More power to the gas people?

Bord Gais says that it hopes that they will sign 400’000 electricity customers

THOUSANDS of electricity customers have already made enquiries about switching electricity provider to Bord Gais since the option to switch became available from noon on Wednesday.

Alreday many farmers have made the switch as part of an earlier programme of electricity supply liberalisation, but the phones have been hopping since the option to change was introduced.

An Bord Gais has pledged that its charges will be at least 10 per cent cheaper than those of the ESB for the next three years.

The board says it will be easy for customers to transfer to it, and that it is hoping to sign up a fifth of the country’s 1.8m domestic account holders.

The ESB has welcomed the liberalisation of the market, saying that competition was good for everyone and the electricity company is likely to respond to the Bord Gais challenge with a cut in its own prices.

The Commission for Energy Regulation is already conducting a review of electricity prices, and an ESB price cut is likely to follow this.

Energy Minister Eamon Ryan has already made clear that he expects ESB prices to fall by double digits this year.

However, Bord Gais says that if the ESB drops its prices over the next three years, they will also cut theirs. John Mullins, the chief executive of Bord Gais Energy, has also said the price of its gas will be cut by up to 25 per cent, starting in April.

"Two double-digit cuts resulting in a fall of 25 per cent in the cost of gas will be fully implemented by the end of 2009," he said.

Mr Mullin’s said his board’s entry into the domestic electricity market was “an historic occasion". Under an earlier stage of the electricity market liberalisation, he said, 1,000 farmers a week have been switching to Bord Gais for their electricity supplies on the back of a guaranteed 12 per cent.

To switch, Bord Gais says ESB customers should email or phone. They can also switch by emailing or phoning, quoting their meter point reference number from their electricity bill.

Its prices could be up to 14 per cent below those which the ESB is obliged by the regulator to charge its customers.

The discounts will apply to the price of the electricity and not to the “standing charge” element of domestic bills, which is imposed to cover network costs.

Mr Mullins and his colleague, David Bunworth, managing director of Bord Gáis Energy, explained that the experience in other countries has shown that about 50 per cent of household electricity customers move when a new player enters a market where previously there was one established supplier.

The Republic’s electricity market has been open to competition for the last four years, but none of the independent operators has made a serious effort to compete with the ESB on this front as the customer support infrastructure is expensive.

Scottish Southern Energy’s Irish subsidiary, Airtricity, is planning to target domestic customers with a “dual fuel” offer this year.

The ESB pointed out yesterday that it cannot offer discounts on the domestic prices set by the Commission for Energy Regulation. “It is open to all competitors to charge what they like,” the company added.

Bord Gáis is also joining forces with Mountside Properties, a shareholder in the Tynagh Energy electricity venture in Galway, to build four specialised electricity generating plants at a cost of €250 million.

These facilities will follow the completion and firing up of its own €400 million electricity generating station in Whitegate, Co Cork. This is due to begin producing power next year and will have the capacity to supply electricity to 400,000 homes.

Bord Gáis will be the majority shareholder in the venture with Mountside and it plans to build four 100 megawatt peaking plants at four different locations, Cahir, Co Tipperary, Kilkenny; Athlone, Co Westmeath; and Claremorris, Co Mayo.

Mr Mullins explained that peaking plants are used to back up wind generation when wind speeds fall off and to help plug gaps in areas where the national grid is wea

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