Energy prices still 'way above normal' as Pinergy drops rates

'Other suppliers will no doubt come under pressure to follow Pinergy's reduction,' said Daragh Cassidy of Bonkers.ie

The first price drop from an electricity supplier in two years will save Pinergy customers around €180 on average yearly, but energy market prices are still "way above normal", a consumer expert has said.

Daragh Cassidy of consumer comparison website Bonkers.ie was reacting to the energy firm's announcement that it would reduce pricing for its 30,000 residential customers.

Pinergy said changes to its standard residential electricity prices from March 31 would mean a 7.1% decrease to the typical household cost, or €183 annually.

However, the firm warned that "wholesale pricing remains volatile and inflated", at 300% of the cost before the Covid-19 crisis began.

Mr Cassidy said that even after the reduction, Pinergy is not the least expensive for customers.

“This is obviously welcome news and yet another sign of some normality returning to the energy market," he said. 

"This reduction now makes them one of the cheaper suppliers — if you could use that word in today's market. But its prices are still around 8% above Electric Ireland's — the biggest electricity supplier in the market."

The picture is a "long way from prices returning to the more normal levels we last saw in 2020", he said. 

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Pinergy's decision may compel other firms to follow suit, according to Bonkers.ie. However, consumers overall should not hold their breath, Mr Cassidy warned.

"Other suppliers will no doubt come under pressure to follow Pinergy's reduction," he said. 

However, a lot will depend on their hedging strategies and when they bought their gas and electricity. 

"And some suppliers like Electric Ireland and Prepaypower already have cheaper unit rates so may not respond at all until prices on wholesale markets drop further."

Households and businesses have been hammered over the past year with soaring energy prices and the cost-of-living crisis. Many businesses have reported five-figure monthly energy bills that they claim are not sustainable.

Mr Cassidy said the outlook for hard-pressed households is much more positive than even a few weeks ago.

"Hopefully we'll see more widespread reductions in the second half of the year," he said. "The peak of the energy crisis seems to have passed.”