UTILITY BILLS:It's game on in the price war between electricity and gas suppliers and there are savings to be made, once you read the terms and conditions

THERE WAS enough bluster coming from the State’s three energy firms last week to power a small wind farm. The kerfuffle started when the ESB – or ESB Electric Ireland to give it its snazzy new title – announced a range of hefty electricity price cuts which could see someone knocking nearly €200 off their annual energy bill, as long as they jump through certain hoops.

New customers who pay by direct debit, sign up for online billing and switch to the company’s gas offering will get a total discount of 17 per cent. The company’s existing customers can benefit from the same discounts if they accept the same terms.

If the company had been expecting its big news to be greeted by whoops of delight from all quarters, it was to be disappointed. Within minutes of the announcement, people were, quite reasonably, asking why more than 100,000 of its customers in arrears were being excluded from the discounts.

The stumbling start gladdened the hearts of its two rivals, Airtricity and Bord Gáis Energy, and both took the opportunity to shout about their own hefty discounts on regulated prices that are still open to switching customers.

Airtricity said it was offering discounts of 20 per cent to gas switchers and up to 13 per cent to people who just signed up to its electricity deal.

In a bullish statement, the company claimed the ESB was ripping off “the competitive and market-leading offerings that we’ve been offering to customers since Airtricity entered the market in 2009”. A spokesman said the company offered all gas and electricity customers “the most competitive and greenest deals on dual fuel gas and electricity discounts” and claimed they could get discounts of up to €194 – compared with discounts of €190 from the ESB.

He also said that the company had “noticed today that our customers are contacting Airtricity to complement us on our products, our service and our innovation.” Now, far be it from us to suggest that he may be over-egging the pudding with this last comment, but we have never met anyone, ever, who would go to the trouble of contacting a utility’s call centre to compliment it on the quality of its electricity or gas.

Incidentally, what he did not say was that Airtricity’s standing charges – to cover the cost of networks, call centres and billing – are higher than its two rivals.

The ESB’s standing charges are €92 a year for electricity and €60 for gas, the same as Bord Gáis Energy. Airtricity has a standing charge of €104 for electricity and €72 for gas. When Pricewatch asked why it was higher we got the response: “It just is.” Bord Gáis Energy was also pointing to its own discount prices of between 10 and 14 per cent and a spokesman told Pricewatch the company was cheaper than the ESB “on electricity only for non-dd customers, we are offering 10 per cent off and ESB are eight per cent.” Although the ESB’s two rivals are offering the advertised discounts they do not tell the full story and may muddy the water for many consumers.

The bottom line is this: anyone who made the “Big Switch” to Bord Gáis Energy when the campaign was launched in February 2009, have now been taken off the discounted promotional rates so, all the talk of discounts of between 10 and 14 per cent are irrelevant for them.

If they now switch back to the ESB and pay by direct debit, accept online billing and also switch to the ESB’s gas offering they will save 17 per cent on their electricity costs for the next 12 months and see the unit cost of their gas fall by six per cent.

Similarly, anyone with Airtricity who has seen their promotional offer expire stands to make savings of 11 per cent on each unit of electricity they use if they switch to the ESB and pay by direct debit and sign up for online billing.

Given that the product being offered by all three companies is identical – electricity is electricity, gas is gas – it makes absolutely no sense not to make the switch.

The company will probably not thank us for this ringing endorsement as it has to manage the numbers migrating to it very carefully.

According to the ESB’s Brian Montayne there “are also still issues around our market share.” The company has around 55 per cent of the market now – 5 per cent less than the 60 per cent the regulator said it needed to reach before the market could be deregulated. “We have to manage the campaign to be modestly successful. If we are too successful we could be back under regulation within three months.”

The main aim of the campaign is not to win back the customers it has lost over the last two years but to stop those loses in the future.

The company is not automatically switching its existing customers onto the discounted rates and people will have to be proactive about contacting the ESB to switch on to the “rewards” package. It has over one million customers and a depressing reality is that many of them will never get round to contacting the company or will not realise that they have to make contact to make the savings. If just 30 per cent of customers fail to contact the company over the coming year they will have collectively wasted over €6 million.

The ESB says it is not automatically switching its customers on to the cheaper rates because it wants to incentivise them to make contact and opt in to direct debit plans and register for online billing – both of which will save the company money. The company sends out around 8.4 million bills each year, so by moving everyone online, it will save over €2 million.

While there are no indications that either Bord Gáis Energy or Airtricity or ready or able to cut prices to compete with the ESB’s new offerings, its move might soften their cough when it comes to the price hikes that were said to be in the pipeline arising from volatility on international markets.

Some 60 per cent of the price of a unit of electricity or gas is accounted for by the price of the raw materials and both gas and oil have been in a dramatically upward trajectory over recent months, thanks in no small part to ongoing unrest in North Africa and the Middle East.

A spokesman for Bord Gáis Energy says the company is looking at a “substantial increase” on the price of gas by the autumn. He cold not put a figure on how much, but added ominously, “you are definitely looking at a two-digit increase.”

Such prognosis makes it imperative that people make savings where they can – and right now the easiest way to do that is to make sure you collect what the ESB calls your “rewards” if you are an existing customer, or make the big switch back if you’re not.

How to switch – or stay – with ESB and what you can save if you do

You will need:

- Your electricity meter point reference number (MPRN). On your bill

- Your gas meter reference number (GPRN). On your bill

- Your electricity and gas meter numbers. On your bill

- Bank account details to set up a direct debit.

- Up to date gas and electricity meter readings

Existing customers:

- Account details and bank details (if you wish to set up a direct debit, although it is not mandatory)

- For gas switching you will need: a copy of your electricity bill. Your MPRN which is on your bill.

- Your gas bill for your GPRN and meter number,

- Your gas meter reading

- Your banking details.

How the discounts add up

New customers:

Save 12 per cent (must pay by direct debit)

Save 14 per cent If they accept online billing

Save 17 per cent if they switch to ESB’s gas offering.

Existing customers

An eight per cent discount under “rewards” deal

Save 12 per cent paying by direct debit

Save 14 per cent if you choose online billing.

Save 17 per cent if also switch to ESB’s gas package.