Energy prices are rising at an unprecedented rate, putting enormous pressure on family budgets.
Here we try to give a few tips on how to deal with the monster price increases.
Q: Why are prices rising so much?
Rising costs of wholesale energy, particularly gas, around the world have greatly increased the cost of electricity, gas and oil delivered to homes. Energy suppliers pass these higher costs on to consumers in the form of higher bills.
Gas has increased 10-15x in wholesale markets compared to 2020.
During most of 2021, prices increased mainly as a result of Covid-19. The pandemic forced many industries into lockdown, disrupting sensitive supply chains.
The invasion of Ukraine has disrupted gas supplies from Russia, causing dismay and rapid price increases in international markets.
Q: What has been the increase for households so far this year?
ESB’s Electric Ireland with 1.1 million customers drives up electricity and gas prices in May.
The electricity bill of an average household increases by €300 and the gas bill by €220 over the course of a year.
This means Electric Ireland’s average electricity bill has increased by €500 over the last 18 months.
Bord Gáis energy increases from April 25 will result in the average annual electricity bill increasing by €385 and the gas bill by €390.
Energia’s electricity prices will rise 15 percent on April 25, which will cost the average customer an additional €247 a year. Gas prices increase by the same percentage in a move that increases the average cost of an annual bill by €180.
Will there be further price increases?
Unfortunately yes. Around a dozen energy suppliers for private customers are on the market, and the others will follow with price increases.
And it cannot be ruled out that those who have already raised prices this year will leave again.
Remember that last year we had 35 separate price increase announcements.
What is the energy regulator doing about it?
It is government policy that the Utilities Regulation Commission does not regulate end-user prices, whether they be per-unit or standing charges.
This policy is intended to promote competition. The fact that we are living through an energy emergency means we might be wise to reconsider these policies.
Is it still worth switching?
Despite the spate of double-digit price hikes, it’s still worth making the switch.
There are a dozen vendors in this market, all competing fiercely for new customers.
To attract these new customers, they offer discounts of 30 pieces or more to attract the switchers.
These discounts last for a year, after which you’ll get much higher standard rates unless you switch again.
But just because you’re signing up for a year-long discount offer doesn’t mean you’re protected from price increases.
The discount is a fixed discount on the standard unit price for electricity or gas.
When prices go up, you get the same percentage off the standard price, but you end up paying more.
As Daragh Cassidy of price comparison site Bonkers.ie puts it, “Even if prices go up, you can still save up to 30 percent or more on electricity and gas costs by switching suppliers.”
What happens if you don’t switch?
If you don’t switch, you’ll end up on the most expensive standard plan.
Consumer loyalty is often punished in this country, not rewarded.
Switching is easy. Dig up your utility bill and bank details and make some calls. You can also do this online or use the Bonkers.ie website.
Which provider has the best offer?
According to the price comparison site Bonkers.ie, the currently cheapest provider is SSE Airtricity.
The 1 Year Home Electricity 30pc is available for switchers who are willing to sign up for direct debit and accept an electronic bill rather than one sent to them.
It is a 12-month contract and a variable tariff, which means that the unit price of your electricity can go up or down over the contract period.
However, the percentage discount you receive remains the same.
Be warned: SSE Airtricity will likely be next to announce a price increase.
Why are the basic fees increasing?
That’s a good question. Both Bord Gáis Energy and Electric Ireland have announced large increases in their base rates as well as huge increases in unit rates.
Bord Gáis electricity customers will pay almost €300 in subscription fees after the increases come into effect next month and around €283 for Electric Ireland.
A subscription fee is a fixed amount that’s added to your tariff to cover the fixed cost of an electric utility — the cost of powering your home.
Electric Ireland said it would have to further increase its flat rates if it didn’t increase base charges.
The consumer association sees the basic price increase as profit-making.
The cynic might say that suppliers guarantee their streams of income from consumers in the event of a fall in commodity prices and shield themselves from more consumers using less energy by reducing consumption or installing solar panels.
what else can I do?
Many of us will be forced to reduce our energy consumption, especially after the summer.
It pays to make sure your heater is properly insulated.
You can save money by opting for cooler clothes and dish soap.
If possible, choose a 30 degree wash for your clothes and a 50 degree wash for your dishes.
Buy energy-saving light bulbs (LED) because they use about 80 to 90 percent less electricity than a standard bulb and last up to 10 times longer.
https://www.independent.ie/business/personal-finance/q-and-a-with-energy-prices-soaring-which-provider-has-the-best-deal-now-and-is-it-worth-switching-41507343.html Q&A: With rising energy prices, which provider now has the best offer and is it worth switching?