Regulator move paves way for cheaper energy
The decision will allow ESB to set its own prices once enough competition has been taken over by independent suppliers in the energy market.
But ESB has been told that it will also have to change its name or remove its brand from its retail businesses to help boost competition.
Energy regulator Michael Tutty said it had taken years for the energy market to become competitive.
“It’s taken the best part of 10 years to get to today where we can announce that the business side is already fully competitive and the domestic residential market is heading there, almost there,” he told RTÉ.
The stipulation from the Commission for Energy Regulation means ESB will have to cut 17% of its domestic customer base – down to 60% – before it can set its own prices.
Both Airtricity and Bord Gáis Energy have been gaining customers after running high-profile campaigns.
So far, almost one-in-four (23%) have moved from ESB to another supplier, partly due to the promise of lower prices.
Energy Minister Eamon Ryan yesterday welcomed the move to further deregulate the electricity market.
He said it followed 10% cuts in ESB prices for domestic users last year, as well as savings of up to 14% for consumers who had switched suppliers.
“Consumers and businesses are already feeling the positive effects in both their household budgets and their corporate balance sheets.”
The regulator’s changes will kick in for ESB business customers this October.
ESB though will only be able to set its own prices for domestic customers once its share of the home electricity market falls to 60% or below, which is expected by early next year.
While the ESB yesterday welcomed the regulator’s decision, it said it could not make any specific comments regarding future electricity prices at this point.
It expressed concern about having to change its brand, which has been there for more than 80 years, which it said would be a challenge.
Reacting to the announcement, Bord Gáis chief executive John Mullins said the company was “surprised” by the decision that ESB must lower its share of the domestic market to 60% of users.
During discussions with the regulator, Mr Mullins said Bord Gáis had expected ESB would be compelled to shed a higher percentage of residential users.
Mr Mullins also saidESB’s entry back into the open market did not guarantee lower prices for consumers.
The Bord Gáis chief will today tell an engineering conference in Cork about plans to double its wind energy investment over the next five years.
