Watchdog gives nod for ESB to spark price war
CONSUMERS will soon be paying less for electricity as the Government's energy watchdog will today move to allow the ESB to reduce its prices, the Irish Independent has learned.
National Consumer Agency chief executive Dermott Jewell said last night the move is a "long awaited, very positive move that has the potential to finally really open the market to true competition".
Last year, more then 400,000 households switched from ESB to cheaper electricity suppliers such as Bord Gais and Airtricity -- prompting the Commission for Energy Regulation to announce plans to stop setting the prices charged by the ESB.
There has been criticism that Irish electricity prices had been set artificially high for many years, but the commission always said this was necessary to encourage competitors to ESB to get a toehold in the market and woo customers by offering lower prices than the state company.
However, now that one in five households gets its electricity from an alternative supplier, the commission said it will soon move to stop regulating ESB prices -- effectively allowing it to compete on price with its new competitors.
It is hoped this will spark a price war as it will allow the ESB to cut its prices and attempt to win back customers who have defected to companies such as Bord Gais.
"While international fuel costs will remain the main influence on Irish electricity prices, effective competition has the potential to bring real benefits to all customers through improved choice and quality of tariff products on offer and through further downward pressure on prices," the commission said.
Some 77pc of domestic customers still get their electricity from the ESB, but that is down from nearly 100pc just a year ago.
The commission said price regulation will end as soon as the ESB's share of the market falls to 60pc, which it is expected could happen within a few months.
Bord Gais has run a successful campaign encouraging customers to switch to it for cheaper electricity -- and undercutting ESB's tariffs by up to 14pc.