Energia is to cut its home energy prices by up to 20 per cent from the start of October in a move that could save some customers almost €700 on their combined electricity and gas bills over 12 months.
This is the first significant price reduction from one of the State’s large energy providers and reflects a significant recent fall in the price of energy on wholesale markets.
The price cut comes after a period of sustained price increases. Last October, Energia increased electricity prices by more than 30 per cent and gas prices by close to 50 per cent in what was its second significant increase in 2022. In April last year, it increased gas and electricity prices by almost 20 per cent.
Energia’s move is likely to put pressure on other providers to follow suit and comes after repeated calls from politicians and lobby groups for suppliers to pass on savings from falling global energy prices. When contacted by The Irish Times other leading suppliers were tight-lipped about their plans and said they would be kept “under review” with discounts and tariff reductions passed on when possible.
Energia has about 195,000 electricity customers and 67,000 gas customers.
Following the reduction, the company’s smart meter electricity plan customers will see a fall of 20 per on their unit rates, or an average of €357 per year, based on their average annual bill.
Even after today’s reduction, Energia’s prices remain very high and far higher than the EU average
— Daragh Cassidy
Its smart dual fuel customers will see a reduction of 20 per cent on their electricity and gas unit rates, or an average of €682 per year, based on the average annual bill.
Energia electricity customers will see a reduction of 15 per cent on their unit rates, or an average of €305 per year, based on the average annual bill, while gas-only customers will see a reduction of 20 per cent on their unit rates, or an average of €325 per year.
Recent energy price increases have seen the typical household paying more than €2,000 extra for their energy each year. A series of energy credits has offset part of these increases.
Energia spokesman Gary Ryan said the wholesale market had experienced “significant volatility over the past two years”.
He said the price reduction was positive and customer supports would remain in place to provide assistance to customers experiencing difficulty.
Daragh Cassidy, of price-comparison and switching website bonkers.ie, said the reduction was another sign of some “normality returning to the energy market”. He said it was likely the other main suppliers would announce similar reductions in the coming weeks.
However, he noted that “even after today’s reduction, Energia’s prices remain very high and far higher than the EU average”.
“Prices are falling, but they’re falling from really high levels” to begin with ... We’re a long way from prices returning to the more normal levels we last saw in 2020,” Mr Cassidy said.
“It’ll still be a very expensive winter to heat and light our homes. It remains to be seen if we’ll see further price drops from Energia over the coming weeks given how high wholesale prices remain. But the peak of the energy crisis seems to have passed.”
Meanwhile, energy providers who rely on raw materials other than gas will have until the end of the year to pay the windfall taxes that will fall due with the passage of new legislation through the Oireachtas.
This Bill provides for a cap on the market revenues generated by non-gas generators in the wholesale electricity market between December 2022 to June 2023, with the estimated proceeds from the cap likely to be in the range €80 million to €150 million. The proceeds will be used in the electricity sector to provide financial supports to households and businesses affected by high energy prices.
