CRU Publishes Review of Energy Supplier Costs

The Commission for Regulation of Utilities (CRU) has today published its analysis on supplier costs in the electricity and gas retail markets in Ireland. This follows the review of how the energy retail market competition has evolved following full price deregulation of electricity and gas retail tariffs that was published in February 2017.

CRU reviews the retail markets to ensure the necessary policies are in place to protect consumers and ensure that competition brings benefits to consumers in terms of quality of services and the competitiveness of retail prices.

The February review established five key findings:

  • Overall the energy market is functioning well in terms of the choice of suppliers and competition among suppliers with increased focus on customer retention by suppliers.
  • Switching levels by customers remained high in comparison to other European Union countries, with some concern that a higher percentage of consumers could benefit by switching supplier or being on a better tariff.
  • Customer satisfaction and trust with suppliers is high, with improvements seen across the majority of suppliers as they become more customer focused.
  • Retail prices are close to the European averages and have decreased over time due to competition and reductions in wholesale costs.
  • While wholesale energy costs and retail prices fell during this review period, network costs and supplier costs increased.

In relation to the final finding of the February review, the CRU were clear on the level of network costs contributing to supplier costs, as these are regulated and the cost drivers for increases in these costs are understood and transparent.  The supplier cost element was not clear and the CRU committed to undertaking a more detailed examination of supplier costs to understand the components of these and supplier’s responsiveness to changes in wholesale gas and electricity prices.

To facilitate this, the CRU requested additional information from electricity and gas suppliers seeking a further breakdown of the total costs faced by suppliers in 2015 and 2016 to allow this analysis to be carried out and provide a clearer picture of the final components of bills for electricity and gas customers to increase understanding and transparency in the energy market.

Posted in Energy