Editorial: More power to energy providers' price wars
Competition is good, or at least that was what we were told when electricity and gas supplies were opened up to alternative providers. Sadly for consumers, it hasn't worked out like that in the utility sector. Gas prices have risen by 35pc in the past three years and electricity prices have increased by 25pc during the same period.
So much for the competition.
Of course, there are a number of factors, some global – like the cost of oil and gas.
Others are more local, like the generous wages historically enjoyed in the sector.
The entrance of a new player, Energia, has shaken up the market yet again. Deals, discounts and bundles are the order of the day.
While this is welcome news for enterprising customers who have grown out of their discount deal, usually lasting a year, and are willing and ready to go search for something cheaper, it does beg the question of how much the electricity and gas companies value their existing customers – in other words, 'what price loyalty?'
Well, it's not very high up on the priority list, although Electric Ireland (the old ESB) has factored existing customers into its plans this time around, with an 8pc discount for those who stay with it, although more attractive discounts are available to new customers.
Research conducted by a comparisons website, Bonkers.ie, has found that seven out of eight customers are on standard tariffs for electricity and gas – which means that they have stayed with the same provider, despite attractive discounts available if they were to switch and avail of a discounted service for a set period.
The same research shows that about 1,000 customers a week are switching supplier, which is a small fraction of those who use these services.
Altogether, the fact that Energia has entered the market and that existing suppliers like Bord Gais and Electric Ireland have reacted can only be good for customers and is to be welcomed.