Tag Archives | Bord Gais Energy

Pre-paying for your electricity is unlikely to save you money

We’re seeing a lot of advertising recently from suppliers of pre-pay, or pay-as-you-go electricity supply services. One of the advertising slogans used is “no more shocking bills” which to me seems to give the impression that might be saving money by switching.

To be fair to the companies involved, most of the advertising pitch is based around “control” – “Always in control – With Pinergy you are the boss”, and “Sign up to PrePayPower now and enjoy having total control over your electricity costs!”

Control costs, or control usage

Technically – none of us have, nor can our specific electricity provider provide us with, control over the costs we pay for electricity. We can choose our electricity provider to avail of the costs they charge for electricity, but once signed-up, we can’t control what they charge us.

However, when it comes to control of our electricity usage don’t we all have control over that already, no matter who our electricity provider is? We have that control whether we’re with Electric Ireland, Airtricity, Bord Gais Energy – never mind Pinergy or PrePayPower.

Just because we have to regularly load up a meter in our hallway, or pay a regular direct debit, the principles of how we use – or don’t use – electricity will always be the same. And how we control our usage of it as well.

Pre-pay Electricity is Expensive Electricity

Leaving aside the bogus “control” factor therefore, moving to a pre-pay electricity service provider, like for like with the regular providers, will cost you more. So, you’re paying extra to get “control” that you already have. Pointless!

Specifically, you pay 37.5c per day for the pre-pay meter that will be installed in your house. That’s an extra €136.87 per year added to cost of electricity. That you have no control over if you sign up to them.

That charge is on top of the electricity standing charge (€125 to €169 per year) that you pay no matter which electricity service provider you use, and on top of the Public Service Obligation Levy as well (€31.60 per year).

At the moment, you can have your pre-pay meter installed for free, but who’s to say that that won’t cost you either. And presumably, you’ll get stuff for any maintenance costs on the meters as well.

No savings on cost

And just to clarify, the pre-pay electricity service providers do not provide electricity at a cheaper rate than the standard ESB rating. Pinergy “guarantee to match the standard electricity tariffs of Electric Ireland”, while PrePayPower promise that “Our rates match Electric Ireland Standard Electricity Price Plan’s unit charge and standing charge”.

Both company websites are, in fact, so similar, I did have to a special to check that they were actually different companies.

You can’t shop around

And despite their similarities, because of the fact that you need a company specific meter installed, switching electricity suppliers to try to get a better deal becomes a lot more complicated.

Worth switching?

While I appreciate that certain consumers are living from day to day when it comes to their income and expenses, based on the information above, switching to a pre-pay electricity supplier doesn’t seem to be an answer. Yes, you can see your money being spent and used on a daily or weekly basis as opposed to monthly or bi-monthly, but given the way you’re charged, it seems to be a false economy.

  1. You pay more
  2. You don’t get any more control over your electricity usage
  3. It’s harder to switch electricity suppliers to get a better deal

What to do?

Firstly, as a simple change, if your regular bills are just too big, you could set up a weekly or monthly standing order to pay a fixed amount for your electricity instead of paying by direct debit. That’ll smooth out over a year – overpaying in the summer while underpaying during the winter.

Before taking the drastic move to a pre-pay electricity supplier, try to cut your own electricity bill – work on controlling your usage and see about switching to a cheaper supplier.

In these tougher economic times, I don’t see how switching to a more expensive service supplier can be the solution to cutting costs.

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Irish consumer inertia – it’s why we’re ripped off so much

80,000 switch from ESB to Bord Gáis
I’ve written here a few times recently about the advent of a sort of competition in the electricity market recently with the entry of Airtricty and Bord Gais Energy to the residential home electricity market to compete with the ESB.

Switching to either of these competitors will get you discounts of 10-14% on your current ESB bills.

So, have you switched? Why not?

According to this article from RTE News in the last few days, while 80,000 people have made The Big Switch from the ESB to Bord Gais Energy, the ESB still has 95% of the electricity supply market.

If you can be guaranteed, as Bord Gais Energy have, to get electricity from 5-10% cheaper for the next 3 years, why would you not change your electricity?

Is it because of one of the biggest problems with Irish consumers that allows us be consistently ripped off over the past 4 or 5 years?

Consumer Inertia is not the friend of the Irish consumer, but is best buddies with the many non-competitive and high price charging Irish based businesses.

This is a great example of consumer inertia that this country suffers from in all areas of consumer behaviour.

All it takes to change electricity supplier is to make a single phone call, yet so relatively few ESB customers are doing so. If you don’t want to change to Bord Gais Energy, then you could always change to Airtricity instead – either way, we’re getting what we’ve been calling for for ages – an alternative to the ESB.

So why not change? Get up off your behind and make the call now! What do you owe the ESB by staying as one of their customers?

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Nugget of information from the European Consumer Centre

I’ve written in the past how it’s worthwhile signing up for the Eurpoean Consumer Centre monthly newsletter – go here to sign up.

This month had a little nugget of information that I wasn’t aware of but is definitely something to remember:

I have a subscription to satellite television and have just received a letter from my supplier informing me that I am now being charged extra for paying each monthly bill by credit card rather than by direct debit. Is this illegal?

Sections 48 and 49 of the Consumer Protection Bill (enacted on 1st May 2007) were introduced in order to ban traders from levying extra charges on consumers who chose one method of payment in preference to another, when those methods of payment are accepted by the trader. These measures were introduced as a result of controversy over the decision by NTL to impose a €2 per bill charge on customers who do not pay by direct debit. However, when the Act entered into force, Sections 48 and 49 were not commenced and, as a result, this practice is still possible.

This is typical of how our current Fianna Fail government operates. They’ll do something in the name of addressing a public controversy to be able to say that they’ve done it-  like introducing this legislation – and then when everyone forgets about the issue thinking that it’s been fixed, the follow through is actually forgotten and things carry on as before. A similar thing happened when there was legislation proposed to get rid of credit card surcharges.

On the positive side here, the recent entrants to the electricity market have shown how this can be handled differently, and better in my view.

Airtricity and Bord Gais Energy have provided discounts to people who pay in the way that they want (direct debit) rather than doing the NTL thing of penalising those who don’t.

Obviously the more cynical amongst us might say that the extra cost is already factored into the offered price before the discount is offered, but lets just be happy with what their trying to do.

I wonder when, or if, this legislation above will acutally be signed into law though?

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So where’s the cheapest electricity now?

Irish News of the World

Sunday 8th March, 2009

Diarmuid MacShane

Reader Question – So where is the cheapest electricity now?

Q: A couple of weeks ago, you wrote about Bord Gais and Airtricity selling cheaper electricity. But in the last week, both the ESB and Airtricty have announced cheaper electricity prices. Who’s now the best value for electricity now?

A: If you’re a gas customer of Bord Gais, then getting your electricity from them also will be your cheapest option. They guarantee for 1 year that they’ll give you a 14% discount on whatever the ESB price is. So, with the ESB price drop this week,that would mean you’ll save 24% or nearly €250 on your average yearly electricity costs.

If you’re not, you’d get a 12% discount from Bord Gais, but Airtricity will still give you a 13% discount – almost as much as a saving per year.

Remember though, while Bord Gais Energy will guarantee their discounts, Airtricty only say that they’ll do their best to keep the discounts in place.

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Switch to save more: At last, the power of real competition

Irish News of the World

February 22nd, 2009

Diarmuid MacShane

Electricity Competition Arrives in Ireland

Like the 19A bus, we wait for 4 years for a competitor to arrive for the ESB in a deregulated electricity market, and then in a month we get two – Bord Gais Energy and Airtricity. But before we get carried away, there are 19 electricity suppliers in the UK so we’ve a long way to go.

This is still good news for the Irish consumer. But how much can we actually save, and is everything as good as it seems. And more importantly, are there any catches?

Bord Gais Energy this week announced a promise to new customers that they will be always at least 10% cheaper than the ESB for the first year you sign up to them. They then guarantee to be 5% cheaper than the ESB for year 2 and year 3 after that.

If you’re a gas customer of Bord Gais already, they’ll give you an extra 2% discount, and as in incentive to pay by direct debit, they’ll give you another 2% off.

For the average electricity customer who can pay up to €1000 per year on electricity that’s a saving of between €100 and €125 per year.

Airtricity arrived a couple of weeks ago to the household market, but things are a little more complicated as they have 6 different discount levels. Depending on how you pay, they will give you between a discount of between 3% (paying by cheque) and 10% (for the Level Payment Plan and eBill).

Airtricity don’t provide a discount guarantee like Bord Gais Energy, but they’ll “endeavour” to provide the same discounts no matter what the ESB does.

So moving to Airtricity will save the average electricity customer up to €90 per year.
But with Airtricity you do have the benefits of using electricity that’s significantly greener than its competitors. 79% of electricity from Airtricity is from renewable resources, compared to 16% from Bord Gais Energy and 9% from the ESB.

This all sounds too good to be true – so where’s the catch?

For a start, even with these reductions, we’re still paying too much for our electricity. Last November, Sustainable Energy Ireland reported that Irish consumers were paying 20% more for our electricity than our European neighbours. But it’s a start I suppose.

What about switching away from the ESB? We’re told that switching will be simple and that we won’t even notice. We just ring up, give a meter reading and our meter number from our bill and that the rest will happen in the background.

But many of us tried to change land line or broadband provider in the past where the change was supposed to be equally simple. Given reports already this week, the ESB will be losing customers by the thousand, so it remains to be seen how easily the ESB will give up their customers.

A frequent problem when switching phone or land line providers in the past has been consumers receiving two bills – one from their new company and one from their old one. Given that an electricity bill is hard to read in the first place, this has the potential to cause serious headaches if companies get it wrong.

A further potential problem, similar also to what happened when the telecoms market opened up, could be the sales tactics of the competing companies trying to win your new business, or to win you back after you switch.

This was the source of enormous problems for electricity customers in the UK following their electricity deregulation, particular for older customers. Unscrupulous sales people were found to use bullying tactics to try to get customers to switch providers, or to switch back to their old supplier after moving. In some cases it was found that sales people actually forged signatures on switching forms to boost their commissions.

So what should consumers do?  Recently, we’ve had reports that Minister Eamon Ryan and Taoiseach Brian Cowen hoped to see the ESB reduce its prices in the next couple of months, possibly by up to 15%.

If you’re not keen on switching then you might still save yourself over €125 anyway by staying put. But that’s in the future. Moving today to Bord Gais Energy can save you that much immediately, and possibly a total of €250 if the ESB do drop their prices.

Check out TheBigSwith.ie or Airtricity.ie if you want to find out more, or ValueIreland.com for more research on electricity competition.

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