Failure to switch fuel firm costs €1,700

Irish consumers who failed to switch gas or electricity suppliers over the last four years have paid almost €1,700 more than necessary, according to the energy regulator.

Only a quarter of customers either switched providers or negotiated better deals with their existing provider in 2018, with the majority missing out on major savings in utility bills, according to the annual report of the Commission for Regulation of Utilities (CRU).

Customers who switched or renegotiated every year for the last four years could have saved €704 on gas, €1,097 on electricity, or €1,696 on their dual fuel costs.

Savings made in switching suppliers, or in negotiating with a current supplier, could help customers beat prices increases, the regulator said.

Seven suppliers announced energy price rises in the past few months, citing higher wholesale prices. On average, the wholesale price of both gas and electricity was 33% higher in 2018 than in 2017, with much of this increase occurring towards the end of the year. This was the predominant factor in seven suppliers announcing energy price increases in 2018.

Overall, in 2018, customer electricity prices increased by 5% and gas prices by 13%.

While the report describes the switching rate as “robust”, only 14% of electricity customers switched supplier last year while 20% of gas customers did.

This is the highest annual gas-switching rate to date. Of total switches, 29% were dual fuel switches.

The figures represent an eight-year high in gas-switching rates and a seven-year high in electricity-switching rates.

When customers who sought and received better deals from their existing providers were added, 24% of electricity customers and 29% of gas customers paid rates lower than the standard tariff last year.

The regulator said the relatively higher rates of switching could be attributed to new consumer protection measures.

These include an annual prompt, by which suppliers must tell customers who have been on the same energy tariff for three years or more of other energy offers and savings that may be available to them. Suppliers are also now required to give customers 30 days’ notice, prior to the end of a fixed-term contract.

Urging consumers to negotiate better deals, the commissioner with responsibility for retail markets, Aoife MacEvilly said:

“We are pleased to see that some of our regulatory measures appear to be helping customers be more active, including the new ‘estimated annual bill’, which helps compare offers, and the ‘30-day notice’ reminders when your current deal is about to expire.”

In total, 24% of electricity customers, and 29% of gas customers, looked for a better energy plan in 2018, through either switching supplier or renegotiating with their current supplier.

“The CRU also asked customers to switch on to their rights, savings, and safety, through our #Switch On campaign, and we hope to continue this in 2019.”