ESB customers to save €190 a year in price cut
Market overhaul to benefit households
HUNDREDS of thousands of electricity customers will be able to save nearly €200 a year on their energy bills under a major overhaul of prices to be revealed today.
The ESB is offering the reductions to customers who sign up for a range of new tariffs, as the company is allowed to begin setting its own prices.
Customers who take a supply of electricity and gas from the ESB will make the biggest saving, of about €190 a year.
The move is the culmination of a process to introduce competition -- and lower prices -- by deregulating the energy market.
But hopes of a sustained price war are being dampened by soaring world energy prices, with Bord Gais saying yesterday a "quite significant" price hike for gas was likely this autumn.
The new ESB tariffs will be available to all of the company's 1.4 million customers -- and to the 600,000 who left it for alternative electricity suppliers Bord Gais and Airtricity.
The move will come as a boost to hard-pressed homeowners facing the first in a series of mortgage rate hikes, with the European Central Bank expected to raise interest rates on Thursday.
Customers who want the lowest prices will have to pay by direct debit and receive their bills by email instead of post, as well as getting gas and electricity from the ESB, which is being renamed ESB Electric Ireland.
The ESB said the new tariffs would be up to 17pc cheaper than their current electricity unit prices -- a saving of up to €147 a year for the average household.
This would compare favourably with current savings of 10pc to 14pc against ESB unit rates with Bord Gais, and 13pc with Airtricity, although consumers will be hoping that these companies will respond with further price cuts of their own.
Households that sign up the new scheme but do not take gas from ESB will save €120.
For gas, ESB's maximum saving would be 6pc off Bord Gais rates, which continue to be set by the regulator -- a saving of up to €43 a year.
The new tariffs will be available to new and existing customers who request them, but existing customers will have to have been with the ESB for at least 12 months and have a record of paying their bills on time, and will have to pay by direct debit and accept online billing for the biggest discounts.
An ESB spokesman said the energy provider's primary goal was to stop losing customers, as 5,000 households a week continued to switch and their market share had now fallen to 55pc. But it also hoped to win back customers who had already switched.
While there was growing pressure for general electricity price rises because of increased costs of oil, coal and gas to generate it, it was not envisaged that there would be any increases in the standard rates before October.
Even if they did rise, the 17pc differential would remain, the spokesman said.
An Airtricity spokesman said: "Airtricity has no plans at present to conduct a price review. In anticipation of deregulation it set up its own standard tariff, which came into effect on January 1.
"But that option is open to every energy company and we will always be looking at the cost of power and how the energy markets are developing," he said.
Bord Gais said it would not be making any imminent announcement on rates, but would be monitoring the ESB's prices over coming months, particularly to ensure there was no abuse of the market by a still dominant company.
A "quite significant price increase" for gas is likely next autumn when the regulator sets the new tariffs, said Bord Gais spokesman Larry Donald.
The huge increases would have to form part of the consultation between Bord Gais and the regulator over the summer, he said.
"Gas prices have risen very significantly in recent months, and unless there is a dramatic reversal over the summer, it is probable there will be a quite significant price increase from October 1," he said.
The ESB is also being forced to change its name to Electric Ireland as part of the deregulation process -- as it was felt the old name gave it an unfair competitive advantage. ESB Electric Ireland is an interim name while the rebranding process is being completed.