Dual Fuel Lack of real competition

Damien360

I am just out of contract with Electric Ireland and decided to see what is the best available rates for Dual Fuel.

There is pretend competition. I used my exact kW/hr figures for electricity and gas to compare taken from my account on electric ireland.

There is sod all difference and I believe it is an exercise in muddying the waters to get around regulation. The offers of 10% and 20% off are re-adjusted using standing charge rates, even within the same company. Your standing charge changes depending on plan. Cash back offers were not included and I used bonkers.ie for comparision.

The Bord Gais offer is very odd with a Level Pay system, whereby they take your last years usage, average it over 12 months, and charge you. If you are in credit for 120 then you can claim this back if you remain with them, otherwise they keep it. If you owe them extra, they charge for it.

Airtricity are a bit better but use a Budget pay. It again averages your usage but no penalty in the end like Bord gais. It appears to average current usage instead of Bord Gais system of averaging last years figures.

What is needed to force true competition ?

L1011

It is often (possibly even "usually" or "always") cheaper to get both separately.

There is minimal price competition between each firms cheapest product - their hope is that people won't bother switching when introductory offers or cashbacks end. I've had 150 in cashback on electricity so far and intend to keep whoring until there's nothing left.

893bet

Bordgais don't keep it if it is less than 120. They use it to lower your payments for the following year.

If you leave the company they refund anything owed.

At least that's my understanding.

dudara

But what true competition can there really be? Essentially they are all selling the same gas from the same pipeline, or selling electricity from the main grid.

They are all paying somewhat similar costs to purchase, so I don't imagine that they can sell at very different prices.

Damien360

dudara wrote: »

But what true competition can there really be? Essentially they are all selling the same gas from the same pipeline, or selling electricity from the main grid.

They are all paying somewhat similar costs to purchase, so I don't imagine that they can sell at very different prices.

So why the illusion of competition ?

20% vs 10% etc.

Why do we bother with the different providers ? They all get their electric from one supplier and of course there is one gas supplier.

Begs questions of the energy regulator and the competition authority. Do we need them in this case ?

Damien360

893bet wrote: »

Bordgais don't keep it if it is less than 120. They use it to lower your payments for the following year.

If you leave the company they refund anything owed.

At least that's my understanding.

That is not how I read it. The wording is you "may" get a refund if it is "over" €120 in one year.

Kristopherus

dudara wrote: »

But what true competition can there really be? Essentially they are all selling the same gas from the same pipeline, or selling electricity from the main grid.

They are all paying somewhat similar costs to purchase, so I don't imagine that they can sell at very different prices.

But do we know what they are buying the gas or leccy for?

Dodge

By lack of 'real' competition the OP means they'd like cheaper fuel

If (e.g.) Bord Gais price was the same but Electric Ireland's was double then you'd have the illusion off competition but your bill would be the same

As it is, energy costs here are quite reasonable. Companies probably can't go much lower

ytpe2r5bxkn0c1

Damien360 wrote: »

So why the illusion of competition ?

20% vs 10% etc.

Why do we bother with the different providers ? They all get their electric from one supplier and of course there is one gas supplier.

Begs questions of the energy regulator and the competition authority. Do we need them in this case ?

They are operating under the pricing limits set by the CER.

I love how people complain and throw out the lack competition card when firms are operating in a competitive market with low margins that lead inevitably to similar pricing structures.

Each is trying to market an identical product to attract customers. Result - you couldn't get it any cheaper here from anybody else.

ted1

Damien360 wrote: »

So why the illusion of competition ?

20% vs 10% etc.

Why do we bother with the different providers ? They all get their electric from one supplier and of course there is one gas supplier.

Begs questions of the energy regulator and the competition authority. Do we need them in this case ?

Because many people won't switch after the year is up.

ted1

Carla Happy Scout wrote: »

They are operating under the pricing limits set by the CER.

I love how people complain and throw out the lack competition card when firms are operating in a competitive market with low margins that lead inevitably to similar pricing structures.

Each is trying to market an identical product to attract customers. Result - you couldn't get it any cheaper here from anybody else.

The CER no longer sets the price limits

ytpe2r5bxkn0c1

ted1 wrote: »

The CER no longer sets the price limits

Not price limits but sets the investment levels & development plans and ultimately sets the cost base.

Degag

Damien360 wrote: »

That is not how I read it. The wording is you "may" get a refund if it is "over" €120 in one year.

They don't keep any money you have overpaid.

893bet

Damien360 wrote: »

That is not how I read it. The wording is you "may" get a refund if it is "over" €120 in one year.

It doesn't really matter how you read it.

If it is above 120 you can ask for the refund.

If it is less they adjust your payments for the following year

If you leave at any point they refund any balance owed.

Xterminator

OP there is competition. They compete to attract new customers and stick it to the people who couldn't be bothered switching.

But the wholesale cost is the wholesale cost. no-one is going to sell to you at a loss.

NiallBoo

When thinking about competition, the comparison isn't between companies, it's between the current market rate and what it wound be if there was only one option.

The similarity in price could be taken as a sign that it's working, not that it's failing. That the companies have reached the lowest practical balance.

Lux23

Xterminator wrote: »

But the wholesale cost is the wholesale cost. no-one is going to sell to you at a loss.

Or if they did you could end with serious issues like you have in the insurance sector because they were selling policies for way less than they should have in order to compete. The race to the bottom is not always a good thing.