BORD GÁIS has signed up more than 9,000 new customers within 36 hours of entering the residential electricity market.
The company promised it would undercut the ESB’s electricity prices by between 10 per cent and 14 per cent this year and a minimum of 5 per cent over the next two years.
Since noon on Wednesday, customers have been switching either through the website address www.thebigswitch.ie or through its customer helpline.
Bord Gáis spokeswoman Kathleen O’Sullivan said the company was “absolutely delighted” by the response as it had expected about 5,000 new customers by the end of the week.
“This exceeded our expectations. People have been surprised at the ease in which they can switch electricity suppliers.”
Ironically, the ESB generates most of the electricity which Bord Gáis is selling on at a lower cost to customers.
There has been a deregulated market in electricity since February 2005, but, before Wednesday’s announcement, the only operator in the residential market was Airtricity which has about 5,000 customers. It is offering electricity prices at a 10 per cent discount to those of the ESB.
Ms O’Sullivan said Bord Gáis had previously concentrated on building up its business customers first before embarking on the retail market.
“There is potentially 1.8 million customers out there, so there is a fair bit of planning involved.
“We wanted to make sure we had it absolutely right. You get only one chance to launch something like that.”
The ESB said it “had both hands tied behind its back” in responding to Bord Gáis’s initiative because its prices were set by the Commission for Energy Regulation (CER).
“The ESB is not allowed to retain or win back customers because of the deregulation of the market. We have to allow customers to move freely in a competitive environment,” a spokesman said.
The ESB will be hoping that the regulator will move to cut electricity prices soon. The regulator has already been mandated by both Taoiseach Brian Cowen and Minister for Energy Eamon Ryan to reduce ESB prices by at least 10 per cent. CER business information manager Paul Brandon said it is expecting to give more details of a cut in ESB electricity prices next week, but was unlikely to make a final announcement.
He said there was “no doubt” there would be a price decrease because of dramatic falls in the cost of oil and gas. However, it still remained to be seen whether it could be brought forward from October as had been indicated earlier this year.
“We have to look at all of the ESB’s costs in detail to determine whether there is scope for a price reduction in the first place,” he said. He warned, however, that the ESB’s price would not be set to compete with Bord Gáis.
“It won’t be a case of trying to match Bord Gáis’s discount. It is a matter of trying to find what the correct price for ESB electricity is to reflect the actual costs involved.”
Bord Gáis chief executive John Mullins has pledged to undercut ESB electricity prices by 10 per cent irrespective of what tariff is set by the regulator.
