Panda Power’s decision to leave the Irish energy market leaves 50,000 electricity customers wondering what happens their electricity supply just as we enter the winter season.
The company supplies about 3 per cent of the market following aggressive marketing of its service, especially to waste customer of Panda, since its entry to the market seven years ago. That makes it the biggest of the four suppliers to exit over the past year.
Panda also has around 10,000 gas customers, having entered that business only four years ago.
[ Are you a Panda Power customer? What will you do now that it’s exiting Ireland?Opens in new window ]
For those 60,000 accountholders, and anyone else whose supplier decides to leave the market, the question is: what now?
The Commission for Regulation of Utilities (CRU) has a structure in place to ensure that all customers continue to have electricity and gas supplies without interruption. It is called Supplier of last resort.
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How does that work?
When a regulated supplier, like Panda, can no longer provide the service to which customers have signed up, the CRU moves those customers to Electric Irelnad for electricity or Bord Gáis Éireann for gas.
Do I have to do anything?
If you are happy to be moved to those companies, you do not have to do anything. The process will happen automatically. But it might not be your best option. Customers moving under supplier of last resort arrangements will be placed on the standard unit rate of their new supplier. That will almost inevitably be more expensive than what you will have been paying, as most users — especially those who switch suppliers regularly — will be on a discounted unit rate. With energy prices rising dramatically anyway, a move to a standard rate will add further unexpected increases to your bills.
Must I agree to the switch?
No, you don’t have to move to the supplier of last resort. If you choose, you can switch to an alternative supplier yourself before that happens.
How long do I have to make that decision?
Unhelpfully, that depends. It is really down to how long Panda agrees to continue supplying customers before pulling the plug on its service. The utility is in discussions with the regulator which will be looking for a reasonable window — a month or so — for customers to make a move to another supplier voluntarily.
What happens if I am locked into a one-year deal as part of the discounted rate I signed up to?
Once the CRU agrees a window for people to switch from their departing supplier - assuming there is a window before it halts suppliers - customers will be entitled to switch without being penalised under the terms of any discount rate contract. That seems only fair: after all, the supplier is effectively reneging on their agreement to supply power for the contracted period.
But I can move to a new supplier even after being switched to supplier of last resort, can’t I?
You can, but not immediately. When the supplier of last resort protocol is called into action, it includes a restricted period where you are obliged to stay with the rescue supplier — Electric Ireland or Bord Gáis Éireann. And again, the length of this period is not fixed but will be decided by the regulator based on the circumstances — largely the number of people who have to be moved. As an indicator, when Iberdrola, the Spanish operator, decided to exist the market earlier this year — the largest supplier to do so before Panda — the lock-in was just shy of three months. Iberdrola had 32,000 customers at the tie it announced its departure: Panda has nearly twice that, so the period could be as long as six months. We have to wait and see.
What happens to any credit I have with Panda. Will it move with me to my new supplier?
No, it won’t. The suppliers of last resort and the regulator will not have access to Panda payment systems so it will be up to you to contact Panda for the return of any credit owing once you have switched to a new supplier or been transferred under the supplier of last resort process.
