Customers of departing energy company asked to pay up to 40% more with alternate providers

More than 30,000 customers of Iberdrola, the company which left the Irish energy market last month, were automatically transferred to alternate providers but will pay as much as 40 per cent more for their gas and electricity as a result of the switch unless they proactively contact alternate companies.

When the Spanish-based company left the market, its domestic electricity customers were moved to Electric Ireland, which is the Supplier of Last Resort (SoLR) for electricity, while its gas customers were moved to Bord Gáis Energy which plays a similar role for gas customers.

The purpose of a SoLR to ensure a guaranteed supply of energy to users when a company announces a sudden closure or departure from the market.

However, under the rules overseen by the Commission for the Regulation of Utilities (CRU), affected customers automatically switched to Electric Ireland and Bord Gáis Energy pay the standard unit rate, which is substantially higher than discounted rates offered by suppliers to new and switching customers.

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Under the rules, Iberdrola customers who are now with either Electric Ireland or BGE will not be able to change providers until next September at the earliest.

Emma Pearson signed up with Iberdrola “on the basis of the [32.5 per cent] discounts being offered on electricity and gas”, she said. She told The Irish Times the discounted unit price for gas including VAT was 3.98 cent when she signed up, while the standard rate for gas with Bord Gáis Energy is currently 9.83 cent.

She said that correspondence she received from Bord Gáis Energy did not mention the option of discounted plans that might be available, and while Electric Ireland did make references to discounts they “leave the onus with the customer to research and register for these discounts”.

She said suppliers should be obliged to “provide a comparable discount to consumers when they have been moved against their will in the middle of a contract to a different supplier”.

Ben Vinas had a similar experience when being moved and is now on higher rates for both gas and electricity, despite actively switching to Iberdrola to avail of discounts. “I find that in the middle of an energy and economic crisis, this is totally unacceptable. I feel my rights to choose my provider are being trampled on, and to have someone micromanage the running of my house is despicable. The difference in price over the 90 days will run into the hundreds of euro.”

A CRU spokesman defended the process and said its “priority in the circumstances was to ensure Iberdrola customers continued to have gas and electricity supply, and an orderly transfer of accounts could take place. The alternative would mean a disorderly exit whereby customers could be left without a supplier.”

He said that under the SoLR process, all customers of exiting suppliers are transferred to the standard tariff of that gas or electricity supplier. “However, once the transfer process is complete, customers can renegotiate the standard tariffs with Electric Ireland or Bord Gáis Energy, both of which offer competitive rates.”

He added that the “key message for all customers is to contact Electric Ireland and/or BGE once they have been transferred and have received communication from the new suppliers — if customers do not wish to avail of the SoLR renegotiated rate they can switch supplier [from] September 1st.”

A BGE spokesman said the Iberdrola gas customers it had taken could make contact with it to avail of discounts of up to 38 per cent on gas, while an Electric Ireland spokesman said substantial discounts were also available to its former Iberdrola customers as long as they proactively made contact with the company.