Most householders to remain with ESB despite deregulation

Bord Gáis has confirmed it has no plans to enter the domestic electricity sector in the short term, citing price concerns as a central factor. Emmet Oliver reports.

From today, the entire electricity market is deregulated and householders are free to change supplier. However, with Bord Gáis now declining to make a domestic offering, most householders will have to remain with ESB - at least for now.

This is because, apart from Airtricty, none of the main industry players are prepared to offer a domestic product.

Some observers hoped Bord Gáis, with its existing gas customer base, might be attracted into the market, but yesterday it said it was too early for such a move.

Mr Paul Kenny, head of electricity at Bord Gáis , said the company was anxious to enter the domestic market "as soon as possible", but there were still major obstacles.

He said one of these was the pricing regime in Ireland.

Mr Kenny said while prices had increased significantly in recent years, there was "not enough headroom" for new entrants.

He said while the company had about 500,000 gas customers, there would be a major cost involved in offering a domestic electricity service.

"The systems are not the same," he said.

The company already had a successful electricity business aimed at large and small industrial users and held an 18 per cent market share, he said.

The company currently gets its power from the Virtual Independent Power Producer (VIPP) auction and from the Synergen plant in Ringsend.

He acknowledged the VIPP auction would come to an end once new stations like Tynagh Energy and Aughinish Alumina came on stream, but said it had other sources of power.

Meanwhile, the Minister for Communications, Marine and Natural Resources, Mr Dempsey, said consumer protection would be a key concern in the newly deregulated market.

He said the Commission for Energy Regulation (CER) would ensure a high standard of protection for customers in their dealings with suppliers. "The CER remit is extended to ensure adequate safeguards to protect vulnerable customers, especially elderly people and those with disabilities, against disconnection," he said.

Mr Dempsey said companies would have to provide customer charters and include information on electricity bills regarding fuel sources and their environmental impacts.

"The new regulations mean that customers, particularly household customers and small enterprises, now have the right to be supplied with electricity of a specified quality at clearly comparable, transparent and reasonable prices," he said.

He said independent suppliers already had 33 per cent of the eligible market.

"This gives a clear signal that we favour a fully liberalised market and will encourage companies to look at Ireland as a place to do business," he said.