Bord Gáis changes pledge on price cuts

BORD GÁIS Energy has dropped its promise to undercut the ESB’s domestic energy prices for the first three years of operation and blamed the energy regulator for moving too quickly to deregulate the State’s energy market.

When the company first entered the domestic market in February 2009 it said it would charge customers who switched from the ESB at least 10 per cent less in the first year and at least 5 per cent in years two and three.

Speaking to The Irish Timesyesterday, however, Bord Gáis Energy's managing director David Bunworth said the company had changed its terms and conditions and was now offering a 10 per cent discount in year two but would make no commitment on discounts for the third and subsequent years.

“We are now going to concertina the two 5 per cent discounts into one year,” he said. “Effectively we are saying that we are going to give the people the money up front.”

The company says it has been forced to alter its three-year price commitment because the domestic energy market is to be deregulated next year, after which the ESB will be in a position to compete on price with both it and Airtricity.

The Commission for Energy Regulation (CER) sets prices for ESB but its competitors are allowed to undercut these charges. The CER has said it will deregulate the domestic electricity market when the ESB’s market share falls to 60 per cent which is expected to happen by early next year.

Bord Gáis Energy currently has 400,000 customers and is signing up about 950 new customers each day. Airtricity has about 100,000 electricity customers.

Mr Bunworth denies the truncating of the pricing commitment is a breach of faith. “It was a moral more than a physical contract but the rules have changed. It was based on regulated prices.”