# Bord Gais v ESB - Madness!



## twenty8 (18 Feb 2009)

Is it just me - or is anyone else even slightly annoyed by today's announcement from Bord Gais.

Does everyone not realise that all that is happening is that we (the taxpayer) is paying for this.

Here we have 2 state agencies battling to get a share of the electricity market and spending taxpayers money to market which of our agencies should get it!!! This is bloody ridicilious. In addition, we are also paying for the discount that people get from Bord Gais. The money that we have saved by going with Bord Gais would traditionally have gone to ESB - the taxpayer!

This is madness.

Anyone else agree??


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## diarmuidc (18 Feb 2009)

*Re: Bord Gais v ESB - Maddness!*

No.  We need competition in the energy market. They are separate companies with a common shareholder. If they compete for the market it's a good thing.
You are currently paying for it in inefficiencies and lack of competition (70k average salary anyone?).


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## Purple (18 Feb 2009)

*Re: Bord Gais v ESB - Maddness!*



diarmuidc said:


> No.  We need competition in the energy market. They are separate companies with a common shareholder. If they compete for the market it's a good thing.
> You are currently paying for it in inefficiencies and lack of competition (70k average salary anyone?).



I'm with you diarmuid.


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## Smashbox (18 Feb 2009)

*Re: Bord Gais v ESB - Maddness!*

Me too. Its about time a bit of competition came in.


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## Purple (18 Feb 2009)

*Re: Bord Gais v ESB - Maddness!*

Yep, the extra we pay to the ESB goes to massive wages and the government. If they want to increase taxes then they should but not like this.


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## DublinTexas (18 Feb 2009)

*Re: Bord Gais v ESB - Maddness!*

 when plans came out, everybody told me the same, competition is good and who cares that it's to 2 state owned company that compete with each other.

But people are forgetting that there is already competition that offers up to 10% discount on what ESB is "forced" to charge, airtricity. But still people did not swap over en mass to them (maybe because they did not do too much advertising).

Now Board Gas is coming into the market offering up to 14% discount on the ESB price which after all is not set by ESB but the CER and not on what the actual cost should be but rather what ESB needs to pay their staff and infrastructure and back to the owner (goverment).

If you want competition in the market than don't just have another state body undercut ESB, get ride of the CER mandated prices for the ESB. Sure that will result in the ESB doing cost cutting and firing staff, but it's better.

So what happens next is the ESB is offering Gas with a discount on the CER mandated Board Gais prices and we call that also open competition pushing the new smaller Flogas out of the market.

This is not bringing in competition to the market, this is an attempt to continue to have state controll over the energy supply by forcing out the only 2 viable competitors (Airtricity and Flogas) out of the market by using the wealth of the ESB/Bord Gais. 

On Paper this all looks nice.. See we have competition.. But in reality most people won't switch and even if they do in the end it's all paid by the tax payer anyhow because both companies will cross use profit/losses out of the 2 operations against each other.

Competition in Ireland is very funny with most people not switching even if they can save large amounts of money. Look at healthcare. I can't understand why people are not running away en masse from VHI to the cheaper (and better) Hibernian Health. And because people don't switch the goverment regulates and punishes the private companies by forcing them to pay money to the largest player, despite that it's actualy the people who are not swapping. So why do competitors have to pay for the lazy behaviour of the public?

This whole Bord Gais is nothing else than an attempt to conceal the diry situation on the irish energy market which is a large part why the cost base for companies in Ireland is so much higher.

I call it market manipulation and nothing else. Get ride of the CER mandated prices of ESB and see how it develops, I think it could go down by 20-23 % actualy if they would be forced to compete on a like by like basis.


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## diarmuidc (19 Feb 2009)

*Re: Bord Gais v ESB - Maddness!*



DublinTexas said:


> But people are forgetting that there is already competition that offers up to 10% discount on what ESB is "forced" to charge, airtricity. But still people did not swap over en mass to them (maybe because they did not do too much advertising).


I think a switch like this takes years to get going, and I think Bord Gais are pushing it more than Airtricity. I have heard ads on the radio this morning already from them after launching yesterday! (didn't notice any from Airtricity)


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## Sunny (19 Feb 2009)

I wasn't even aware as a domestic user you could switch to Airtricity. I thought it was just business customers.  They won't win any marketing campaigns!

I agree with the argument that ESB should be allowed to reduce their price to compete. As long as they don't sell below cost to destroy the competition, I don't see a problem with it setting its own price instead of having the regulator do it.


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## Sunny (19 Feb 2009)

*Re: Bord Gais v ESB - Maddness!*



DublinTexas said:


> On Paper this all looks nice.. See we have competition.. But in reality most people won't switch and even if they do in the end it's all paid by the tax payer anyhow because both companies will cross use profit/losses out of the 2 operations against each other.
> 
> Competition in Ireland is very funny with most people not switching even if they can save large amounts of money. Look at healthcare. I can't understand why people are not running away en masse from VHI to the cheaper (and better) Hibernian Health. And because people don't switch the goverment regulates and punishes the private companies by forcing them to pay money to the largest player, despite that it's actualy the people who are not swapping. So why do competitors have to pay for the lazy behaviour of the public?


 
Health care is different. As an older customer, you don't have the option to switch without paying massive premiums or facing exemption periods for treatment. Also alot of health insurance policies are held through group schemes so individuals don't have the opttion to switch.

As for energy, it doesn't matter if the competition is from two semi-state companies. The savings I make from Bord Gais is better off in my pocket where I can spend it on something else in the real economy than going to the government through higher prices I pay with the ESB. I do take your point though that it is not pure competition.


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## DublinTexas (19 Feb 2009)

*Re: Bord Gais v ESB - Maddness!*



Sunny said:


> Health care is different. As an older customer, you don't have the option to switch without paying massive premiums or facing exemption periods for treatment. Also alot of health insurance policies are held through group schemes so individuals don't have the opttion to switch. ..


 
I'm sorry but since when is a customer switching from VHI to Quinn or Hibernian facing exemption periods for treatments? There is no break in coverage it is clearley said that on both providers web pages:



> Switch without penalty - No break in cover
> You can switch between insurers without penalty or reserving of waiting periods if your gap in cover is less than 13 weeks, there is no upgrade of cover, and you have served all your waiting periods with your old insurer


 
In addition since when is there a massive premiums to pay when switchting? There is not a single question on the quote asking you for your age, in fact all prices are the same independend on your age.

Now I'm not saying everyone should swap but clearly this kind of misconcepts (I loose Cover and have to pay more) is why people are not swapping.

I'm middle aged, have pre-existing health problems and when I switched from VHI to than Vivas I told them about it and I did not pay a single € more. I than had to leave Vivas because my employer only deals with Quinn but same story there, no problem at all.

So sorry I don't get your statement about health care providers excluding groups in our country, maybe you can share your exampels.


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## Sunny (19 Feb 2009)

*Re: Bord Gais v ESB - Maddness!*

I shouldn't have said older people pay higher premiums. Forgot about community rating scheme! Early morning and all that!

I wasn't saying that health care providers exclude schemes. The majority of private health insurance schemes are provided through group schemes e.g. credit unions or places of work which provide cheaper premiums. The option to switch isn't there unless you leave the group scheme and thats not an option for alot of employees as their employer pays part or even all of the premium. I know of very few employers who offer a choice of insurers.


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## TarfHead (19 Feb 2009)

*Re: Bord Gais v ESB - Maddness!*



diarmuidc said:


> .. 70k average salary anyone? ..


 
I assume you're referring to the quoted figure for average ESB salary ? I thought it was 80K and mentioned this to someone who works there.

He laughed - he thought the figure was higher !

It does seem ridiculous that the Commission for Energy Regulation has [broken link removed] and, with the exception of Airtricity's "_I stepped out and I stepped in again_" efforts, it has taken 10 years to get meaningful competition into the market.

Example of an oxymoron: Public sector efficiencies  ?


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## Howitzer (19 Feb 2009)

*Re: Bord Gais v ESB - Maddness!*



DublinTexas said:


> This is not bringing in competition to the market, this is an attempt to continue to have state controll over the energy supply by forcing out the only 2 viable competitors (Airtricity and Flogas) out of the market by using the wealth of the ESB/Bord Gais.
> 
> ....
> 
> I call it market manipulation and nothing else. Get ride of the CER mandated prices of ESB and see how it develops, I think it could go down by 20-23 % actualy if they would be forced to compete on a like by like basis.


 


Sunny said:


> I wasn't even aware as a domestic user you could switch to Airtricity. I thought it was just business customers.  They won't win any marketing campaigns!


Does anyone find it odd how much publicity this generated compared to Airtricity's similar announcement 2 weeks ago? 

From what I could see Airticity's annoucement only merited a small article in the daily press. I resorted to emailing the article and the link to the switching site / rates to friends. Bord Gais's annoucement got a 5 min piece on the 9 o'clock news and was plastered over every radio program from dawn till dusk. The Minister threw in a soundbite about how great it was. No soudbite for Airticity the wind powered electricity company from the Green Minister? Odd.


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## Smashbox (19 Feb 2009)

I hardly heard about Airtricity, they didn't advertise themselves enough.


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## Howitzer (19 Feb 2009)

Smashbox said:


> I hardly heard about Airtricity, they didn't advertise themselves enough.


The 9 o'clock news is advertsing space? The Minister is a paid spokesman?


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## dodo (22 Feb 2009)

Given the amount of increases in gas prices in the last few years,why would anybody think the gas company wont do the same again.If they where to guarantee  that they would always be 10% cheaper than current supplier then  I would change ove.


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## DublinTexas (22 Feb 2009)

Howitzer said:


> The 9 o'clock news is advertsing space? The Minister is a paid spokesman?



Yes he is a paid spokesman for state owned monopoles like board gas and ESB. He has a vested interest in keeping people with the state owned bodies.


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## Complainer (22 Feb 2009)

dodo said:


> If they where to guarantee  that they would always be 10% cheaper than current supplier then  I would change ove.


Isn't that exactly what they have guaranteed?

From 





> *You will save a minimum of 10%* on you electricity costs.*
> 
> 
> Plus 2% if you pay your bill by direct debit.
> Plus a further 2% for our existing natural gas customers.


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## macnas (22 Feb 2009)

after years of paying ESB by credit card they recently informed me that they would no longer accept payment this way. The ESB even had prizes to encourage people to pay by direct debit or by c card! Now An Bord Gais will take payment in any form.


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## Protocol (22 Feb 2009)

I wonder will the ESB start selling gas now??


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## DublinTexas (22 Feb 2009)

Protocol said:


> I wonder will the ESB start selling gas now??


 
Giving that they (Bord Gais) have a virtual monopoly (and hence buy massive amounts on the wholesale market) in their area their prices are still at least 1.35% higher than their only competition (small) and if the winter saver price is used, they are actualy 12.84% higher it is clear that there is potential in the market for further competition.

Now as the Bord Gais price is set by the CER they can't offer cheaper gas price, but they can offer cheaper electricity prices.

Similar the ESB can't charge cheaper electricity (because of the CER) but they could offer cheaper gas prices.

Knowing our goverment and their continuing attempt to keep a grib on the market (why else would Bord Gais make competition to ESB) I think that there is a danger that ESB is entering the gas market soon, promissing 10% discount.

And in the end they all will still make money because in the end it all comes out of the same pod (the goverments one).


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## Howitzer (23 Feb 2009)

DublinTexas said:


> Yes he is a paid spokesman for state owned monopoles like board gas and ESB. He has a vested interest in keeping people with the state owned bodies.


I know I'm being pedantic here but this isn't the case. We've been told time and again by the ESB (and I assume the same holds for BG) that they are independent companies. They are members of IBEC and the ESB "had" to pay it's employees their recent pay increases for the partnership agreements as they were a profitable independent company. They do not have to pay the Pension Levy, ditto for BG.

There's a self serving agenda here. We're told the Regulator allowed excessive increases in electricity prices over the last few years in order to stimulate competition in the market. Arguably these increases and the current high price for energy in Ireland are one of the principle factors leading to so many companies leaving Ireland due to our high cost base.

Genuine competition arrives in form of Airtricity (a wind powered company) and that's ignored. And in the face of growing criticism about ESB prices/wage increases a (presumably) very expensive campaign is launched to shuffle customers from one semi state body to another to give the illusion of a competitive market.

I believe BG doesn't even have a electricity generating capacity at the moment with their plant coming on line next year.


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