Giving existing customers same rates as new ones ‘worth considering’, firm’s chief financial officer says
Chief financial officer Paul Stapleton said that while Ireland had an “open and competitive” energy market, it was evident that some suppliers were offering very attractive headline electricity and gas rates to lure new customers, while existing customers were often paying much more.
Electric Ireland also offers generous sign-up deals for new customers, which include discounted rates and cashback in some cases.
Mr Stapleton’s comments come as one million residential energy customers in Ireland face hikes in their bills in coming months.
Energia, Flogas, Bord Gáis Energy and Pinergy have all announced electricity price increases, while SSE Airtricity announced in February that it was raising prices for both electricity and gas.
Up to one million customers are facing higher energy bills as a number of firms have hiked prices. Stock image. Photo: Alamy
Today’s News in 90 Seconds – September 17th
The companies blame higher network charges being imposed by the energy regulator to pay for investment in the electricity grid, as well as increased wholesale gas prices.
Electric Ireland – the ESB’s consumer arm – announced last week it would keep electricity prices unchanged and cut gas prices by 4pc.
Electric Ireland’s strategy is very much focused on longer-term value
“I think some suppliers maybe have a strategy to attract customers with very attractive-looking discounts on a short-term basis,” Mr Stapleton said.
“Electric Ireland’s strategy is very much focused on longer-term value and keeping the underlying standard tariff as low as it possibly can.
“Other suppliers may have different ways of looking at that. It’s an open and competitive market and people have choice in that regard.”
Mr Stapleton pointed out that, in the UK, regulations had been introduced during the energy crisis that required electricity suppliers to offer the same price to existing customers that they offer to new customers.
UK regulator Ofgem decided last year to retain that requirement.
“I think it’s something to consider,” Mr Stapleton said.
“Obviously, we want a competitive market. We want customers to have choice. But I think it’s worth considering the customers who can least afford to pay – are they getting the value?”
You’d have to look at the impact on competition and choice
He insisted that while savvy customers could still get good deals, there were many who were not as able to assess their best options.
He said that replicating the UK requirement in Ireland would help to smooth out energy prices for consumers and “moderate the underlying tariffs”.
“On the other side, you’d have to look at the impact on competition and choice,” he added.
“And that is important to have a functioning market. It’s up to the regulator and policymakers to consider all those aspects. But it is noticeable that you’re seeing a lot of divergence now in the underlying tariffs, whereas in the UK, there’s less divergence where existing customers get the same value as new customers.”
He refused to be drawn on specific reasons for the big price increases being introduced by some of Electric Ireland’s rivals.
“I can’t speak for other players in the market,” he said.