Most electricity and gas customers could benefit financially from switching providers, in some cases by up to €330 over 12 months, according to the Commission for Energy Regulation (CER).
In its latest annual report, the commission said while switching rates in Ireland were high by European standards, most Irish consumers were not on the best plan.
It also found that a significant proportion of customers here, nearly 60 per cent, had never switched their domestic gas or electricity supplier despite the enticing discounts available and were maintaining their initial contracts, irrespective of the tariff applied.
In addition, a further number of those that have switched have only switched once, the report said.
The largest reduction in the standard electricity tariff for new entrants was offered by Energia, the report found, while in the gas market, the largest reduction was offered by Flogas.
As of November 2016, the difference between the highest-priced standard plan and lowest-priced discounted plan was €330 for domestic electricity and €197 for domestic gas, based on typical average consumption levels.
The most common reasons for not switching in either market were that customers prefer to stay with a supplier that they trust and/or that they are satisfied with the service, albeit access to technology was highlighted as a barrier in many cases.
As the energy market here matures, CER also noted that renegotiating rates, as opposed to switching rates, were increasing.
It highlighted that the number of successfully renegotiated electricity contracts jumped nearly threefold in a five-month period last year, from 5,250 in November 2015 to 14,982 in March in 2016.
The CER said switching and renegotiating rates were key indicators of retail competition.
The report indicated that retail prices in electricity and gas markets here were roughly in line with European averages and have decreased over time due to competition and reductions in wholesale costs.
However, it indicated that while wholesale prices for electricity fell by 39 per cent between 2013 and 2016, consumers did not enjoy the benefits as supply costs surged by 46 per cent over the same period.
The anomaly stems from a 30 per cent jump in supply costs in 2014, the year the Irish electricity market was fully deregulated, which may relate to higher costs from increased competition. The report said further analysis was required to make a proper assessment.
CER commissioner with responsibility for the retail sector Aoife Mac Evilly said: “The review highlights the many positive developments in competitive electricity and gas markets, which are delivering real benefits to consumers, particularly active consumers.”
However, she said it also pinpointed two areas of concern: the high proportion of “inactive” customers and the spike in supply costs.