Airtricity aims for 500,000 customers by supplying gas

ENERGY COMPANY Airtricity hopes its entry into the Irish natural gas market will boost customer numbers to more than half a million.

The Scottish Southern Energy (SSE)-owned company confirmed yesterday that it is set to begin competing with State-owned Bord Gáis in the domestic natural gas market.

The move will make it the first to compete directly with Bord Gáis as a supplier of both natural gas and electricity to household customers.

Managing director Kevin Greenhorn said yesterday that Airtricity has 200,000 Irish electricity customers, and added that its move into natural gas supply would help increase its customer base to more than half a million.

Mr Greenhorn said the move will create 200 new jobs, with 100 of them in customer support and the other 100 – which will be outsourced – in sales. All the positions will be filled between now and April of next year.

Airtricity intends to offer new gas customers a 10 per cent discount on Bord Gáis prices.

It is already offering electricity at a 13 per cent discount to ESB prices. Mr Greenhorn said yesterday that for an average household the price cuts translate into a saving of €210 a year.

Its discount on electricity drops to 6 per cent after the first year. The company has not decided whether it will use a similar pricing structure with natural gas.

The Commission for Energy Regulation determines what Bord Gáis can charge its household and small business customers.

It is the dominant player in the natural gas market with more than 600,000 customers. Its rivals will not have their prices regulated and it will be open to them to offer whatever discounts they want in comparison to the State-owned company’s charges. However, this situation may not continue, as increased competition in the market may end the need for price regulation.

Bord Gáis is also facing competition from fellow State-owned company ESB, which last week confirmed that it has been looking at entering the natural gas market for some time, although it has not yet made a decision.

The ESB and Airtricity supply gas to larger industrial users, but have so far stayed out of the domestic market. Both sell electricity to householders.

If the ESB were to follow Airtricity and begin competing with Bord Gáis, this would bring to three the number of players offering both gas and electricity to households.

That development would bring complete deregulation of both energy markets a step closer. This in turn would mean that prices charged to consumers would, in theory, be determined by market conditions rather than regulation.

The Government is expected to announce that it intends moving the control of Bord Gáis’s networks to an independent subsidiary.