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CER announces Bord Gáis Energy deregulation

The domestic gas supply market is now open to full competition as CER announces Bord Gáis Energy deregulation on 1 July

After successive reviews that saw the full deregulation of the domestic gas market inch ever closer, the Commission for Energy Regulation (CER) has finally announced that Bord Gáis Energy will be deregulated on July 1st.

According to the CER, Bord Gáis Energy will meet the criteria for deregulation by mid June 2014, now that the supplier is on track to meet the minimum market share threshold of 55% in the domestic gas market.

The company is the only remaining supplier in Ireland to achieve full deregulation of its domestic gas supply service. The announcement by the CER to deregulate Bord Gáis Energy also comes at a time when the deal by Bord Gáis to sell the Bord Gáis Energy division to a consortium led by Centrica, is expected to go through in early June.

What will deregulation mean for consumers? With the CER issuing its one month notice period to the market regarding its intention to deregulate Bord Gáis Energy, consumers in Ireland will no doubt be asking ‘what does the decision mean for me?’

Essentially, deregulation of Ireland’s domestic gas market spells good news for consumers. When Bord Gáis Energy’s domestic gas supply service becomes fully deregulated, the company will be free to set their own gas prices for the first time, creating more competition in the market.

This could potentially mean that leading energy suppliers will be incentivised to offer ever-more competitive gas price plans as they vie for more customers. Full deregulation of the market may also see a challenge to Bord Gáis Energy’s traditional stronghold of the domestic gas energy market, as other gas suppliers work to increase their market share.

Commenting on today’s announcement, Eoin Clarke, Head of Switcher.ie, said: “Today’s announcement is welcome news for households many of which are struggling to cope with the rising cost of energy. From July 1st Bord Gáis Energy will be able to set their own gas prices. We expect Bord Gáis Energy to launch new gas and dual fuel tariffs in the coming months. The increased competition should reduce the size of our energy bills”.

Speaking today, Dave Kirwan, Managing Director of Bord Gáis Energy said , “For the last three years, Bord Gáis Energy has offered the lowest standard electricity prices for domestic users in the deregulated electricity market. We are delighted that gas deregulation now offers us the ability to offer our customers new gas products which best meet their needs, as well as new dual fuel energy offers for our customers.” “We know that our customers want to deal with an energy company that gives them great service and great value every day.

“That is why nearly 200,000 of our customers have registered for our Rewards Club, saving over €3m on their energy bills and their grocery shopping to date. Not only that, but we have also helped over 16,000 customers enjoy amazing offers and memorable nights at our Bord Gáis Energy Theatre.” Mr. Kirwan added. Criteria for deregulation met The CER’s Domestic gas market deregulation decision is based on an estimate that all criteria for deregulation will be met in June 2014. This is as follows:

  • A market share based on customer numbers of less than the 55% for Bord Gáis Energy (without the firm rebranding)
  • At least 3 domestic gas suppliers, of which two are non-Bord Gáis Energy suppliers, to hold a market share in excess of 10%
  • Customer switching rates in excess of 10% per year

In relation to the second criteria, the latest market share figures from the CER show that only Electric Ireland and SSE Airtricity have managed to achieve this, taking 21.08% and 17.25% of the gas market respectively. The final criteria has already been met, according to current figures, with average annual switching rate standing at 16.67% between April 2013 and March 2014.

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