Energy companies have done the bare minimum to pass on reduced costs to the consumer. But don't get mad, get even
Published 29/04/2015 | 02:30
DON'T you just hate it when you feel you have been mugged?
That is the sense we have been left with after the energy companies passed on the bare minimum in terms of cuts to domestic electricity and gas customers from the plunging oil prices and wholesale gas prices.
The reductions have been pitiful. Most companies have reduced their standard rates by between 2pc and 4pc.
These are measly and insufficient cuts, and are so low they do our energy firms no credit.
And most were initiated from the start of this month, just when the weather has improved and families are using heating systems less.
Then there is the fact that the reductions were forced out of the energy companies after a campaign for reductions was started in this newspaper and taken up by Energy Minister Alex White, who dragged the firms one by one into his office to explain why they were not giving consumers a break.
Boy, did they have some explaining to do.
Oil prices, a key input for energy providers, have crashed to half of its value of a year ago.
Wholesale gas prices, a more significant input for electricity and gas providers to residential customers, were down 18pc in March compared with the average March price for the previous three years.
Wholesale electricity prices are down 14pc year-on-year, according the latest energy market report from Vayu Energy for Ireland.
Energy companies will argue, and this can hardly be disputed, that the weakening euro against sterling and the dollar is limiting the gains for them from falling wholesale prices.
That is true, but still does not explain why the reductions in domestic standard rates have been so miserly.
Aoife McEvilly of the Commission for Energy Regulation (CER) has called on energy suppliers to pass the benefits of these lower costs to householders.
Ms McEvilly, who is one of three commissioners at the CER, said her office was engaged with energy firms, asking them about their charging plans.
No energy firm is regulated on price any more since the last one to be regulated on price, Bord Gáis, met a condition to reduce its market dominance.
You might well be annoyed about all of this, but you should do more than get annoyed. You owe it to yourself to get even.
The best way to get even is to switch your business.
Reducing energy costs by switching is among the easiest ways to cut your household bills, and shopping around is key. It is also one of the easiest services to switch.
Customers can contact companies directly, or use a number of price comparison sites including Bonkers.ie and Switcher.ie, both of which are accredited by the Commission for Energy Regulation.
Switching will see you being able to knock 19pc off your electricity bill, and 17pc off the gas unit rate.
For electricity, the best-value discounted rate is on offer from Energia, at just over €1,000 a year.
For gas, the best value is from Flogas at just over €800 a year.
Getting both fuels from Energia will save you more than €300 a year on standard rates.
There are also savings if you take both gas and electricity from one supplier, but the deals tend to be better if using separate companies.
Yet the pity of it is that so few people do switch.
Some 85pc of people have never switched, so they are being ripped off by unjustifiably high standard rates.
This situation is compounded by the fact that the best deals are often reserved for those prepared to switch.
Older people are the least likely to seek out better value. And almost half of consumers have either never checked, or have not done so in the last year, to see if they could get better value car insurance by moving to another provider.
When it comes to electricity, some 43pc of people have never checked out the market for better value.
That is according to research commissioned by the Competition and Consumer Protection Commission, the state body that resulted from the merger of the National Consumer Agency and the Competition Authority.
Don't just take my word for it, experts like Simon Moynihan of Bonkers.ie are at pains to point out that providers retain the best deals for switchers and rarely cut prices for existing customers.
The regulator has indicated that it expects further cuts from the energy companies coming into next winter, especially if wholesale energy costs remain low.
Don't hold your breath.
As we have seen, energy companies are quite cynical. Only if large numbers of people start switching around the market will the energy companies be forced to offer proper price reductions.
We have the power in our own hands.
Remember, loyalty is for losers.