Bord Gáis says it is disadvantaged by energy price ruling

STATE COMPANY Bord Gáis says yesterday’s ruling by the Commission for Energy Regulation lifting controls on domestic electricity prices leaves it at a competitive disadvantage.

The commission said yesterday it would end regulation for domestic electricity prices in the Republic from April 4th, a move that will allow State-owned ESB to determine its own price for supplying power to households.

The ESB is the only supplier whose domestic prices are regulated. Competitors Airtricity and Bord Gáis are currently allowed to set their own charges. They have been winning customers from the ESB, and the regulator determined yesterday that around one million households had switched supplier since Bord Gáis, and then Airtricity, entered the domestic electricity supply market in 2009.

While Bord Gáis welcomed the commission’s decision, the company pointed out it was the only operator left in the market whose prices the State still regulates.

The regulator sets the prices it can charge to households and some industrial and commercial users for the supply of natural gas.

“The deregulation of ESB in the electricity market means that all players, other than Bord Gáis Energy, are now free to offer energy products, electricity and gas, to customers, without price control,” the company said.

“It is obvious that this puts Bord Gáis Energy at a competitive disadvantage in the gas markets relative to ESB and Airtricity, particularly in the residential sector. The case for the speedy deregulation of the gas markets is now compelling, and Bord Gáis wants to see this take place without delay.”

All three suppliers offer electricity and gas to customers as part of one package. It is understood Bord Gáis fears Airtricity and the ESB will be able to offer cheaper overall prices to new customers, as they can undercut it on the supply of natural gas.

The commission is likely to deregulate the commercial and industrial market this year – most sources believe this will take place in the autumn. There are no indications of when it will do the same for household prices.

The commission said it decided to deregulate the household electricity market because the basic criteria it had set out last year for doing so had been met.

The ESB is to rebrand itself under the name Electric Ireland.