Flick the switch
It pays to change your utilities provider every year, writes John Cradden
With the exception of car insurance, we are more likely to switch gas and electricity providers than any other service thanks to very attractive discounts on offer. But the savings achieved by doing so are usually lost if you don't switch at least once a year, experts say.
According to figures from the Commission for Energy Regulation, over 16pc of electricity customers and 17pc of gas customers switched suppliers in the period between July 2014 and June 2015, putting Ireland close to the top of the European table for switching rates in these sectors.
The growing development of this strong customer switching culture continues to exert downward pressure on supplier offerings and prices, says the CER.
In addition, falls in wholesale energy prices that took place this year look set to continue into 2016 with suppliers announcing price cuts on a regular basis. These cuts have averaged around 2pc-3pc but, while welcome, is still no reason to be complacent about switching.
Indeed, Simon Moynihan of price comparison site Bonkers.ie terms these reductions by suppliers as "gesture price cuts" merely to keep pace with what their competitors are doing.
Flogas recently announced a 2.5pc cut in gas prices, which would amount to a saving of just €20 on the average annual gas bill. What they are doing is using the savings from wholesale markets to offer bigger discounts, he said.
"What we're seeing now is that customers who are prepared to switch, can now get the biggest discount ever available from an Irish energy provider."
Energia recently announced a discount of up to 26pc for customers who switch to it for gas or electricity or both.
The electricity-only deal offers a 12 month unit rate discount of 26pc and means that an average household will pay over €214 less than they would on standard rates.
The firm's dual fuel offer is a 23pc electricity discount and a 20pc gas discount for 12 months, which translates into a saving of €330 over standard rates.
SSE Airtricity is offering a 25pc discount on electricity for 12 months plus a dual fuel offer of 23pc on electricity and 16pc on gas exclusively through Bonkers.ie.
According to Eoin Clarke of price comparison site Switcher.ie, the cheapest energy deal right now is to switch to Energia's CHEEP260 deal for electricity and to Flogas's Direct Debit discount for 12 months (a saving of €145 for the average household) which translates into a combined €360 annual bill saving.
"The majority of new customer energy discounts expire after a year - when your discount ends you are moved to your energy supplier's standard unit rates. Typically these are the most expensive," he said. "Right now it does not pay to be a loyal energy customer."
Moynihan adds that most people who have switched to cheaper gas and electricity are probably likely only to have done it once in the last three or four years, but the way to keep costs down is to switch at the end of the discounted period. "The other trick is to go back to your existing supplier and ask them for a better deal."
Although they are becoming more popular because of their pay-as-you-go pricing structure, value hunters should probably avoid pre-pay electricity packages from Electric Ireland, PrePay Power and Pinergy as unit prices are higher than bill-pay services. But if it suits you, you could get an 18pc discount on PrePay Power's standard rates for 12 months - but only if you sign up to a 25 month contract.
Switching energy providers is also one of the easiest of all services to switch, as there is no interruption to your supply and no-one needs to visit your home.
When it's as easy as this, it seems hard to believe that four out of five households don't switch regularly, not mention those who have never done so.
A recent survey by Switcher found that 78pc of households have never switched gas supplier and 39pc have never switched their electricity.
All the same, the clear message to energy suppliers from consumers is they could pass on more meaningful price cuts to reflect the huge fall in wholesale prices.
"There is plenty of room to do so given wholesale gas prices are down 23pc in the past year," says Clarke. "The fact remains that an average customer's bill has reduced by around 5pc. Single digit reductions fall well short of the double-digit drop in wholesale energy prices.
"With the global oil surplus expected to continue into 2016, suppliers have no excuses left for refusing to pass on double-digit bill reductions to hard-pressed consumers."