up for a meter and no longer get a bill will ultimately end up paying more for electricity.

Both PrePayPower and Pinergy charge the standard rate for electricity, so householders cannot avail of special offers. A year's supply will cost an average household €1,348.

That is around €290 a year more than the cheapest deal in the market, according to price comparison site Bonkers.ie.

The two companies do not levy an installation charge, but do impose service charges.

The new Electric Ireland deal is also based on a standard tariff, but its offering works out at €93 a year cheaper than those from PrePayPower and Pinergy.

Electric Ireland does impose an installation charge for the first year of €99, which can be paid off in instalments.

In year two there is a service charge that works out at €44.

Mr Moynihan worked out that an average family will end up paying Electric Ireland €1,311 in year one, and €1,255 in year two.

"Prepay meter suppliers have shown over the last year or so there is a substantial appetite for pay-as-you-go electricity meters, despite the extra cost," Mr Moynihan said.

Eurostat recently found that this country ranked as the fourth most expensive of 28 EU states when it comes to electricity prices.

Consumers here pay €24.10 per 100 kilowatt hour (kWh) of electricity which is 20pc higher than the EU average of €20.10.

Irish Independent

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