An Coimisiún um Rialáil Fóntas Commission for Regulation of Utilities Electricity and Gas Retail Markets Report Q2 2017 Information Paper Reference: CRU 17290 Date Published: 06/10/2017
An Coimisiún um Rialáil Fóntas Commission for Regulation of Utilities Public/ Customer Impact Statement The purpose of this report is to provide industry, consumers and interested stakeholders with relevant information 1 on the development of competition in the electricity and gas retail markets in the second quarter of 2017. Market monitoring forms an important part of CRU s activities. The information collected through market monitoring helps to inform new policy and in the assessment of existing regulations. This report is part of a suite of other reports including monthly switching reports, annual reports and emerging reports based on new market monitoring data which CRU began publishing in 2016. The information on the retail markets as provided in this report gives an insight into how the retail market is functioning and any specific issues that need to be addressed. This report details changes in market shares in the electricity and gas retail markets up to Q2 2017 and presents information about customer switching, renegotiations, prices and levels of discounts available. The report also provides up to date information on trends in disconnections, PAYG installs and debt flagging. For any queries on this report please contact retaildata@cru.ie. 1 The primary sources of data in this report are: Electricity: MRSO (Meter Registration System Operator), ESBN (ESB Networks) and Gas: GPRO (Gas Point Registration Operator), GNI (Gas Networks Ireland). Information for a number of market monitoring indicators is also provided by suppliers. 1
Q2 2017 Electricity and Gas Retail Markets Overview ELECTRICITY AND GAS RETAIL PRICES Wholesale electricity and gas prices 2015 2016 2017 Wholesale price rising. But still lower than 2015 average MARKET DEVELOPMENTS Domestic Customer Market Share Domestic Switching 50% 49% 10.3% 35%* *Increase in gas switching a likely result of PrePayPower entering the gas domestic market and a number of existing suppliers providing a new PAYG offering 1.52% -2.89% 0.52% -0.89% Low levels of repeat switching. 51% of electricity and gas customers who switched in the last 12 months defaulted to a standard tariff ENERGY CUSTOMER PROTECTION 800% increase gas lifestyle PAYG installations from last year. 2 6% domestic electricity customers in arrears for over 30 days 11% of these are on a payment plan Demand for gas PAYG payment plans newly offered from BGE, Flogas and PrePayPower 11% domestic gas customers in arrears for over 30 days 16% of these are on a payment plan 38%-51% payment plans broken each month Reduction in disconnections and PAYG financial hardship installations
An Coimisiún um Rialáil Fóntas Commission for Regulation of Utilities Table of Contents PUBLIC/ CUSTOMER IMPACT STATEMENT... ERROR! BOOKMARK NOT DEFINED. TABLE OF CONTENTS... 3 1. INTRODUCTION... ERROR! BOOKMARK NOT DEFINED. 1.1 BACKGROUND... 5 1.1.1 Introduction... 5 1.1.2 Related Documents... 5 1.1.3 Summary... 6 2 ELECTRICITY AND GAS RETAIL PRICES... 11 2.1 WHOLESALE ENERGY PRICES... 12 2.1 DOMESTIC ELECTRICITY PRICES... 13 2.2 DOMESTIC GAS PRICES... 14 2.3 DOMESTIC DUAL FUEL PRICES... 15 2.4 CHANGES IN STANDING CHARGES AND UNIT CHARGES OVER TIME... 15 2.5 NUMBER OF CUSTOMERS ON STANDARD VS DISCOUNTED PLANS ELECTRICITY... 16 2.6 NUMBER OF CUSTOMERS ON STANDARD VS DISCOUNTED PLANS - GAS... 19 2.7 NUMBER OF CUSTOMERS DEFAULTING TO STANDARD TARIFFS... 20 2.8 FEATURES OF PLANS... 22 2.9 SUMMARY ELECTRICITY AND GAS RETAIL PRICES... 23 3 MARKET SHARE DOMESTIC ELECTRICITY... 25 3.1 DOMESTIC ELECTRICITY MARKET SHARE BY CUSTOMER NUMBERS AND MWHS... 25 3.2 SUMMARY MARKET SHARE DOMESTIC ELECTRICITY... 26 4 MARKET SHARE DOMESTIC GAS... 27 4.1 DOMESTIC GAS MARKET SHARE BY CUSTOMER NUMBERS AND GWHS... 27 4.2 SUMMARY MARKET SHARE DOMESTIC GAS... 28 5 CUSTOMER SWITCHING AND RENEGOTIATIONS... 29 5.1 ELECTRICITY, GAS AND DUAL FUEL SWITCHING IN Q1 2017... 29 5.2 RENEGOTIATIONS... 32 3
An Coimisiún um Rialáil Fóntas Commission for Regulation of Utilities 5.3 SUMMARY CUSTOMER SWITCHING AND RENEGOTIATIONS... 33 6 FINANCIAL HARDSHIP PAYG... 35 6.1 SUMMARY FINANCIAL HARDSHIP PAYG... 38 7 DEBT FLAGGING... 39 8 DISCONNECTIONS... 40 8.1 DISCONNECTIONS TOTAL... 41 8.2 DISCONNECTIONS-ELECTRICITY MARKET... 42 8.3 DISCONNECTIONS- GAS MARKET... 44 8.4 SUMMARY DISCONNECTIONS... 45 9 ARREARS AND PAYMENT PLANS... 46 9.1 SUMMARY ARREARS AND PAYMENT PLANS... 49 10 NON-DOMESTIC ELECTRICITY MARKET SHARE... 51 10.1 SMALL AND MEDIUM BUSINESS ELECTRICITY MARKET SHARE BY CUSTOMER NUMBERS AND MWHS... 51 10.2 MEDIUM BUSINESS ELECTRICITY MARKET SHARE BY CUSTOMER NUMBERS AND MWHS... 52 10.3 LARGE ENERGY USERS ELECTRICITY MARKET SHARE BY CUSTOMER NUMBERS AND MWHS... 54 11 NON-DOMESTIC GAS MARKET SHARE... 56 11.1 INDUSTRIAL AND COMMERCIAL GAS MARKET SHARE BY CUSTOMER NUMBERS AND GWHS... 57 11.2 MEDIUM SIZED NON-DOMESTIC MARKET SHARE BY CUSTOMER... 58 11.3 DM AND LDM MARKET SHARE BY CUSTOMER NUMBERS AND GWHS... 60 12 NON-DOMESTIC DISCONNECTIONS... 62 13 NEXT STEPS... 64 4
1. Introduction 1.1 Background 1.1.1 CRU s role in Retail Market Monitoring The Commission for Regulation of Utilities (CRU) is Ireland s independent energy and water regulator. CRU was established in 1999 and now has a wide range of economic, customer protection and safety responsibilities in energy. CRU is also the regulator of Ireland s public water and wastewater system. CRU s primary economic responsibilities in energy cover electricity generation, electricity and gas networks, and electricity and gas supply activities. The overall aim of CRU s economic role is to protect the interests of energy customers. CRU has an important related function in customer protection by resolving complaints that customers have with energy companies. CRU s core focus in safety is to protect lives and property across a range of areas in the energy sector. In 2014 CRU was appointed as Ireland's economic regulator of the Irish public water and wastewater sector. CRU has an important statutory role to protect energy consumers and to monitor the electricity and gas retail markets to ensure that customers are benefitting from competition. A key strategic goal of CRU is to protect consumers so they can benefit from competition through fully competitive wholesale and retail markets. Market monitoring forms an important part of CRU s activities, in terms of providing oversight of the market, informing new policy and assessing existing regulations. Electricity and gas retail market reports are published by CRU on a quarterly basis and provide information on trends in prices, switching, market share and customer protection. The aim of these reports is to provide an overview of competition in the electricity and gas retail markets and provide consumers, industry and relevant stakeholders with information over time. 1.1.2 Related Documents Information on CRU s role and relevant legislation can be found on CRU s website at www.cru.ie 5
1.1.3 Summary Electricity and Gas Prices The All island wholesale electricity price (SMP) from 2012 to June 2017 is presented in this report. In the first part of 2017, the wholesale price of electricity has been higher than the average price for 2016 but is lower than 2015. The wholesale gas price at the UK trading hub, which sets the wholesale gas price in Ireland, also increased in 2017 and was higher than the average price for 2016. Again, the wholesale gas price is still lower than in 2015, and has been mitigated by falls in Sterling versus Euro. In March 2017, the least expensive annual average bill in electricity (based on typical consumption of 4,200kWhs) for a standard plan was with BE Energy at 940.15. The least expensive discounted plan was with Energia with an annual average bill of 770.35. The least expensive annual average bill in gas (based on typical annual consumption of 11,000kWhs) was with Electric Ireland at 735.07. The least expensive discounted plan was with Flogas with an annual average bill of 614.44. In Q2 2017, Electric Ireland, Energia, Bord Gáis Energy and SSE Airtricity offered dual fuel plans to customers with price discounts for domestic customers that avail of both services from the same supplier. The least expensive dual fuel offer was with Energia, with an annual average bill of 1,433.18. 6
Market Share Domestic Electricity In Q2 2017, Electric Ireland had the largest domestic electricity market share, with 49.8% of the market in terms of consumption. This was followed by Bord Gáis Energy with 18.21%, SSE Airtricity with 16.09%, Energia with 6.9% and PrePayPower with 5.81%. Between Q2 2016 and Q2 2017, Electric Ireland s market share decreased by 2.89% in terms of consumption. Energia increased its market share by 1.52%. Pinergy increased its market share by 0.08% and held 1.36% of the market in Q2 2017. Market Share Domestic Gas In Q2 2017, Bord Gáis Energy had the largest market share in terms of customer numbers, with 49.36% of the domestic gas market, followed by Electric Ireland with 21.61%, SSE Airtricity with 14.44%, Flogas with 5.93% and Energia with 5.92%. Between Q2 2016 and Q2 2017 Bord Gáis Energy lost 0.86% of market share in terms of customer numbers. Switching and Renegotiations The total number of customers switching in electricity was 73,467 in Q2 2017. This represented a decrease in switching from Q2 2016 where there were 81,920 switches. The total number of customers switching in gas was 30,876 in Q2 2017. This represented an increase in switching of 34.56% from Q2 2016, during which time there were 22,946 customer switches. Between April and June 2017, there were 25,441 dual fuel switches representing 24% of total switches. The total number of internal switches in electricity in Q2 2017 was 53,151, compared to 69,539 in Q1 2017. The total number of internal switches in gas in Q2 2017 was 15,060, compared to 15,360 in Q1 2017. 7
Financial Hardship PAYG and Debt Flagging The total number of electricity PAYG financial hardship installs in Q2 2017 was 1,054, compared to 1,641 in Q2 2016. The total number of gas PAYG installs in Q2 2017 was 2,980. 22.08% (658) of these were for financial hardship reasons. In Q2 2016 1,276 were installed, with 77.35% (987) for financial hardship reasons. In Q2 2017 there were 664 debt flags in electricity and 440 debt flags in gas. Domestic Electricity and Gas Disconnections The total number of disconnections in Q2 2017 was 1,306 for electricity and 707 for gas. Between Q2 2016 and Q2 2017, the total number of electricity disconnections have declined by 20% and the total number of gas disconnections have declined by 1%. Arrears and Payment Plans Between 11% and 18% of customers across all segments were in arrears in Q2 2017. However, it is important to note that this includes all customers that were in arrears for one billing period or more in the reporting period. 6% of total domestic electricity customers are in arrears for longer than 30 days. 11% of total domestic gas customers are in arrears for longer than 30 days. Of those customer in arrears for longer than 30 days, 48% (electricity) and 41% (gas) are in arrears for excess of 90 days. The percentage of total customers per market segment on payment plans is 0.64% for electricity and 0.49% gas indicating that 13,901 electricity customers and 4,523 gas customers are on payment plans A significant number of payment plans, between 38%-51%, are broken each month. 8
Market Share Non-Domestic Electricity and Gas In Q2 2017, Electric Ireland had 35.7% of the small and medium business electricity market in terms of consumption, followed by Energia with 26.78%, SSE Airtricity with 17.19% and Bord Gáis Energy with 12.86%. From the Q1 2017 report, the non-domestic gas market share segments changed based on discussions with GNI to better align with the names and classifications of the gas market segments within the GNI Code of Operations 2. In Q2 2017, Bord Gáis Energy had the largest market share in the IC gas market, with 47.86% in terms of customer numbers. This was followed by Flogas with 22.09%, Energia with 16.03%, Electric Ireland with 7.32%, SSE Airtricity with 4.83% and Vayu with 1.88%. Non-Domestic Electricity and Gas Disconnections There were a total of 280 non-domestic electricity disconnections and 56 nondomestic gas disconnections in Q2 2017. 2 https://www.gasnetworks.ie/corporate/gas-regulation/service-for-suppliers/code-of-operations/ 9
ELECTRICITY AND GAS RETAIL PRICES ELECTRICITY AND GAS RETAIL PRICES 10
ELECTRICITY AND GAS RETAIL PRICES 2. Electricity and Gas Retail Prices This section outlines the range of plans offered by suppliers from April 2017 to June 2017 for domestic electricity, gas and dual fuel customers, including their standard and highest discounted plans. All information presented here is publicly available on price comparison and individual supplier websites. There are a large number of plans available to domestic and business customers. These plans offer customers different tariffs comprised of standing and unit charges (and in some instances other charges). Suppliers can also offer different rates depending on the payment or billing methods of customers (e.g. paperless, online, direct debit etc.). All suppliers are required to publish details of tariff plans that are available to domestic customers. Suppliers of commercial customers often provide bespoke plans and information on such plans is generally not published by suppliers. Some suppliers also offer standard plans to business customers. The first part of this section provides comparisons between suppliers for their standard and discounted plans in gas and electricity, and details price reductions by suppliers in Q2 2017. This is followed by analysis of new data received by CRU from suppliers. Data on the top ten electricity, gas and dual fuel plans per supplier in terms of customer numbers is provided to CRU on a quarterly basis. This includes information on the price components of each plan, discounts, consumption and customer numbers and has been used for analysis of the number of customers on different levels of discounts and standard plans. It should be noted that this does not represent all customers in the market as suppliers may have more than ten plans which are not reported under the new market monitoring framework. Price comparison websites are useful tools for customers to compare prices across suppliers. CRU has an accreditation framework which reviews the energy price comparison service provided by websites and only accredits if the site meets defined standards for accuracy, transparency and reliability. There are two CRU accredited price comparison websites: www.bonkers.ie and www.switcher.ie. 11
Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 SMP Euro/MWh ELECTRICITY AND GAS RETAIL PRICES 2.1 Wholesale Energy Prices The wholesale electricity market in Ireland is jointly regulated by CRU and the Northern Ireland Authority for Utility Regulation (NIAUR). This market is known as the Single Electricity Market or SEM. The SEM Includes a centralised liquid spot market where electricity is bought and sold. Suppliers purchase their requirements in half hour periods and pay the System Marginal Price (SMP). The figure below shows the price of electricity in this centralised gross pool market in the SEM between 2014 and 2017, along with the average price across each year. 80.00 SMP /MWh 70.00 60.00 50.00 40.00 30.00 20.00 SMP 2014 2015 2016 2017 10.00 - Figure 2.1 The National Balancing Point (the trading hub for gas in Britain) price in pence per therm of gas has seen a decline since 2014, but increased towards the end of 2016 and in the first part of 2017. From February 2017 gas prices have started to decrease. The figure below shows the change in day ahead gas prices over time at the NBP (National Balancing Point), the virtual trading hub which sets the Irish gas wholesale price. It also shows the average price between 2014 and 2017. In general, although year on year prices are higher than 2015, they are still lower than the average in 2015. 12
Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Gas Euro/therm ELECTRICITY AND GAS RETAIL PRICES 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 - NBP Day Ahead Gas ( /therm) NBP Day Ahead Gas ( /therm) 2014 2015 2016 2017 Figure 2.2 2.1 Domestic Electricity Prices In order for a domestic electricity customer to accurately compare prices between suppliers, the comparison of the estimated average annual bill, using current typical consumption values of 4,200kWhs across suppliers is the best measure. In 2017 there were six suppliers offering both standard and discounted plans for domestic electricity, along with PrePayPower and Pinergy who offered PAYG plans exclusively. BEenergy entered the domestic electricity market in Q2 2017 offering 24 hour and night saver tariffs. Standard Domestic Electricity Annual Average Bills (based on typical annual consumption of 4,200 kwhs) March 2017 June 2017 Electric Ireland 947.18 947.12 Energia 1,032.21 1,032.21 Bord Gáis Energy 945.72 945.72 SSE Airtricity 977.67 977.67 Panda power 1,031.08 1,031.08 BEenergy - 940.15 PAYG Plans PrePayPower 1,090.81 1,090.81 Pinergy 1,083.83 1,083.83 Electric Ireland 1,052.97 1,052.97 13
ELECTRICITY AND GAS RETAIL PRICES Table 2.1 The annual average bill for Lifestyle choice PAYG customers includes an additional supplier service charge which is reflected in the price. In Q2 2017 there were six suppliers offering both standard and discounted plans for domestic electricity, along with PrePayPower and Pinergy who offered PAYG plans exclusively. BEenergy entered the domestic electricity market in Q2 2017 offering 24 hour and night saver tariffs. Most Competitive Discounted Domestic Electricity Annual Average Bills (based on typical annual consumption of 4,200 kwhs) March 2017 June 2017 Electric Ireland 912.23 907.56 Energia 770.35 770.35 Bord Gáis Energy 774.1 774.10 SSE Airtricity 828.46 843.24 Panda power 887.81 887.81 PAYG Plans PrePayPower - - Pinergy - - Electric Ireland - - Table 2.2 2.2 Domestic Gas Prices In order for a domestic gas customer to accurately compare prices between suppliers, the comparison of the average annual bill, using current typical consumption values of 11,000kWhs across suppliers is the best measure. In Q2 2017 there were five suppliers offering both standard and discounted plans for domestic gas, Flogas and BGE also offered PAYG plans. Standard Domestic Gas Annual Average Bills (based on typical annual consumption of 11,000 kwhs) March 2017 June 2017 Electric Ireland 735.07 735.07 Energia 783.66 783.66 Bord Gáis Energy 755.19 755.19 Flogas 747.70 747.70 SSE Airtricity 741.99 741.99 PAYG Plans Flogas - 747.70 Bord Gáis Energy - 755.19 Table 2.3 14
ELECTRICITY AND GAS RETAIL PRICES Most Competitive Discounted Domestic Gas Annual Average Bills (based on typical annual consumption of 11,000 kwhs) Gas March 2017 June 2017 Electric Ireland 706.14 702.24 Energia 686.68 686.68 Bord Gáis Energy 755.19 755.19 Flogas 614.44 614.44 SSE Airtricity 681.83 681.83 Table 2.4 2.3 Domestic Dual Fuel Prices In Q2 2017 Electric Ireland, Energia, Bord Gáis Energy and SSE Airtricity offered dual fuel plans to customers with price discounts for domestic customers that avail of both services from the same supplier. Highest Discounted Dual Fuel Annual Average Bills March 2017 June 2017 Electric Ireland 1,583.52 1,569.89 Energia 1,447.77 1433.18 Bord Gáis Energy 1,569.97 1474.33 SSE Airtricity 1,474.33 1569.97 Table 2.5 2.4 Changes in standing charges and unit charges over time Final electricity and gas bills are made up of a number of components; standing charges and unit rates are charged and some Suppliers may also levy other charges such as those associated with pre-payment meters. Standing charges for electricity and gas plans have not changed significantly over time. For electricity, they have fluctuated between an average of approximately 34c per day and 37c per day 3 depending on the Supplier. These charges should be seen in tandem with any other recurring fixed charge that a Supplier may charge customers. Competition and discounts are usually associated with the unit charge for supplier s plans. Figures 2.3 and 2.4 show the changes in electricity and gas standard and 3 This average excludes the standing charges associated with PAYG plans as additional service charges are also included. 15
ELECTRICITY AND GAS RETAIL PRICES discount unit rates over time per supplier and does not take into account standing charges or any other charges that a Supplier may charge customers. Overall for standard and discounted plans in both markets, unit rates have declined in recent years and the trend across suppliers is similar. In 2016, there were a number of announcements concerning price reductions, however there have been fewer price reductions in the gas market. Figure 2.3 Figure 2.4 2.5 Number of Customers on Standard Vs Discounted Plans Electricity Under CRU s extended market monitoring framework, data on the top ten contracts for each supplier in terms of customer numbers is submitted to CRU on a quarterly basis. This includes data on the number of customers on each plan, the percentage discount, total consumption for the period, the features of each plan and the annual average bill. This analysis does not include all customers in the market but provides a good indication of the level of up-take of discounted plans in the market. 16
ELECTRICITY AND GAS RETAIL PRICES Number of customers reported on top 10 plans for Q2 2017 Electricity 1,646,731 Gas 420,091 Total number of customers in the market 2,048,715 654,717 % of total customers 80.37% 64.16% Table 2.6 This section presents some analysis carried out with data for Q2 2017, looking at the proportion of customers on standard and discounted plans and the breakdown of the range of discounts they receive. Top 10 domestic electricty plans, Q2 2017 90.00 80.00 78.74 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 21.26 Standard Plans Discount plans Figure 2.5 Figure 2.5 shows the percentage of customers on standard and discounted electricity plans in Q2 2017 (as reported through market monitoring). This data indicates that the majority of customers in the market, covered by the top 10 plans, are on standard plans, as shown in previous market monitoring reports showing this breakdown for 2016. This information is based on data received for Q2 2017 from suppliers detailing their top 10 electricity plans, based on the number of customers on each plan. This means that not every customer in the market is detailed here and the data is only representative of the market as a whole. 17
% Electricity Customers ELECTRICITY AND GAS RETAIL PRICES Breakdown of electricity discount plans actual discount 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 <1% 1-5% 5-10% 10-20% >20% Figure 2.6 Figure 2.6 shows the proportion of electricity customers on less than 1% discounts and discounts of between 1-5%, 5-10%, 10-20% and greater than 20%. Based on market monitoring information, most customers who are on a discounted plan are on discounts of between 1% and 5%. These may be rolling discounts on standard plans, where customers receive discounts off their plans for using direct debit and/or e-billing. Customers on discounts of 5-10% and 10-20% are more likely to be on fixed term contracts with higher discounts available. Customers who switch at the end of their contract term can avail of these discounts across suppliers. Analysis suggests that most customers are not on the highest discounted plan available, and in many cases the discounted plans with the most customers have an annual average bill that is only slightly below that of the standard tariff bill. 18
% of customers ELECTRICITY AND GAS RETAIL PRICES 2.6 Number of Customers on Standard Vs Discounted Plans - Gas 90.00 80.00 Top 10 domestic gas plans, Q2 2017 77.56 70.00 60.00 50.00 40.00 30.00 20.00 22.44 10.00 0.00 Standard Vs Discounted Plans Figure 2.7 Figure 2.7 shows the % of customers on standard and discounted gas plans in Q2 2017 (as reported through market monitoring). This information is based on data received for this period from suppliers detailing their top 10 gas plans, based on the number of customers on each plan. A larger proportion of gas customers are on discounted plans than electricity, with approximately 23% of customers receiving some type of discount. Figure 2.8 shows the proportion of gas customers on less than 1% discounts and discounts of between 1-5%, 5-10%, 10-20% and greater than 20%. More gas customers receive larger discounts (greater than 20%) than do electricity customers. 19
% ELECTRICITY AND GAS RETAIL PRICES Breakdown of gas discount plans actual discounts 35 30 25 20 15 10 5 0 0-1% 1-5% 5-10% 10-20% >20% Figure 2.8 2.7 Number of Customers Defaulting to Standard Tariffs Data is also received from suppliers on a yearly basis on the overall number of customers who defaulted to standard tariffs. The indicator refers to the automatic default of a current customer at the end of a contract to a tariff that does not have a new customer discount or a contract term associated with it. 160000 140000 120000 100000 80000 60000 40000 20000 Number of customers defaulting to standard tariffs, 2016 0 Domestic Electricity Small Business Electricity Domestic Gas IC Gas 20
ELECTRICITY AND GAS RETAIL PRICES Figure 2.9 Figure 2.9 shows the number of customers per market segment that defaulted to standard tariffs in 2016. There were 2,041,316 customers in the domestic electricity market in 2016. % of customers defaulting to standard tariffs in 2016 Domestic Electricity Small Business Electricity Domestic Gas IC Gas % of total customers 6.95% 4.75% 7.00% 2.33% % of customers who switched in the last 12 months 51.04% 24.17% 50.58% 16.57% Table 2.7 In 2016, approximately 51% of domestic electricity customers that had switched supplier in the last 12 months defaulted to a standard tariff, when their initial discount period ended. This amounted to 6.95% of all electricity customers. 7% of all gas customers defaulted to standard tariffs, at the end of a discount period, amounting to over 50% of gas customers who switched supplier in the last 12 months. While this is a low percentage of customers overall, taken as a percentage of customers on fixed term discounted plans this indicates that a large number of customers who were active in the market did not renegotiate their contract or switch in 2016. Lower numbers of business electricity and gas customers defaulted to standard tariffs, however a significant proportion of business customers negotiate bespoke contracts with suppliers. 21
ELECTRICITY AND GAS RETAIL PRICES 2.8 Features of plans In the first part of 2017 there was a large variety of payment methods available and different features across different plans. Features included cash based and credit offers, green offers, loyalty schemes and device based offers. Energy based services/free items Climote heating control Nest learning thermostat GE Led Light Bulbs In Home Displays Boiler Services Green offers Hive Active Cashback offers & Points 50-150 cashback 1000-4000 Tesco points 20-50 free top ups Access to loyalty schemes 120 credit on first or second bill Discounts 2%-20% Gas discounts 1%-26% Electricity discounts Duel fuel discount bundles Payment Methods PAYG Direct Debit Bank Transfer Phone Cheque An Post Unit Charges and Standing Charges Standing charges do not vary widely Most discounts are off unit charges Contract terms 12/24 month contract terms with exit fees Most customers default to standard tariffs Table 2.8 22
ELECTRICITY AND GAS RETAIL PRICES 2.9 Summary Electricity and Gas Retail Prices The All island wholesale electricity price (SMP) from 2012 to June 2017 is presented in this report. In the first part of 2017, the wholesale price of electricity has been higher than the average price for 2016, but are still lower than 2015. The wholesale gas price at the UK trading hub, which sets the wholesale gas price in Ireland, also increased in 2017 and was higher than the average price for 2016, but lower than 2015, which has partly been influenced by the fall in Sterling against the Euro. In June 2017, the least expensive annual average bill in electricity (based on typical consumption of 4,200kWhs) for a standard plan was with BE energy at 940.15. The least expensive discounted plan was with Energia with an annual average bill of 770.35. The least expensive annual average bill in gas (based on typical annual consumption of 11,000kWhs) was with Electric Ireland at 735.07. The least expensive discounted plan was with Flogas with an annual average bill of 614.44. In Q2 2017, Electric Ireland, Energia, Bord Gáis Energy and SSE Airtricity offered dual fuel plans to customers with price discounts for domestic customers that avail of both services from the same supplier. The least expensive dual fuel offer was with Energia, with an annual average bill of 1,433.18. 23
MARKET DEVELOPMENTS 24
MARKET DEVELOPMENTS 3. Market Share Domestic Electricity 3.1 Domestic Electricity Market Share by Customer Numbers and MWhs Domestic Market Share 1.32% 5.63% 0.11% 1.2% 6.08% 1.36% 0.37% 1.45% Electric Ireland 5.81% 6.9% SSE Airtricity 16.25% 55.3% 18.21% 49.8% Bord Gáis Energy PrePayPower Energia 14.29% 16.09% Pinergy Others Panda (a) Customer Nos (b) MWhs Figure 3.1, Q2 2017 Domestic Electricity market Share Q2 2017 Domestic Market Share Sites MWhs Electric Ireland 1,130,613 958,697 SSE Airtricity 292,242 309,755 Bord Gáis Energy 332,214 350,545 PrePayPower 124,292 111,767 Energia 115,024 132,848 Pinergy 26,919 26,250 Panda 24,630 27,969 Others 2,311 7,069 Total 2,048,245 1,924,903 Table 3.1, Number of sites and Mwhs per supplier 25
MARKET DEVELOPMENTS Domestic Customers - change in market share Electric Ireland SSE Airtricity Bord Gáis Energy PrePayPower Energia Pinergy Panda Others Q1 2017 Q2 2017 Q2 2016 Q2 2017 Sites MWhs Sites MWhs -0.33% -1.36% -2.36% -2.89% -0.15% -0.40% -0.46% -1.18% 0.18% 0.85% 0.69% 0.99% 0.15% 0.28% 0.61% 0.62% 0.23% 0.41% 1.06% 1.52% 0.04% -0.03% 0.14% 0.08% 0.05% 0.18% N/A N/A 0.02% 0.07% -0.72% -0.60% Table 3.2, % change in market share for Q2 2016 Q2 2017 3.2 Summary Market Share Domestic Electricity In Q2 2017, Electric Ireland had the largest domestic electricity market share, with 49.8% of the market in terms of consumption. This was followed by Bord Gáis Energy with 18.21%, SSE Airtricity with 16.09%, Energia with 6.9% and PrePayPower with 5.81%. Between Q2 2016 and Q2 2017, Electric Ireland s market share decreased by 2.89% in terms of consumption. Energia increased its market share by 1.52%. Pinergy s increased its market share by 0.08% and held 1.36% of the market in Q2 2017. 26
MARKET DEVELOPMENTS 4. Market Share Domestic Gas 4.1 Domestic Gas Market Share by Customer Numbers and GWhs Domestic Market Share 5.93 5.92 14.44 6.65% 15.17% 6.32% 1.65% Airtricity BG Energy 21.61 20.81% Electric Ireland Flogas 49.36 49.4% Energia Vayu Customer Nos (b) GWhs Figure 4.1, Q1 2017 Domestic gas market Share Domestic Market Share Q2 2017 Sites GWhs (Cumulative) GWhs (Q2 2017 only) Bord Gáis Energy 323,176 1,987 530 SSE Airtricity 94,543 603 163 Electric Ireland 141,492 856 223 Flogas 38,848 260 71 Energia 38,740 259 68 Others 17,918 38 18 Total 654,717 4,003 1,073 Table 4.1, Number of sites and GWhs per supplier 27
MARKET DEVELOPMENTS Domestic Gaschange in market share Q1 2017 Q2 2017 Q2 2016 Q2-2017 Sites GWhs Sites GWhs Bord Gáis Energy -0.77% -0.32% -0.86% -0.89% SSE Airtricity -0.04% 0.15% 0.27% 0.52% Electric Ireland -0.54% -0.80% -0.27% -0.35% Flogas 0.07% 0.20% -0.12% 0.00% Energia 0.05% -0.20% -0.25% -0.25% Table 4.2, % change in market share 4.2 Summary Market Share Domestic Gas In Q2 2017, Bord Gáis Energy had the largest market share in terms of customer numbers, with 49.36% of the domestic gas market, followed by Electric Ireland with 21.61%, SSE Airtricity with 14.44%, Flogas with 5.93% and Energia with 5.92%. Between Q2 2016 and Q2 2017 Bord Gáis Energy lost 0.86% of market share in terms of customer numbers. SSE Airtricity was the only supplier to gain customers with an increase of 0.27% of market share. 28
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Net Switching MARKET DEVELOPMENTS 5. Customer Switching and Renegotiations 5.1 Electricity, Gas and Dual Fuel Switching in Q2 2017 Customer switching is a key indicator of retail competition and supplier activity within the retail market. This section contains data on customer switching activity in Q2 2017. 8,000 Net Switching of Customers Per Supplier June 2016-June2017 6,000 4,000 2,000 0-2,000-4,000-6,000-8,000-10,000 Electric Ireland Energia SSE Airtricity Bord Gáis Energy PrePayPower Others Pinergy Panda Figure 5.1, Overall Switching in Electricity, Q2 2016-Q2 2017 The total number of customers switching in electricity was 73,467 in Q2 2017. This represented a decrease in switching from Q2 2016 where there were 81,920 switches. Month Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Total Number of Switches 25,595 26,211 26,902 26,773 24,173 32,301 20,061 21,626 26,926 29,129 25,944 23,137 24,386 Table 5.1 Total switches in electricity, Q2 2016-Q2 2017 29
Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Net Switching MARKET DEVELOPMENTS Net Switching of Customers per Supplier June 2016 to June 2017 3,000 2,000 1,000 0-1,000-2,000-3,000 Airtricity Bord Gáis Energy Electric Ireland Energia Flogas Gazprom VAYU PrePayPower Figure 5.2, Overall switching in gas, Q2 2016-Q2 2017 The total number of customers switching in gas was 30,876 in Q2 2017. This represented an increase in switching of 34.56% from Q2 2016, during which time there were 22,946 customer switches. Month Jun-16 Jul-16 Aug-18 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Total Number of Switches 7,215 7,761 7,805 7,436 7,233 8,233 6,715 9,066 10,092 11,369 10,261 10,629 9,986 Table 5.2, Total Switches in Gas, Q1 2016-Q1 2017 CRU has also begun to collect data on the number of dual fuel switches per month. A dual fuel customer is defined as a site that has both gas and electricity accounts with the same supplier (whether on a specific dual fuel tariff or not). The 'dual fuel switching' indicator refers to the number of dual fuel customers (measured by MPRN/GPRN) that switched, either one account or both gas and electricity, per month. The data is provide by suppliers to CRU. 30
Number of dual fuel customer switches MARKET DEVELOPMENTS Dual Fuel Switches Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Domestic Electricity Domestic Gas Domestic Dual Fuel Total Dom Switches Electricity Switches Gas Switches Total Switches 2,243 1,626 2,447 1,877 1,854 1,662 1,367 1,455 1,810 1,009 2,363 2,825 1,614 1,631 1,469 1,823 1,599 1,433 1,540 1,203 1,323 1,694 1,264 1,381 1,788 1,826 4,343 3,923 5,358 3,942 4,448 4,651 3,511 4,218 5,017 3,071 3,854 5,318 4,472 8,217 7,018 9,628 7,418 7,735 7,853 6,081 6,996 8,521 5,344 7,598 9,931 7,912 25,595 26,211 26,902 26,773 24,173 32,301 20,061 21,626 26,926 29,129 25,944 23,137 24,386 7,215 7,761 7,805 7,436 7,233 8,233 6,715 9,066 10,092 11,369 10,261 10,629 9,986 32,810 33,972 34,707 34,209 31,406 40,534 26,776 30,692 37,018 40,498 36,205 33,766 34,372 % dual fuel 25% 21% 28% 22% 25% 19% 23% 23% 23% 13% 21% 29% 23% Table 5.3, Dual Fuel Switches 6000 5000 5358 5017 5318 4000 3823 4343 3923 4609 4448 4651 3511 4218 3854 Domestic Electricity 3000 3071 2825 Domestic Gas 2000 1000 1996 1318 2243 1631 1626 1469 2447 1823 1956 1719 1854 1433 1662 1540 1367 1203 1455 1323 1810 1694 1264 1009 2363 1381 1788 Domestic Dual Fuel 0 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Figure 5.3 31
MARKET DEVELOPMENTS 5.2 Renegotiations This section presents new market monitoring data on renegotiations in the electricity and gas retail markets from April 2016 to June 2017. Internal switching or renegotiations refer to situations where a new contract term, tariff or terms & conditions have been negotiated between the supplier and the customer. These can be initiated either by the Supplier or the customer. Data on renegotiations complements that collected on switching and helps to provide a more complete picture of customer engagement and the options open to customers. This analysis looks at the number of successfully completed renegotiated contracts 4 (regardless of whether initiated by the customer or the supplier or of the number of times and individual customer renegotiated) 5. Total Number of Successful Internal electricity switches 30000 28000 26000 24000 22000 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 19392 17728 16011 16741 14239 14982 12733 22830 16821 14217 16950 14156 15213 29434 18810 16505 14393 13738 656 1894 678 814 966 1175 591 526 896 629 829 655 2020 1634 2428 3484 2921 2110 Domestic Electricity Non Domestic Electricity Figure 5.4 The total number of internal switches in electricity in Q2 2017 was 53,151, compared to 69,539 in Q1 2017. 4 New data captured under the market monitoring framework may be subject to change 5 Data which was previously pending from suppliers on renegotiations has been submitted which will impact on figures compared to previous reports. 32
MARKET DEVELOPMENTS Total Number of Successful Internal Gas Switches 6000 4000 4014 4085 3519 3504 4772 4380 4433 5095 3949 4218 4152 2933 4010 5320 5102 3837 4791 4403 2000 0 590 657 208 282 249 167 111 130 203 205 420 304 239 371 318 703 580 746 Domestic Gas Non-Domestic Gas Figure 5.5 The total number of internal switches in gas in Q2 2017 was 15,060, compared to 15,360 in Q1 2017. 5.3 Summary Customer Switching and Renegotiations The total number of customers switching in electricity was 73,467 in Q2 2017. This represented a decrease in switching from Q2 2016 where there were 81,920 switches. The total number of customers switching in gas was 30,876 in Q2 2017. This represented an increase in switching of 34.56% from Q2 2016, during which time there were 22,946 customer switches. Between April and June 2017, dual fuel switches represented 24% of total switches. The total number of internal switches in electricity in Q2 2017 was 53,151, compared to 69,539 in Q1 2017. The total number of internal switches in gas in Q2 2017 was 15,060, compared to 15,360 in Q1 2017. 33
ENERGY CUSTOMER PROTECTION ENERGY CUSTOMER PROTECTION 34
6. Financial Hardship PAYG ENERGY CUSTOMER PROTECTION This section looks at the trend in the installation of PAYG meters. Prepayment meters are split into two types; financial hardship Pay As You Go (PAYG) meters and lifestyle choice PAYG meters. PAYG financial hardship meters are offered in the domestic electricity and gas markets to customers experiencing financial difficulty paying their bills. The cost of the meter and its installation are socialised and the customer does not have to pay anything extra for the meter itself. If a customer is in arrears, they cannot be disconnected for reasons of non-payment of account unless they have first been offered a PAYG meter by their supplier. In instances where it would not be appropriate to offer a PAYG meter, such as the customer not being able to use the meter or where there is no suitable location for the meter in the premises, the supplier must offer an alternative. The Codes of Practice require fair and robust customer processes to be in place for the installation of such meters. Currently Bord Gáis Energy, Electric Ireland, Energia, Flogas and SSE Airtricity provide PAYG meters for financial hardship in the electricity and gas domestic markets. A number of suppliers also offer lifestyle choice prepayment options in the electricity sector (Electric Ireland, Pinergy and PrePayPower). Customers may find such meters useful to manage their consumption and spending on electricity. For gas, GNI provides all the PAYG meters, both for financial hardship and lifestyle choices. If a customer wishes to avail of a lifestyle choice meter in gas they obtain such from GNI through their supplier. CRU will continue to monitor the installation of PAYG financial hardship meters in its quarterly reports. Electricity PAYG financial hardship installs Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Total Cumulative Installs 70,580 73,288 75,177 77,101 78,742 80,072 81,026 81,873 82,927 Total Quarterly Installs 3,287 2,478 1,889 1,921 1,641 1,330 954 847 1,054 Table 5.1 Total and cumulative number of electricity PAYG installs for reasons of financial hardship 35
ENERGY CUSTOMER PROTECTION Gas PAYG Installs Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Total Cumulative Installs (Financial Hardship) 6 Total Quarterly Installs (PAYG Lifestyle choice and financial hardship) % of quarterly installs for financial hardship 96,676 98,124 98,835 99,538 100,525 101,288 101,729 102,271 102,810 2,022 1,682 975 1,003 1,276 1,075 1,069 1,644 2,980 86.5% 86.09% 72.92% 70.09% 77.35% 70.98% 41.25% 32.97% 22.08% Table 5.2 Total and cumulative number of gas PAYG installs The total number of PAYG installs by ESBN declined between the beginning of 2016 and the beginning of 2017 but has seen an increase in Q2 2017. The number of PAYG installs for GNI increased. This was particularly prevalent in Q2 2017 which saw an 81.27% increase in the number of PAYG installs by GNI from Q1 2017. However, only 22.08% of these were for financial hardship reasons in Q2 2017. 6 This table has been revised to include cumulative figures for financial hardship only. Quarterly figures reflect both lifestyle choice installs and financial hardship installs, while the % of installs for financial hardship reasons per quarter is also presented. 36
ENERGY CUSTOMER PROTECTION 7,000 Total Number of PAYG Installs 2014-2017 6,000 5,000 5,075 5,975 6,120 Electricity PAYG Installs 4,000 3,000 2,000 1,000 0 Q1 2014 2,096 Q2 2014 2,920 Q3 2014 2,341 Q4 2014 4,064 4,152 3,287 2,478 1,889 1921 1641 1,446 1666 1749 1448 1330 954 1054 711 703 987 763 847 441 542 658 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Gas PAYG Installs Figure 5.1, Total number of PAYG installs between 2014 and 2017 Table 5.3 details the electricity PAYG meter installation rate per supplier. This was calculated by dividing the number of meter installs per quarter by the number of customers of each supplier per quarter. Electricity PAYG financial hardship Install Rate Electric Ireland SSE Airtricity Bord Gáis Energy Energia Q3 2014 0.33% 0.32% 0.31% - Q4 2014 0.24% 0.18% 0.18% 0.01% Q1 2015 0.24% 0.20% 0.16% 0.02% Q2 2015 0.18% 0.19% 0.24% 0.03% Q3 2015 0.13% 0.13% 0.17% 0.02% Q4 2015 0.10% 0.11% 0.12% 0.01% Q1 2016 0.11% 0.09% 0.10% 0.03% Q2 2016 0.10% 0.10% 0.09% 0.03% Q3 2016 0.09% 0.11% 0.09% 0.02% Q4 2016 0.05% 0.07% 0.05% 0.02% Q1 2017 0.05% 0.06% 0.03% 0.02% Q2 2017 0.06% 0.06% 0.08% 0.02% Table 5.3 Electricity PAYG installation rate Table 5.4 details the Gas PAYG financial hardship meter installation rate per supplier. 37
ENERGY CUSTOMER PROTECTION Gas PAYG (financial hardship) Install Rate Electric Ireland SSE Airtricity Bord Gáis Energy Flogas Q1 2014 0.12% 0.56% 0.32% 0.58% Q2 2014 0.24% 0.66% 0.50% 0.41% Q3 2014 0.22% 0.45% 0.42% 0.39% Q4 2014 0.15% 0.26% 0.26% 0.23% Q1 2015 0.05% 0.16% 0.12% 0.05% Q2 2015 0.21% 0.29% 0.32% 0.17% Q3 2015 0.25% 0.24% 0.21% 0.15% Q4 2015 0.13% 0.13% 0.10% 0.09% Q1 2016 0.14% 0.16% 0.09% 0.04% Q2 2016 0.22% 0.27% 0.12% 0.03% Q3 2016 0.09% 0.11% 0.09% 0.02% Q4 2016 0.09% 0.07% 0.06% 0.07% Q1 2017 0.12% 0.08% 0.08% 0.01% Q2 2017 0.13% 0.06% 0.10% 0.03% Table 5.4 Gas PAYG installation rate 6.1 Summary Financial Hardship PAYG The total number of electricity PAYG financial hardship installs in Q2 2017 was 1,054, compared to 1,641 in Q2 2016. The total number of gas PAYG installs in Q2 2017 was 2,980. 22.08% of these were for financial hardship reasons. In the same period in 2016, 1,276 were installed, with 77.35% for financial hardship reasons. This indicates that the installs were being driven by lifestyle choice customers. 38
ENERGY CUSTOMER PROTECTION 7. Debt Flagging Where a customer requests to change to a new supplier, the customer s existing supplier has the facility to inform the new supplier if the customer has an outstanding debt, above the industry thresholds approved by CRU 7. The new supplier can then choose whether to proceed with or cancel the change of supplier (CoS) request where this flag has been raised. The debt flagging process has been in place since October 2011 and CRU monitors the use of the debt flagging facility by both losing and gaining suppliers on an on-going basis. In Q2 2017 there were 664 debt flags in electricity and 440 debt flags in gas. Debt Flags Q2 2015 Q3 2015 Q4 2015 Q1 2016 Electricity Q2 2016 Q3 2016 Q4 2016 Q1 2017 Total Debt Flags 972 858 922 560 572 637 648 578 664 Total debt Flags as % of overall Switches % of debt Flagged CoS requests Cancelled Debt Flagged CoS not cancelled Q2 2017 1.29% 1.11% 1.27% 0.71% 0.70% 0.80% 0.85% 0.74% 0.90% 36.30% 33.10% 21.80% 28.57% 27.97% 33.12% 36% 41% 36% 619 574 721 400 412 426 416 343 424 Table 7.1, Debt Flagging in Electricity Q2 2015 Q2 2017 7 Domestic threshold: 225 for > 60 days from due. Small business & unmetered supply: 600 for > 30 days from due. Medium sized business: 1,200 for > 30 days from due. 39
ENERGY CUSTOMER PROTECTION Gas Debt Flags Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Total Debt Flags 258 352 237 180 319 384 241 317 440 Total debt Flags as % of overall Switches % of debt Flagged CoS requests Cancelled Debt Flagged CoS not cancelled 0.98% 1.25% 0.93% 0.71% 1% 1.67% 1% 1% 1% 52.33% 44.03% 37.13% 47% 55% 50.52% 41% 40% 45% 123 197 149 96 143 190 142 191 243 Table 7.2, Debt Flagging in Gas Q2 2015 Q2 2017 8. Disconnections The disconnection/ de-energisation of a customer s energy supply should always be the last resort and all suppliers are required to offer a payment plan and prepayment solution to customers in advance of proceeding to disconnect. This section analyses trends in disconnections in both electricity and gas for Q2 2017. In early 2014 CRU, in conjunction with industry and the Department of Communications, Energy and Natural Resources8, reviewed the market processes to ascertain if more could be done in further reducing disconnections (e.g. by increasing uptake of PAYG). While this work was ongoing CRU imposed a moratorium on the disconnections, which was lifted on 20th February 2014. In May 2014, a voluntary agreement was introduced by most energy suppliers which saw them committing to never disconnect an engaging customer. 8 Since renamed to the Department of Communications, Climate Action and Environment 40
Number of disconnections ENERGY CUSTOMER PROTECTION 8.1 Disconnections Total The total number of disconnections in Q1 2017 was 1,306 for electricity and 707 for gas. Table 8.1 shows the total number of disconnections between 2011 and Q1 2017 Total NPA Disconnections 2011 2012 2013 2014 2015 2016 Q1 2017 Q2 2017 Electricity 17,794 17,441 12,391 8,731 7,783 6,789 1,145 1,306 Gas 4,560 7,558 6,279 3,998 3,542 2,787 553 707 Table 8.1, total (domestic and business) disconnections in Electricity and Gas 2011-Q2 2017 20,000 Total (Domestic and Business) NPA disconnections 18,000 16,000 17,794 17,441 14,000 12,000 12,391 10,000 8,000 6,000 7,558 6,279 8,731 7,783 6,789 4,000 2,000 4,560 3,998 3,542 2,787 0 2011 2012 2013 2014 2015 2016 Figure 8.1, trend in NPA disconnections from 2011-2016 41
ENERGY CUSTOMER PROTECTION 8.2 Disconnections-Electricity Market CRU receives data on electricity disconnections 9 that were completed for nonpayment of account reasons on a monthly basis from ESBN 10. This section analyses the data on validated electricity non-payment of account (NPA) disconnections 11. Electric Ireland Total Domestic disconnections per supplier SSE Airtricity Bord Gais Energy Pre Pay Power Energia Pinergy Panda Total Jan-16 699 71 56 20 19 15-880 Feb-16 596 84 94 30 18 23-845 Mar-16 580 56 83 22 11 22-774 Apr-16 250 81 107 15 21 28-502 May-16 92 97 40 22 27 14-292 Jun-16 73 109 58 13 22 13-288 Jul-16 70 77 61 28 16 20-272 Aug-16 79 70 69 31 95 22-366 Sep-16 82 97 50 12 26 26-293 Oct-16 58 51 55 8 29 27 4 232 Nov-16 98 60 70 17 32 10 3 290 Dec-16 40 7 13 8 11 1 2 82 Jan-17 46 29 85 29 39 10 9 247 Feb-17 72 49 35 18 13 9 10 206 Mar-17 199 49 46 27 16 18 11 366 Apr-17 157 43 30 33 18 9 4 294 May-17 209 100 46 28 22 16 14 435 Jun-17 125 53 34 40 23 7 15 297 Table 8.2, Total domestic disconnections by supplier, January 2016 June 2017 The majority of disconnections due to NPA in Q1 2017 were for domestic customers. The market share of suppliers and rate of disconnections will be considered in the 2017 annual report, which will look at the disconnection rate per 10,000 customers. 9 This data has been validated by suppliers in advance of publication. 10 NPA can cover customers in arrears that have been disconnected because they cannot pay due to financial hardship or disconnected customers who choose not to pay debt. Currently such customers cannot be distinguished in the data. This NPA data does not include data on self-disconnections. This data includes disconnections of PAYG customers due to fraud/theft. 11 PrePayPower states that, as a prepay supplier, it only disconnects in situations where they suspect a site of being vacant or in instances of fraud based on an analysis of vend and consumption data. 42
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 ENERGY CUSTOMER PROTECTION Figure 8.2 shows the trend in disconnections for 2015, 2016 and 2017 compared to the trend in installation of PAYG financial hardship meters. Without a PAYG system in place which provides an option for customers facing difficulty in paying their electricity bills, disconnections would be significantly higher. 1,800 1,600 1,400 1,200 1,000 800 600 400 200 - Total domestic electricity disconnections compared to PAYG installs PAYG financial hardship installs Domestic Disconnections Figure 8.2, Total Domestic Electricity Disconnections compared to PAYG financial hardship installs for January 2015 to June 2017 Percentage change in electricity disconnections between 2014 and 2017 Total Domestic Non-Domestic % change between 2015 and 2016-12% -19% 22% % change between Q2 2016 and Q2 2017-20% -5% -49% Table 8.3 43
ENERGY CUSTOMER PROTECTION 8.3 Disconnections- Gas Market There are three types of disconnections 12 in gas: credit locks, disconnect meters (DMs) and street isolations (CTSRs). This section only focuses on the disconnections that were undertaken for non-payment of account (NPA) reasons 13. Bord Gáis Energy Total domestic gas disconnections per supplier SSE Airtricity Flogas Electric Ireland Energia Total Jan-16 143 9 13 21 12 198 Feb-16 172 30 37 42 9 290 Mar-16 142 13 25 43 15 238 Apr-16 76 23 15 21 24 159 May-16 143 30 47 33 23 276 Jun-16 89 24 29 48 21 211 Jul-16 140 26 64 60 36 326 Aug-16 123 7 57 48 49 284 Sep-16 80 19 16 25 22 162 Oct-16 101 14 0 7 12 134 Nov-16 78 19 8 7 14 126 Dec-16 47 4 3 3 6 63 Jan-17 45 10 13 36 11 116 Feb-17 52 13 12 128 7 212 Mar-17 41 15 16 82 12 167 Apr-17 40 18 13 108 18 197 May-17 74 17 16 64 22 193 Jun-17 75 14 19 121 29 261 Table 8.4, Total domestic disconnections by supplier, January 2015 June 2017 The market share of suppliers and rate of disconnections will be considered in the annual report, which will look at the disconnection rate per 10,000 customers. Figure 8.3 shows the trend in gas disconnections compared to the trend in installation of PAYG financial hardship meters. The chart indicates that without a PAYG system, disconnections would be higher. 12 CRU receives separate data reports on all three from GNI. To determine the disconnections that were completed for non-payment of account reasons (NPA), CRU assumes all credit locks were completed for NPA reasons and sends each supplier the GPRNs that relate to their DMs and CTSRs so that the supplier can identify the remaining NPA disconnections. CRU then add together all the CLs and the NPA identified DMs and CTSRs to derive an estimate for total gas NPA disconnections. 13 This data has been validated by suppliers in advance of publication. 44
ENERGY CUSTOMER PROTECTION Total gas disconnections compared to PAYG installs 700 600 500 400 300 200 100 - Gas PAYG (financial hardship) installs Domestic Gas Disconnections Figure 8.3, Total Domestic Gas Disconnections compared to PAYG financial hardship installs for January 2015 to June 2017 Percentage change in gas disconnections between 2014 and 2017 Total Domestic Non-Domestic % change between 2015 and 2016-21% -26% 88% % change between Q2 2016 and Q2 2017-1% 1% -20% Table 8.5 8.4 Summary Disconnections The total number of disconnections in Q2 2017 was 1,306 for electricity and 707 for gas. Between Q2 2016 and Q2 2017, the total number of electricity disconnections have declined by 20% and the total number of gas disconnections have declined by 1%. 45
9. Arrears and Payment Plans ENERGY CUSTOMER PROTECTION CRU has begun to collect data on the number of customers in arrears and on payment plans per quarter, including their value and length. Figures detailing the number of customers in arrears and on payment plans per market segment will be published on a quarterly basis. Arrears refers to the number of customers by market segment that were in arrears at the end of the reporting period regardless of the value of the arrears. As shown in table 6.3, between 11% and 18% of customers across all segments were in arrears in Q2 2017. However, it is important to note that this includes all customers that were in arrears for one billing period or more in the reporting period. Total number of customers in arrears and on payment plans in Q2 2017 Domestic Electricity Non-Domestic Electricity Domestic Gas Non-Domestic Gas Total Arrears 261,035 23,993 93,870 4,755 383,653 Payment Plans 13,075 0 3,203 0 16,278 Table 9.1 Of those customers in arrears, CRU has conducted analysis on the number of domestic electricity customers in arrears for 0-30 days, 31-60 days, 61-90 days and greater than 90 days for Q2 2017. As shown in figure 9.1 the majority of customers (37% for electricity, 26% for gas) are in arrears for less than 30 days. These customers are generally not considered to be in financial difficulty. They can be assumed to be treated as part of a normal cycle of billing and payment. Of concern are those customers in arrears for over 30 days as it can be assumed they have trouble in paying their energy bills. In Q2 2017 of those domestic customers in arrears 63% (electricity) and 74% (gas) were for greater than 30 days. In electricity of this 63%; 48% were in arrears in excess of 90 days this represented 63,026 electricity customers. In gas of the 74%; 41% were in arrears in excess of 90 days, this represented 28,480 gas customers. Overall in Q2 2017 6% of all domestic electricity customers were in arrears for over 30 days (a total of 125,809 customers). 11% of all gas customers were in arrears for over 30 days (a total of 69,464 customers). 46
ENERGY CUSTOMER PROTECTION Total number of days domestic electricity customers are in arrears 6% 27% 12% 37% 0-30 days 31-60 days 61-90 days of domestic electricity customers in arrears for over 30 days 24% >90 days Figure 9.1 Total number of days domestic gas customers are in arrears 11% 30% 15% 26% 29% 0-30 days 31-60 days 61-90 days >90 days of domestic gas customers in arrears for over 30 days Figure 9.12 47
ENERGY CUSTOMER PROTECTION The number of customers who have entered payment plans with their supplier provides an additional measure of customers who are continuously having difficulty paying their bills. A payment plan arrangement is a specific payment arrangement with a supplier to cover outstanding arrears on a customer s bills. A payment plan can include those arranged to recoup a debt, regardless of the debt source (i.e. financial hardship, fraud, credit, estimated reads, etc.). As a percentage of total customers the number of customers per market segment on payment plans is much lower than for customers in arrears (figure 9.2) Figure 9.2 Of the total customer numbers in electricity 0.64% (13,075) are on payment plans. In gas 0.49% (3,203) are on payment plans. This is a relatively low percentage considering 6% (125,809) of total electricity and 11% (69,464) of total gas customers are in arrears for over 30 days (3% exceeding 90 days). Of those in arrears exceeding 30 days only 10% are on payment plans. There is scope for more customers that are in arrears for over 30 days to be on a payment plan. The CRU will keep this under review. CRU has compiled information on the percentage of completed and broken payment plans for Q1 and Q2 of 2017, taken at an aggregate level across suppliers. The successfully completed payment plan percentage rate ranges from 62% in April 2017 to 49% in March 2017. As such, up to half of payment plans are being broken. 48
ENERGY CUSTOMER PROTECTION Percentage of completed and broken payment plans in Q2 2017 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 % Broken Payment Plans % Completed Payment Plans 46% 45% 51% 38% 40% 40% 54% 55% 49% 62% 60% 60% Table 9.2 9.1 Summary Arrears and Payment Plans Between 11% and 18% of customers across all segments were in arrears in Q2 2017. However, it is important to note that this includes all customers that were in arrears for one billing period or more in the reporting period. 6% of total domestic electricity customers are in arrears for longer than 30 days. 11% of total domestic gas customers are in arrears for longer than 30 days. Of those customer in arrears for longer than 30 days, 48% (electricity) and 41% (gas) are in arrears for excess of 90 days. The percentage of total customers per market segment on payment plans is 0.64% for electricity and 0.49% gas indicating that 13,901 electricity customers and 4,523 gas customers are on payment plans A significant number of payment plans, between 38%-51%, are broken each month. 49
BUSINESS MARKET DEVELOPMENTS BUSINESS MARKET DEVELOPMENTS 50
BUSINESS MARKET DEVELOPMENTS 10. Non-Domestic Electricity Market Share 10.1 Small and Medium Business Electricity Market Share by Customer Numbers and MWhs SME Market Share 6.82% 7.47% Electric Ireland 20.11% 41.71% 26.78% 35.7% Airtricity 13.32% 18.04% 12.86% 17.19% Bord Gáis Energy Energia Others (a) Customer Nos (b) MWhs Q2 2017 Small Business Market Share Sites MWhs Electric Ireland 77,070 299,773 SSE Airtricity 33,336 144,371 Bord Gáis Energy 24,605 108,020 Energia 37,164 224,860 Others 12,592 62,763 Total 184,767 839,787 Table 9.1, Number of sites and MWhs per supplier 51
BUSINESS MARKET DEVELOPMENTS Small Business - change in Q1 2017 Q2 2017 Q2 2016 Q2 2017 market share Sites MWhs Sites MWhs Electric Ireland -1.47% -0.73% -3.98% -1.44% SSE Airtricity 0.02% -0.44% -2.36% -3.36% Bord Gáis Energy 0.17% 0.05% 1.61% 0.77% Energia 0.49% 0.16% -0.78% -1.31% Others 0.80% 0.97% 4.91% 5.34% Table 9.2, % change in market share for Q2 2016 to Q2 2017 In Q2 2017, Electric Ireland had 35.7% of the small and medium business electricity market in terms of consumption, followed by Energia with 26.78%, SSE Airtricity with 17.19% and Bord Gáis Energy with 12.86%. SSE Airtricity lost 3.36% of its market share in terms of consumption between Q2 2016 and Q2 2017, while Bord Gáis Energy increased its market share by 0.77%. 10.2 Medium Business Electricity Market Share by Customer Numbers and MWhs The medium business electricity segment is comprised of DG3 and DG4 (public lighting and unmetered connections), DG4 and DG6 (Low voltage maximum demand. Prior to the beginning of 2017, customer numbers for this segment for DG3 and DG4 were based on the number of grouped MPRNs and single point unmetered connections. Grouped MPRNS can include any number of physical connections or technical MPRNs. From 2017 the reports for DG3 and DG4 will include the number of physical connections to the distribution system rather than at a grouped level, so the total number of customer numbers will appear larger and reported market share of customer numbers in this segment has changed. However, reporting of market share on a consumption basis has not changed. 52
BUSINESS MARKET DEVELOPMENTS Medium Business Market Share 0.27% 1.72% 19.29% 2.06% 1.17% 2.68% 28.52% 7.84% 42.62% Electric Ireland Airtricity Bord Gáis Energy Energia 75.49% 8.02% 10.33% Vayu Others (a) Customer Nos (b) MWhs Figure 9.2, Q2 2017 Medium Business Electricity market Share Q2 2017 Medium Business 14 Market Share Sites MWhs Electric Ireland 17,435 412,840 SSE Airtricity 1,863 100,037 Bord Gáis Energy 1,057 77,697 Energia 68,228 276,261 Vayu 241 25,912 Others 1,551 75,901 Total 90,375 968,648 Table 9.3, Number of sites and MWhs per supplier 14 Medium-sized business includes low voltage maximum demand (DG6) and public lighting (DG 3&DG4). 53
BUSINESS MARKET DEVELOPMENTS Medium Business - change in market share Electric Ireland SSE Airtricity Bord Gáis Energy Energia Vayu Others Q1 2017 Q2 2017 MWhs Q2 2016-Q2 2017 MWhs 1.54% 3.48% -0.13% -6.17% -0.04% -0.14% -1.54% -2.14% 0.07% 0.02% 0.10% 4.95% Table 9.4, % change in market share for Q2 2016 to Q2 2017 In Q2 2017, Electric Ireland held 42.62% of the medium business market in terms of consumption, followed by Energia with 28.52%, SSE Airtricity with 10.33%, Bord Gáis Energy with 8.02% and Vayu with 2.68%. Between Q2 2016 and Q2 2017 Electric Ireland increased its market share by 3.48%, while SSE Airtricity s market share decreased by 6.17%. 10.3 Large Energy Users Electricity Market Share by Customer Numbers and MWhs LEU Market Share 4.53% 0.14% Electric Ireland 7.92% Airtricity 20.13% 7.59% 37.84% 15.87% 8.87% 36.6% Bord Gáis Energy Energia 9.13% 17.38% 24.81% Vayu Others (a) Customer Nos (b) MWhs Figure 9.3, Q2 2017 LEU Electricity market Share 54
BUSINESS MARKET DEVELOPMENTS Q2 2017 Sites LEU Market Share MWhs Electric Ireland 688 670,426 SSE Airtricity 316 454,434 Bord Gáis Energy 166 162,418 Energia 366 290,602 Vayu 138 82,981 Others 144 170,655 Total 1,818 1,831,516 Table 9.5, Number of sites and Mwhs per supplier LEUs - Change change in market share Q1 2017 Q2 2017 Q2 2016 Q2 2017 Sites MWhs Sites MWhs Electric Ireland -3.07% -4.13% -7.25% -8.53% SSE Airtricity 1.42% 0.27% 0.31% 3.11% Bord Gáis Energy 0.21% 1.10% -0.80% -0.06% Energia 0.95% 2.43% 1.87% 2.66% Vayu 0.00% 1.11% 1.69% 1.43% Others 0.49% -9.95% 4.18% -7.78% Table 9.6, % change in market share for Q2 2016 to Q2 2017 In Q2 2017, Electric Ireland held 36.6% of the market in terms of consumption, followed by SSE Airtricity with 24.81%, Energia with 15.87%, Bord Gáis Energy with 8.87% and Vayu with 4.53%. Between Q2 2016 and Q2 2017, Electric Ireland s market share decreased by 8.53% in terms of consumption, while SSE Airtricity s market share increased by 3.11% 55
BUSINESS MARKET DEVELOPMENTS 11. Non-Domestic Gas Market Share From the Q1 2017 report, the non-domestic gas market share segments will change based on discussions with GNI to better align the names and classifications of the gas market segments with the GNI Code of Operations. The only market segment that will change will be the current RTF market segment, which will be split into the Daily Metered (DM) and Large Daily Metered (LDM) market segments. FVT-eligible gas will be renamed medium-sized non-domestic gas for the purpose of reporting. These changes are set out below: Current Name of Market Segment Total Non-domestic gas Industrial/Commercial gas (NDM IC customers with a SPC below 3,750kWh) Revised Names and definitions Total non-domestic gas Industrial/Commercial gas (NDM IC customers with a SPC below 3,750kWh) Fuel-Variation Tariff eligible gas (NDM FVT customers with a SPC above 3,750 kwh) Regulated Tariff Formula eligible gas (Annual consumption of between 5.5GWhs and 264GWhs) Medium-sized non-domestic gas (NDM FVT customers with a SPC above 3,750 kwh) Daily Metered (DM) Customers Large Daily Metered (LDM) Customers excluding power generators. 56
BUSINESS MARKET DEVELOPMENTS 11.1 Industrial and Commercial Gas Market Share by Customer Numbers and GWhs NDM IC Market Share 1.88% 4.83% 3.76% Airtricity 16.03% 4% Bord Gáis Energy 22.09% 47.86% 20.65% 39.15% Electric Ireland Flogas 7.32% 26% Energia 6.43% Vayu (a) Customer Nos (b) GWhs Figure 10.1, Q2 2017 IC gas market share NDM IC 15 Market Share Q2 2017 Sites GWhs (cumulative) GWhs (Q2 2017) Bord Gáis Energy 11,603 426 145 SSE Airtricity 1,170 42 14 Electric Ireland 1,774 64 24 Flogas 5,356 264 96 Energia 3,885 252 76 Vayu 455 46 15 Total 24,243 1094 370 Table 10.1, Number of sites and GWhs per supplier 15 Non-daily metered industrial and commercial. 57
BUSINESS MARKET DEVELOPMENTS NDM IC- change in market share Q1 2017 Q2 2017 Q2 2016 Q2 2017 Sites GWhs Sites GWhs Bord Gáis Energy -0.06% -0.10% -0.09% -0.12% SSE Airtricity Electric Ireland Flogas Energia Vayu 2.69% 0.34% 4.14% 2.37% 0.59% 0.91% 0.60% 0.99% -0.55% 2.79% -0.19% 0.35% -2.66% -3.66% -4.49% -3.96% -0.02% -0.28% 0.03% 0.37% Table 10.1, % change in market share for Q2 2016 to Q2 2017 In Q2 2017, Bord Gáis Energy had the largest market share in the IC gas market, with 47.86% in terms of customer numbers. This was followed by Flogas with 22.09%, Energia with 16.03%, Electric Ireland with 7.32%, SSE Airtricity with 4.83% and Vayu with 1.88%. Between Q2 2016 and Q2 2017, SSE Airtricity increased its market share by 4.14%, while Energia s market share decreased by 4.49% 11.2 Medium Sized Non-Domestic Market Share by Customer Numbers and GWhs Medium Sized Non-Domestic Market Share 2.81% 2.95% Airtricity 14.34% 14.03% Bord Gáis Energy 17.21% 43.25% 18.57% 36.64% Electric Ireland Flogas 20.13% 25.25% Energia 2.25% 2.56% Vayu (a) Customer Nos (b) GWhs Figure 10.2 Q2 2017 Medium Sized Non-Domestic Market Share 58
BUSINESS MARKET DEVELOPMENTS Medium Sized Non-Domestic Market Share Q2 2017 Sites GWhs (Cumulative) GWhs (Q2 2017) Bord Gáis Energy 769 476 173 SSE Airtricity 50 42 14 Flogas 358 301 119 Energia 306 264 88 Vayu 255 187 66 Electric Ireland 40 28 12 Total 1,778 1,298 472 Table 10.3, Number of sites and GWhs per supplier Medium Sized Non-Domestic Market Share - change in market share Q1 2017 Q2 2017 Q2 2016 Q2 2017 Sites GWhs Sites GWhs Bord Gáis Energy 6.44% -0.04% 4.58% 1.05% SSE Airtricity -0.13% -0.44% -0.03% -0.03% Flogas -0.19 3.22% 0.49% 1% Energia -6.29% -2.74% -5.61% -2.7% Vayu -0.21% -0.62% -0.28% -0.68% Electric Ireland 0.38% 0.62% 0.85% 1.36% Table 10.4, % change in market share for Q2 2016 Q2 2017 In Q2 2017, Bord Gáis Energy had the largest market share in the medium sized nondomestic market, with 43.25% in terms of customer numbers. This was followed by Flogas with 20.13%, Energia with 17.21%, Vayu with 14.34%, SSE Airtricity with 2.81% and Electric Ireland with 2.25%. Between Q2 2016 and Q2 2017, Energia lost 5.61% of its market share in terms of customer numbers, while Bord Gáis Energy increased its market share by 4.58% 59
BUSINESS MARKET DEVELOPMENTS 11.3 DM and LDM Market Share by Customer Numbers and GWhs 1.32 DM Market Share 0.44 Airtricity 0.88 19.82 18.94 8.81 38.77 0.44 19.68 24.78 11.37 30.76 BG Energy Electric Ireland Energia Gazprom 11.45 12.54 Vayu Flogas (a) Customer Nos (b) GWhs Figure 10.3, Q2 2017 DM gas market share Q2 2017 Sites DM Market Share GWhs (cumulative) GWhs (Q2 2017) Bord Gáis Energy 88 468 211 SSE Airtricity 20 176 78 Electric Ireland 26 179 86 Gazprom 2 12 3 Energia 45 378 170 Vayu 43 295 135 Flogas 3 8 3 Total 227 1,516 686 Table 10.4, Number of sites and GWhs per supplier 60
BUSINESS MARKET DEVELOPMENTS LDM Market Share 2.98% 10.53% 10.53 8.94% 7.97% 7.89% 17.23% 23.68% 47.37% 62.89% Airtricity BG Energy Electric Ireland Energia Gazprom Vayu (a) Customer Nos (b) GWhs Figure 10.4, Q2 2017 LDM gas market share Q2 2017 Sites LDM eligible Market Share GWhs (cumulative) GWhs (Q2 2017) Bord Gáis Energy 18 1,854 971 SSE Airtricity 4 247 123 Electric Ireland 9 492 266 Gazprom 0 0 0 Energia 3 81 46 Vayu 4 256 138 Flogas 0 0 0 Total 38 2,930 1,544 Table 10.5, Number of sites and GWhs per supplier In Q2 2017, Bord Gáis Energy held 38.77% of DM market share in terms of customer numbers, followed by Energia with 19.82%, Vayu with 18.94% and Electric Ireland with 11.45%. In Q2 2017 Bord Gáis Energy held 47.37% of LDM market share in terms of customer numbers, followed by Electric Ireland with 23.68%, SSE Airtricity with 10.53%, Vayu with 10.53% and Energia with 7.89%. 61