IBEC ESB and Energy Costs

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Originally Posted by pete

I could only laugh when I heard the ESB claim they are not allowed to reduce their prices. AFAIK the ESB make their price change submissions to the Regulator & he tells them how much of a change they are allowed. If the ESB really cared about reducing prices they would just submit a request to the Regulator & when he refuses they could just point the finger at him.

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They did do this latter. In the press release which was read on the news article announcing Bord Gáis' entry to the market, the ESB said that they couldn't reduce prices because they were set by the regulator. They had some FG politician on to point this out as well, but 90% of the article was given over to the Bord Gáis cost saving. Awful journalism as per usual for this country.

soccerc's points are spot on. But most people won't look into the reality of the situation and will just boggle at the cheek of the ESB. They just want something to moan about. The best thing for electricity prices in this country would be to go back to having the ESB as sole provider and feck any pretence of competition.

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Originally Posted by soccerc

If the ESB are allowed by regulator to reduce prices the competitors will still have enough margin to undercut them due to the price structure the ESB must sell energy to the new entrants.

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That doesn't seem to make sense soccerc, unless you're saying that ESB Networks has to sell energy to the new entrants for less than it can to EBS Supply?

adam

The ESB must sell electricity to competitors for less than it charges retail. So, to make up figures, if the ESB charge E100 for x amount of energy, they must sell that to a competitor for E80, who will happily charge E90 to redirect it and pocket the difference, having done practically no work at all.

I think dahamsta's point is that if ESB netwroks and ESB customer supply are really split, surely networks can sell electricity to customer supply for the same price they sell to Bord gais

Is seems ESB Networks is just the infrastructure. This means ESB Supply must run the Power Stations.

Who do Bord Gais get thier energy from?

I know Airtricity mainly generate their own via win farms.

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Originally Posted by pete

Is seems ESB Networks is just the infrastructure. This means ESB Supply must run the Power Stations.

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Basically.

Interesting that wikipedia notes that "Prices and margins are regulated by the Commission for Energy Regulation with ESB Customer Supply restricted at the moment from discounting from the prices set by the Commission for Energy Regulation unlike competitors due to its significant market operator status." So basically, once enough people switch over, the ESB can start to compete on price again. Which means people will switch back to the ESB, which means they'll get more of a market share, which means their prices will have to go back up, which means...

• ESB Networks manages all infrastructure.
• ESB Generation generates electricity and sells it to Eirgrid.
• Eirgrid buys electricity from ESB Generation, wind farms, etc and sells it to ESB Supply, Bord Gais and Airtricity.
• ESB Supply sells energy at retail level.

The ESB has to go to the Regulator for approval if it wants to adjust it's prices. It can only do this twice a year.

Now, there's the facts, I've saved ye both ye and the journalists doing some actual research. Now ye're qualified to comment.

adam

Links? :p

I'm not sure how important the exact structure of the ESB is in the overall picture; it seems to equate more or less to "the ESB sells to customers", with the various stages broken down.

Either way, as per my post #23, I think your post #22 is broadly what happens. Including the bit where you say it doesn't make sense.

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Originally Posted by pineapple stu

Links? :p

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See post #26! :)

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I'm not sure how important the exact structure of the ESB is in the overall picture; it seems to equate more or less to "the ESB sells to customers", with the various stages broken down.

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It's very important. If the ESB wasn't broken up into these separate entities it would be anti-competitive by design. As it stands, assuming proper regulation, it should work perfectly well. Assuming proper regulation, which is something we just don't do in Ireland.

At the moment it's neither here nor there though, so to put a final nail in the coffin one assertion being made right now, here's a final fact: As of now, the ESB can't lower it's prices to match Board Gais or Airtricity.

adam

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Originally Posted by dahamsta

It's very important. If the ESB wasn't broken up into these separate entities it would be anti-competitive by design. As it stands, assuming proper regulation, it should work perfectly well. Assuming proper regulation, which is something we just don't do in Ireland.

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I suppose Eircom should have broken into similar model.

Not sure of exact purpose of Eirgrid aside from ensuring ESB Supply separated from the other ESBs. Can Irish suppliers buy their power from abroad?

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Originally Posted by pete

I suppose Eircom should have broken into similar model.

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Absolutely. Before the selloff.

Eircom is actually split internally into wholesale and retail divisions, and the regulator is supposed to ensure that there's no unofficial communication between the two. However the comms regulator has essentially been captured by Eircom and is without a shadow of a doubt the worst regulatory body in Ireland.

And make no mistake, Irish regulators are bad. They're generally jobs-for-the-boys outfits run by industry insiders or wannabe Eurocrats, and they're generally funded almost entirely by the industries they're supposed to be regulating.

adam

Will be interesting to see how works in practice but energy supplier change supposed to be quick & easy. There is also a reference number (not customer number) which you use to change which does not allow ESB Networks know who your supplier is i.e. have to treat everyone the same. Something similar for telephone landlines would be good.

No idea what like in other countries but the amount of charges & taxes on standard bill is crazy. The government takes a large chunk through standing charges, public service levys & VAT... :(

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Originally Posted by dahamsta

See post #26! :)

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Doh!! :o

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At the moment it's neither here nor there though, so to put a final nail in the coffin one assertion being made right now, here's a final fact: As of now, the ESB can't lower it's prices to match Board Gais or Airtricity.

adam

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Can't because it's too inefficient or can't because it's not allowed?

The latter. See #27.

Yeah, thought that. This thread is confusing me; it's just four or five of us sitting round a virtual table with virtual pints nodding sagely at each other. Don't recall so much agreement here ever!

I personally think focussing on the regulation misses the point. It is ideologically driven FF that created this mess - whats the point of competition if it actually increases price and reduces service?

Also how long before ESB goes into the gas market, so two state companies can undercut each other...

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Originally Posted by Macy

whats the point of competition if it actually increases price and reduces service?

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Rich businessmen can get even richer creaming large profits (and actually calling what profits they want), instead of it going to countries.

Going off on a tangent, has anybody switched from ESB to Bord Gais? Savings of 10% are pretty sweet if there is no disruption of service or hidden costs (such as ESB charging some fee for the use of the power cables etc).

If you have, are there any questions I should be asking before the switch? Any points I really need to go over?

Don't just jump on the latest-advertised bandwagon, do some research first. There's a horse of a thread on Boards.ie, but you'll need to read the full thing to understand the details. Just skim past the idiots jumping for joy and/or spouting rhetoric about the ESB, they haven't a clue what they're talking about.

http://boards.ie/vbulletin/showthread.php?t=2055491651

Look out for the posts by that dahamsta fella, it looks like he actually did some reading...

adam

So the ESB to bring down prices by 10% next month. Bord Gais & Airtricty going to copy. I see Airtricty are guaranteeing the rate until next January.

Aside from issue of reading meter the fact there is no minimum contract means in theory can switch as many times as you like...