Charlie Weston: Price slashing to grab market share has ended
Published 11/07/2011 | 05:00
Householders have not faced a rise in utility bills for more than two years -- mainly due to the breakout of a healthy price war among energy suppliers.
Now, though, that's all about to change.
Bord Gais will be the first to impose increases in electricity prices that will cost the average family about €120 a year in extra payments.
Around 430,000 households will have to pay more -- including those who switched to Bord Gais when it started offering electricity for cheaper than ESB.
And gas customers of Bord Gais are also in line for a bashing, with the semi-state seeking permission for a rise that will push up the average bill by €200 a year.
The other players in the utility market -- ESB Electric, Airtricity and Flogas -- have yet to declare their hands but the expectation is that they, too, will hike up prices.
Blame the surge in commodity prices on global markets. Oil and gas prices, used to generate most of our power, have shot up by 30pc in the past year. There were similar rises last year, but that did not result in a knock-on hike in residential utility bills.
Part of the reason for this has been a price war.
Only last April, ESB, now called Electric Ireland, was cleared to set its own prices for electricity, prompting it to offer discounts, especially for those willing to sign up for a "bundle" deal by getting both electricity and gas from it.
This allowed it to match offerings from Airtricity, Bord Gais, and Flogas.
Price rises had almost become a distant memory -- in the past two years, prices have gone down as the different suppliers attempted to build up their market share.
Now, the price slashing and market-share grabbing by the utility suppliers has ended.
But that does not mean consumers will still not benefit from switching again.
The best deal for electricity is from ESB Electric Ireland's SuperSaver deal. You need to sign up for a direct debit and online billing, and for that you will get 14pc off the usual ESB price, according to David Kerr of comparison site Bonkers.ie.
For those with a mains gas supply, the best bet is Flogas's New Customer Option B.
Getting your electricity from ESB's SuperSaver deal and gas from Flogas's Option B is more than €200 cheaper than ESB's standard tariff, with gas from Bord Gais.
Consumers need to examine their utility deals now to avoid a cold or extra costly winter.