CER review shows a high percentage of consumers could benefit from switching
The review was focussed on competition in the electricity and gas retail markets in Ireland.
The cold weather really took hold at the weekend, which means we were all cranking up the home heating again.
However, it could be costing us more than necessary to do so, according to the latest review from the Commission for Energy Regulation (CER), which says most customers are not on the best plan to suit their needs and energy consumption.
The review highlights the fact that a ‘high percentage of consumers’ could benefit by switching supplier or being on a better tariff.
In fact, you could save up to €362 by switching from standard tariffs to the cheapest deals on the market, so that would definitely be beneficial!
Other findings of the CER’s review of competition in the retail energy markets
The purpose of the CER’s review was to assess how the energy retail market has matured following full price deregulation in both the electricity and gas markets in 2014.
And the review has established five key findings, based on independent research, consumer surveys and analysis from independent EU bodies.
- The energy market in Ireland is functioning well, thanks to increased competition, which has led to the growth of discount plans and incentives for new customers, as well as an increase in retention deals.
- Switching levels are amongst the highest in the EU, but many customers are not on the best plan for them and could benefit by switching supplier or tariff. There is also a high proportion of customers who have never switched, and cohorts of customers who are not engaged in the market.
- Customer satisfaction and trust with suppliers remains high, and improvements can be seen across the majority of suppliers because they have become more customer-focused. The CER says this customer focus has arisen out of their need to compete to not only win new customers, but also to retain existing ones.
- Retail prices are close to the European averages and have decreased over time due to competition and reductions in wholesale costs. The CER said it is clear that consumers who switch supplier are most likely to benefit from the most competitive tariffs, because they are more dynamic.
- Network and supply costs have increased and, while network costs are regulated and the increases are understood, the CER has noted that additional analysis on the increased supply costs element is now required.
What happens now?
The CER has already outlined new rules to protect energy customers, which are coming down the line.
Now, following this review, the CER will be carrying out a more detailed examination to understand the components of supplier costs.
Interestingly, the CER will also look at how quickly suppliers respond to changes in wholesale gas and electricity prices and how they are passing on reductions to customers.
After this, the CER will decide if any other new policies are required, to stimulate consumer engagement and further protect customers - which can only be a good thing.
”Many positive developments in competitive electricity and gas markets”
Speaking about the review, Aoife MacEvilly - the CER Commissioner with responsibility for the retail sector - said it highlights “the many positive developments in competitive electricity and gas markets, which are delivering real benefits to consumers, particularly active consumers”.
However, she added that there are areas that need more attention, saying that:
”it is clear that because many customers are inactive, they are not on the lowest available tariffs”
and the CER would like to do more to ensure that customers are on the best tariffs for their needs.
She also reiterated the point that more work is needed to understand why supply costs have risen and to ensure that customers are getting best value.