Electricity & Gas Retail Markets Report Q1 2012This report for Q1 2012 contains information on the...

Electricity & Gas Retail Markets Report Q1 2012

DOCUMENT TYPE:

Information Paper

REFERENCE:

CER/12/112

DATE PUBLISHED:

20th July 2012

QUERIES TO: [email protected]

The Commission for Energy Regulation, The Exchange, Belgard Square North, Tallaght, Dublin 24. www.cer.ie

http://www.cer.ie/

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Executive Summary This report for Q1 2012 contains information on the retail markets in electricity and gas. It includes metrics on market share, switching rates, the rollout of pay as you go meters, debt flagging and customer disconnections. Some of the key findings are highlighted below. Market Overview Electricity consumption was down across all electricity retail sectors

compared with the same period last year. Overall consumption was down 4% compared with the same quarter last year. Customer numbers increased slightly from levels in Q4 2011.

At the end of Q1 2012, Electric Ireland had a 57.65% share of the domestic market (MWhs) in electricity; this has increased from 55.18% at the end of Q2 2011.

The domestic gas market is the only remaining retail market sector that is still subject to tariff regulation, Bord Gáis Energy’s domestic market share was 71% for both customer numbers and consumption at the end of Q1 2012, down 2% on Q4 2011.

Energia is the largest supplier in Small and Medium Enterprise (SME) electricity markets and Electric Ireland is the largest in the Large Energy User (LEU) market. BGE is the largest supplier in all gas business markets.

Switching

While electricity switching has increased 11% from Q4 2011, the overall

electricity switching figures are down 37% from Q1 2011. There was an average of 21,596 per month in Q1 2012, down from 34,764 in Q1 2011.

Airtricity had the largest net gain in terms of domestic electricity customer switching in Q1 2012, gaining nearly 10,000 customers while Bord Gáis Energy lost over 17,000 customers during the same period.

In the gas market, overall switching figures are up 10% on Q4 2011, but down 7% when compared with the same quarter last year. As with electricity, Airtricity had the largest net gain in terms of domestic gas customer switching in 2011.

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Pay As You Go Meters Rollout of pay as you go (PAYG) meters is ongoing with 2634 electricity

keypad meters installed in Q1 2012, which gives a total of 3,345 meters installed by the end of Q1 2012.

3,276 gas PAYG meters were installed in Q1 2012, which gives a total of 29,187 gas PAYG installed by the end of Q1 2012.

There is some evidence to suggest some customers are reluctant to take a PAYG meter, and the CER will work with voluntary organisations as well as energy suppliers to promote the rollout of PAYG and customer education on the benefits of PAYG meters for managing payments and arrears.

Customer Debt & Disconnections

The CER is concerned that disconnection figures are up on the same quarter last year in gas & electricity, although further data for April and May show that this trend reverses in Q2. Q1 2011 figures were lower because of a very cold winter stretching into Q1; the winter in 2011/12 was very mild by comparison.

There were 5,063 electricity and 1,706 gas disconnections for reason of non-payment in Q1 2012. Proxy data from the Distribution System Operators indicates that a significant number of these disconnections may relate to vacant premises, where no customer is in residence: ~ 30% of electricity disconnections may relate to vacant premises, ~58% in gas (though the latter estimate is less reliable due to probable seasonal effects).

When adjusted for supplier market shares in Q1 2012, Airtricity has completed the highest number of domestic and business customer disconnections in electricity, Bord Gáis Energy has completed the highest number gas domestic and business customer disconnections. Both Airtricity and Bord Gáis Energy significantly increased the number of electricity disconnections on the same quarter last year, Electric Ireland reduced the number of actual customer disconnections by 60% in the same period. All suppliers showed an increase in gas disconnections.

The difficult economic climate has led to an increase of customer arrears and debt within the industry. However the disconnection of a customer’s energy supply should always be the last resort and all suppliers are required to offer a payment plan or prepayment solution to customers in advance of proceeding to disconnect. The CER is actively working with suppliers to understand what proactive measures suppliers are adopting to reduce the number of customer disconnections; including early engagement, increasing the number of customer contacts and the installation of PAYG meters, which

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is having a positive impact on the level of disconnections. The CER audits suppliers to ensure that the Codes of Practice which deal with customer disconnection and prepayment are being complied with but notes that it is vital that customer’s faced with arrears engage with their supplier regarding payment plans and PAYG meters to avoid disconnection.

The CER will continue to monitor the retail markets in 2012. The next report covering market data for Q2 2012 will be published at the end of Q3 2012.

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Table of Contents

Executive Summary ........................................................................................................ 2 1.0 Introduction ............................................................................................................... 7

1.1 The CER for Energy Regulation ............................................................................. 7 1.2 Purpose of this paper ............................................................................................. 7

2.0 Overview of Retail Market ......................................................................................... 8

2.1 Introduction ............................................................................................................ 8 2.2 Electricity ............................................................................................................... 8

2.2.1 Domestic Market ............................................................................................. 8 2.2.2 Small Business Market .................................................................................. 10 2.2.3 Medium-Sized Business Market .................................................................... 12 2.2.4 Large Energy Users ...................................................................................... 13

2.3 Gas ...................................................................................................................... 15 2.3.1 Domestic ....................................................................................................... 15 2.3.2 NDM IC ......................................................................................................... 17 2.3.3 Fuel Variation Tariff (FVT) ............................................................................. 19 2.3.4 Regulated Tariff Formula (RTF) ..................................................................... 21

2.4. Summary ............................................................................................................ 23 3.0 Customer Switching ................................................................................................ 24

3.1. Introduction ......................................................................................................... 24 3.2 Electricity Switching ............................................................................................. 24

3.2.1 Total Switching .............................................................................................. 24 3.2.2 Total Switching by Customer Category .......................................................... 25 3.2.3 Switching by Supplier .................................................................................... 26 3.2.4 Electricity New Registrations ......................................................................... 27

3.3 Gas Switching ...................................................................................................... 28 3.3.1 Total Switching .............................................................................................. 28 3.3.2 Total Switching by Customer Category .......................................................... 28 3.3.3 Switching by Supplier .................................................................................... 29 3.3.4 New Gas Registrations .................................................................................. 30

3.4 Summary......................................................................................................... 31 4.0 Pay As You Go Meters ............................................................................................ 32

4.1 Introduction .......................................................................................................... 32 4.2 Electricity Pay As You Go Meters ........................................................................ 32 5.4 Gas Pay As You Go Meters ................................................................................. 32 5.4 Summary......................................................................................................... 33

5.0 Customer Debt & Disconnection .............................................................................. 34

5.1 Introduction .......................................................................................................... 34 5.2 Debt Flagging ...................................................................................................... 34

5.2.1 Electricity Debt Flagging ................................................................................ 34 5.2.2 Gas Debt Flagging ........................................................................................ 34

5.3 Customer Disconnections .................................................................................... 35 5.3.1 Electricity Disconnections .............................................................................. 35

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5.3.2 Domestic Electricity Disconnections .............................................................. 36 5.3.3 Electricity Disconnections by Supplier ........................................................... 37 5.3.4 Electricity Estimation of Vacant Premises ...................................................... 39

5.4 Gas Market Disconnections ................................................................................. 40 5.4.1 Domestic Gas Disconnections ....................................................................... 41 5.4.2 Gas Disconnections by Supplier .................................................................... 42

5.5 Summary......................................................................................................... 47 6.0 Next Steps ............................................................................................................... 49

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1.0 Introduction

1.1 The CER for Energy Regulation

The Commission for Energy Regulation (‘the CER’) is the independent body responsible for overseeing the regulation of Ireland's electricity and gas sector’s. The CER was initially established and granted regulatory powers over the electricity market under the Electricity Regulation Act, 1999. The enactment of the Gas (Interim) (Regulation) Act, 2002 expanded the CER’s jurisdiction to include regulation of the natural gas market, while the Energy (Miscellaneous Provisions) Act 2006 granted the CER additional powers in relation to gas and electricity safety. The Electricity Regulation Amendment (SEM) Act 2007 outlined the CER’s functions in relation to the Single Electricity Market (SEM) for the island of Ireland. The CER and the Northern Irish Utility Regulator (UR) regulate this market. The CER is working to ensure that consumers benefit from regulation and the introduction of competition in the energy sector.

1.2 Purpose of this paper

The purpose of this paper is to provide industry and interested stakeholders with relevant information on the developments of competition in the electricity and gas retail markets in the first quarter of 2012.

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2.0 Overview of Retail Market

2.1 Introduction

This section contains the market share data for all electricity and gas suppliers. Data is presented in terms of actual customer numbers and market volume (MWhs) for Q1 2012 as well as showing trends in market share since the first quarter of 2009.

2.2 Electricity

2.2.1 Domestic Market

The domestic market refers to residential customers with an urban (DG1) or rural (DG2) connection to the low voltage network. Table 2.1 shows the customer numbers for each supplier at the end of Q1 2012, and consumption. Overall, domestic consumption in Q1 2012 was down from 2,646,581 MWhs in the same period in 2011, possibly due to milder weather in Q1 2012.

Customer No's MWhs

Electric Ireland 1,286,452 1,408,463

Airtricity 363,238 501,089

Bord Gáis Energy 365,249 521,488

Others 8,349 12,118

Total 2,023,288 2,443,157

Table 2.1 Domestic Market Customer Numbers and Consumption (MWhs) in Q1 2012

Figures 2.1 and 2.2, overleaf, show the market share in terms of customer numbers and MWhs for the first quarter of 2012. Electric Ireland’s market share in terms of customer numbers has increased slightly relative to the previous quarter, while Bord Gáis Energy’s customer numbers have declined slightly. In terms of MWhs supplied, Electric Ireland’s MWhs market share has risen by just under 1 % from the previous quarter. Bord Gáis Energy’s MWhs market share has dropped by over 1% over the same period, while Airtricity’s share increased by nearly 0.5%. Electric Ireland’s MWhs market share is still below the deregulation threshold of 60%, which was set out in the electricity Roadmap. There are also two independent suppliers with over 10% market share, which satisfies the market share criteria.

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Electric Ireland, 63.58%

Airtricity, 17.95%

Bord Gáis

Energy,

18.05%

Others, 0.41%

Figure 2.1 % Domestic Market Share

(Customer Nos) Q1 2012


Airtricity, 20.51%

Bord Gáis

Energy,

21.34%

Others, 0.50%

Figure 2.2 % Domestic Market Share(MWhs)

in Q1 2012

Figures 2.3 and 2.4, below, show the domestic market share trends in terms of customer numbers and MWhs from Q1 2009 to Q1 2012. Since full deregulation, Electric Ireland’s market share of customer numbers has stabilised, registering a very slight increase on Q4 levels while its share of MWhs has risen slightly from the previous quarter to 57.65%. Over the same period, Airtricity increased both customer numbers and MWhs, while Bord Gáis Energy decreased in customer numbers and MWhs levels from a peak in Q2 2011

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Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3-11 Q4-11 Q1-12

Others

Airtricity

Bord Gáis Energy

Electric Ireland

Figure 2.3 Domestic Market Share Trend (Customer Nos) Q1 2009 to Q1 2012

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Airtricity

Bord Gáis Energy

Figure 2.4 Domestic Market Share Trend (MWhs) Q1 2009 to Q1 2012

2.2.2 Small Business Market

Small Business customers are those with a Low Voltage Non-Maximum Demand (DG5) connection. Table 2.2 presents customer numbers and consumption for Q1 by supplier for the small business market. Overall customer numbers and consumption were down on the same period in 2011. Customer numbers fell from 191,656, while consumption was down from 1,097,055 MWhs in the same period in 2011.

Customer No's MWhs

Electric Ireland 89,555 323,546

Energia 44,196 362,383

Airtricity 36,654 207,846


Others 96 1,442

Total 190,709 1,025,325

Table 2.2 Small Business Market Customer Numbers and Consumption (MWhs) in Q1 2012

Figures 2.5 and 2.6, overleaf, show the market share in terms of customer numbers and MWhs for the first quarter of 2012. There was no significant change for any supplier in terms of customer numbers. In terms of MWhs, Energia and Bord Gáis Energy lost over 1% of market share from the previous quarter while Electric Ireland gained nearly 1% over the same period. Airtricity gained 1.5% in terms of MWhs.

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Energia, 23.17%

Airtricity, 19.22%

Bord Gáis

Energy,

10.60%

Others, 0.05%

Figure 2.5 % Small Business Market

Share (Customer Nos) Q1 2012


Energia, 35.34%

Airtricity,

20.27%

Bord Gáis

Energy,

12.69%

Others, 0.14%

Figure 2.6 % Small Business Market

Share (MWh) in Q1 2012

Figures 2.7 and 2.8, below, show the market share trend in customer numbers and MWhs from Q1 2009 to Q1 2012. Since the business market was fully deregulated in October 2010, Energia has increased its share of customer numbers and MWhs up to Q3 2011, MWhs supplied have decreased by 1.5% for Energia since Q3 2011.

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Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3-11 Q4-11 Q1-12

Others

Bord Gáis EnergyAirtricity

Energia

Electric Ireland

Figure 2.7 Small Business Market Share Trend (Customer Nos) Q1 2009 to Q1 2012

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Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3-11 Q4-11 Q1-12

Others

Bord Gáis Energy

Airtricity

Energia

Electric Ireland

Figure 2.8 Small Business Market Share Trend (MWhs) Q1 2009 to Q1 2012

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2.2.3 Medium-Sized Business Market

Medium-Sized Business customers are those with a Low Voltage Maximum Demand (DG6) and Public Lighting (DG3) connections. Table 2.3 shows customer number and MWhs in the medium-sized business market for Q1 2012. Overall customer numbers have increased from 24,196 in Q1 2011, while MWhs has decreased from 1,075,936 from the same period in 2011.

Customer No's MWhs

Electric Ireland 13,863 278,423

Energia 5,444 402,098

Airtricity 3,410 254,761


Others 96 12,139

Total 24,357 1,063,357

Table 2.3 Medium Business Market Customer Numbers and Consumption (MWhs) in Q1 2012

Figures 2.9 and 2.10, below, show the market share in terms of customer numbers and MWhs for Q1 2012. The medium sized business market remained stable with only Airtricity seeing an increase of over 1% in customer numbers from Q4 2011. Electric Ireland fell over 1% in terms of MWhs, with Bord Gáis Energy’s MWh share falling by 1%. All other suppliers registered slight increases in market share of MWhs.


Energia, 22.35%

Airtricity, 14.00%

Bord Gáis Energy, 6.34%

Others, 0.39%

Figure 2.9 % Medium Business Market Share

(Customer Nos) Q1 2012

Figure 2.10 % Medium Business Market

Share (MWh) in Q1 2012

Figures 2.11 and 2.12, overleaf, show the market share trend in terms of customer numbers and MWhs from Q1 2009 to Q1 2012. Electric Ireland’s market share declined through 2009 and most of 2010 and in particular in terms of their share of MWhs supplied. This trend has continued through 2011, with Electric Ireland markets share decreasing in customer numbers and MWhs although its rate of change has slowed down. Since the business market was fully deregulated in October 2010 the changes in market share between the four major suppliers in the medium-sized business market have been less pronounced.

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Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3-11 Q4-11

Others

Vayu


Energia

Figure 2.11 Medium-Sized Business Market Share Trend (Customer Nos) Q1 2009 to Q1 2012

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Vayu


Energia

Electric Ireland

Figure 2.12 Medium-Sized Business Market Share Trend (MWhs) Q1 2009 to Q1 2012

2.2.4 Large Energy Users

LEU customers are those with DG 7, 8, 9, 10 & TCon connections. Table 2.4, overleaf, shows total LEU market customer numbers and consumption for Q1 2012. There was an increase in LEU customer numbers from 1,623 in Q1 2011. MWhs increased from 1,857,983 in Q1 2011.

Customer No's MWhs

Electric Ireland 766 893,376

Energia 260 370,078

Airtricity 356 293,475

Bord Gáis Energy 170 173,371

Vayu 61 40,825

Others 35 110,367

Total 1,648 1,881,492

Table 2.4 LEU Market Customer Numbers and Consumption (MWhs) in Q1 2012

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Figures 2.13 and 2.14, below, show market shares for the LEU market at the end of Q1 2012. Airtricity gained 1% in customer numbers from Q4 2011, Electric Ireland had a loss of over 1% on the same period last year. Vayu had a slight increase in customer numbers, while the other suppliers remained relatively unchanged.


Energia, 15.78%

Airtricity, 21.60%

Bord Gáis

Energy,

10.32%

Vayu, 3.70%

Others, 2.12%

Figure 2.13 % LEU Market

Share (Customer Nos) Q1 2012


Energia, 19.67%

Airtricity, 15.60%

Bord Gáis

Energy,

9.21%

Vayu, 0.95%

Others,

5.87%

Figure 2.14 % LEU Market Share (MWh) in Q1 2012

Figures 2.15 and 2.16, overleaf, show market share trends in customer numbers and MWhs from Q1 2009 to Q1 2012. In terms of MWhs, Energia’s share declined in all 4 quarters of 2011, and this decline has continued in Q1 2012. All other suppliers’ market shares remained stable relative to the previous quarter, with Vayu and Bord Gáis Energy having slight increases. In terms of customer numbers, Electric Ireland has lost 4% of market share in customer numbers from the start of 2011, while Vayu has a 2% gain over the same period.

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Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3-11 Q4-11 Q1-12

Others

Vayu


Energia

Electric Ireland

Figure 2.15 Large Energy Users Market Share Trend (Customer Nos) Q1 2009 to Q1 2012

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Others

Vayu


Energia

Electric Ireland

Figure 2.16 Large Energy Users Market Share Trend (MWHs) Q1 2009 to Q1 2012

2.3 Gas

In relation to the gas market only, the current method of calculation of gas volumes supplied and market share uses Non Daily Metered (NDM) allocations data, which is derived statistically. Bord Gáis Networks (BGN) has recently suggested that this method of calculation is not the most statistically accurate, and when compared with reconciliation data (i.e. metered throughput), allocation data has accuracy in the range of +/-15% for NDM IC’s and +/-4% for Residential. BGN has proposed that a different methodology, using Annual Quantity, basis for calculation of market shares for the NDM sector. This proposed new methodology will be consulted on in the near future. The allocations methodology is used in this report for consistency with previous gas reporting.

2.3.1 Domestic

The domestic gas market refers to Non Daily Metered Residential customers. Table 2.7, overleaf, sets out customer numbers and GWhs. By the end of Q1 2012, the domestic gas market had not met all the required criteria for deregulation, while there were at least three active suppliers in the market, at the time only two of these had a market share greater than 10%. Bord Gáis Energy’s market share at 71% was above the required threshold of 60% (defined in terms of customer numbers in the gas market Roadmap). Another criteria for deregulation of the domestic market sector is that the annual switching rate is greater than 10%, this was been met as the switching rate for the gas domestic sector over the 12 months to end 2011 was approximately 17%1. The CER is continuing to monitor the development of competition in the domestic gas market and the Competition Review for Q1 20122 was published on 6th June 2012.

1 In 2011 approximately 109,267 domestic customers switched supplier

2 Review of the Regulatory Framework for the Gas Retail Market Competition Review Q1-2012

CER12/067

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Customer No's GWhs

Airtricity 118,468 572

BG Energy 446,737 2,015

Electric Ireland 37,315 154

Flogas 25,660 110

Total 628,180 2,852

Table 2.7 Domestic Market Customer Numbers and Consumption (GWhs) Q1 2012

In terms of customer numbers, Electric Ireland continues to gain market share, with a 2% increase from the previous quarter, while Bord Gáis Energy’s market share has declined by 2% over the same period. Airtricity has a 19% market share in terms of customer numbers at the end of Q1 2012 - no change from the previous quarter. However, Airtricity has a 20% market share of GWhs, up from 17.5% in the previous quarter. Electric Ireland had a 3.5% gain in MWhs, while Flogas gained nearly 1%. This data is presented in figures 2.17 and 2.18, below.

Figure 2.17 % NDM Residential Market Figure 2.18 % NDM Residential MarketShare Share (Customer Nos) Q1 2012 (GWhs) in Q1 2012

Figures 2.19 and 2.20, below, show the market share trends in terms of customer numbers and GWhs from the end of 2009 to 2011. In terms of customer numbers, Bord Gáis Energy’s market share has decreased from 98% in 2009 to 71% at the end of Q1 2012.

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Figure 2.19 Domestic Market Share Trend (Customer Nos) 2009 – Q1 2012

Figure 2.20 Domestic Market Share Trend (GWhs) 2009 – Q1 2012

2.3.2 NDM IC

The NDM IC market is for business customers with a Supply Point Capacity below 3,750kWh and annual consumption level below 73,000kWh3. NDM IC market has been deregulated since the 1st October 2011. Table 2.8, overleaf, gives the breakdown of actual customer numbers and GWhs.

3 Gaslink - FAR Procedures – Forecasting, Allocation, Reconciliation

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Customer No's GWhs

Airtricity 1,217 18

BG Energy 11,429 237

Electric Ireland 318 4

Energia 4,338 130

Flogas 4,981 157

Phoenix 3 0

Vayu 569 22

Total 22,855 569

Table 2.8 NDM IC Market Customer Numbers and Consumption (MWhs) in Q1 2012

Figures 2.21 and 2.22, below, show the NDM IC percentage market share in terms of customer numbers and GWhs. The Bord Gáis Energy market share of GWhs in NDM IC has fallen by 4% from Q4 2012, levels of customer numbers has declined by 1%. Flogas’s share of GWhs has increased by 4% from the previous quarter, with customer numbers increasing slightly. Energia had a loss of 3% in GWhs, while customer numbers declined by over 1%. Airtricity had a rise of 2% in GWhs and 1.5% in customer numbers. All other suppliers remained relatively unchanged.

Figure 2.21 % NDM IC Market Share (Customer Nos) Q1 2012

Figure 2.22 % NDM IC Market Share (GWhs)

Q1 2012

Figures 2.23 and 2.24, overleaf, show the market share trends in terms of customer numbers and GWhs, for the NDM IC market, from the end of 2009 to end of Q1 2012. Bord Gáis Energy’s market share has declined from 74% at the end of 2009 to 50% at the end of Q1 2012 for customer numbers. In GWhs, Bord Gáis Energy had 42% at the end of Q1 2012 down from 81% at the end of 2009. Both Energia and Flogas have gains of 8% and 24% in GWhs respectively over the same period while Flogas gained 16% in customer numbers. Energia’s customer numbers remained unchanged over the same period.

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Figure 2.23 NDM IC Market Share Trend (Customer Nos) 2009 – Q1 2012

Figure 2.24 NDM IC Market Share Trend (GWhs) 2009 – Q1 2012

2.3.3 Fuel Variation Tariff (FVT)

While there are no longer regulated business tariffs, the reporting structure has been maintained in this report for consistency and comparison4. The FVT customer category refers to NDM gas consumers with a Supply Point Capacity above 3,750 kWh and consumption level above 73,000 kWh gas annually. Table 2.9, overleaf, presents actual customer numbers and GWhs by supplier in Q1 2012.

4 Subject to publication of revised methodology.

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Customer No's GWhs

Airtricity 33 27

BG Energy 647 259


Energia 263 95

Flogas 336 144

Phoenix 2 1

Vayu 451 174

Total 1,735 700

Table 2.9 FVT Market Customer Numbers and Consumption (GWhs) in Q1 2012

Figures 2.23 and 2.24, below, show the FVT market share in terms of customer numbers and consumption. The FVT market was deregulated on 1st October 2011. Bord Gáis Energy’s market share in customer numbers and GWhs declined by 2% and 9% respectively from the previous quarter. Energia saw a 3% decrease in GWhs and a 1% rise in customer numbers over the same period. Flogas saw a 1% rise in customer numbers and 5% rise in consumption. Vayu saw a 6% increase in GWhs and a 3% rise on customer numbers from Q4 levels Airtricity having a 1% in GWhs despite a 3% fall in customer numbers.

Figure 2.25 % FVT Market Share (Customer Nos) Q1 2012

Figure 2.26% FVT Market Share (GWh)

Q1 2012

Figures 2.27 and 2.28, overleaf, show the market share trends in terms of customer numbers and GWhs, for the FVT market, from the end of 2009 to end of 2011. Bord Gáis Energy has decreased 32% in customer numbers, and 42% in GWhs since the end of 2009. In terms of customer numbers, the largest gain, over the same period, was Flogas with 14% and Vayu with 13%. In GWhs, Vayu had a gain of 17%, while Flogas had a 18% gain.

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Figure 2.27 FVT Market Share Trend (Customer Nos) 2009 – Q1 2012

Figure 2.28 FVT Market Share Trend (GWhs) 2009 – Q1 2012

2.3.4 Regulated Tariff Formula (RTF)

As for the FVT, while there is no longer a Regulated Tariff Formula (RTF), the reporting structure has been maintained for consistency and comparison. This customer category refers to customers with an annual consumption of between 5.5 GWhs and 264 GWhs. The RTF market was deregulated on 1st October 20105. Table 2.10, overleaf, shows the actual customers number and GWhs by suppliers.

5 Review of the Regulated Tariff Formula - CER 10/088

http://www.cer.ie/en/gas-retail-market-decision-documents.aspx?article=5a9e0498-cc54-44f9-b055-924c7ee5263f

22

Customer No's GWhs

Airtricity 19 92

BG Energy 57 297


Energia 50 277

Gazprom 14 298


Vayu 65 318

Total 244 1,479

Table 2.10 RTF Market Customer Numbers and Consumption (GWhs) in Q1 2012

At the end of Q1 2012 Vayu had the largest market share in terms of customer numbers at 27%, which is down from 29% in Q4 2011. Vayu and Bord Gáis Energy both had 2% drops in customer numbers, while Gazprom had a 2% increase. Vayu is now also the largest supplier in terms of GWhs at 22%, with Bord Gáis Energy dropping by 4% from Q4 2011 to 20% in Q1 2012. Energia also had a fall of 4% in GWhs over the same period. Gazprom saw a 2% increase in GWhs, Phoenix had a 4% increase with other suppliers remaining stable. This data is presented in figures 2.29 and 2.30, below.

Figure 2.29 % RTF Market Share (Customer

Nos) Q1 2012

Figure 2.30 % RTF Market Share (GWhs) Q1 2012

Figures 2.31 and 2.32, overleaf, show the market share trends in terms of customer numbers and GWhs, for the RTF market, from the end of 2009 to end of 2011. At the end of 2011 Bord Gáis Energy’s market share in GWhs is now at 20% down from 40% at the end of 2009. Energia GWhs market share is now at 19% from 33% at the end of 2009. Gazprom and Phoenix had 12% and 9% increases in GWhs respectively.

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Figure 2.31 RTF Market Share Trend (Customer Nos) 2009 – Q1 2012

Figure 2.32 RTF Market Share Trend (GWhs) 2009 – Q1 2012

2.4. Summary

In electricity, Electric Irelands market share of MWhs in the domestic rose slightly from Q4 2011 levels, but remains below the deregulation threshold of 60%. In gas, Bord Gáis Energy’s market share of domestic customer numbers is at 71%, down by 2% from Q4. For electricity small business customers, in terms of MWhs, Bord Gáis Energy lost over 1% of market share from Q4 2011 levels while Electric Ireland and Airtricity gained over 1% over the same period. In gas, Bord Gáis Energy market share of GWhs has fallen by nearly 4% from Q4 2011 levels of customer numbers have also declined by 1%. Energia share of GWhs has decreased by nearly 3% from Q4 while Airtricity had a 2% gain. All other suppliers remain at relatively stable levels.

24

3.0 Customer Switching

3.1. Introduction

Customer switching is a key indicator of retail competition and supplier activity within the retail market. This section contains a description of customer switching activity with a breakdown of suppliers’ switches in the relevant markets and new registrations

3.2 Electricity Switching

Switching in the following section is calculated as the total gains for each supplier not including new customer registrations. The switching rate is calculated by dividing the total customer numbers in a sector by the total number of switches in that sector in a given period.

3.2.1 Total Switching

Overall customer switching, across all market sectors, has declined from a peak of 35,000 in July 2011. While switching has increased 11% from Q4 2011, the overall switching figures are down 37% from Q1 2011 – there was an average of 21,596 per month in Q1 2012, down from 34,764 in Q1 2011. As figure 3.1, below, shows domestic switches account for the majority of all switches.

Figure 3.1 Total Electricity Switching in all Sectors 2009 - March 2012

25

3.2.2 Total Switching by Customer Category

Figures 3.3, 3.4, 3.5, and 3.6, below, show the monthly switches in all market segments since January 2009. From the end of the summer 2011, the level of switching has dropped from over 30,000 a month to around 14,000 a month at the end of Q4 2011. The level in Q1 2012 has risen to an average of 18,608 switches per month, up from an average of 15,944 in Q4 2011.

Figure 3.2 Monthly Electricity Switches by Domestic Customers 2009-March 12

Figure 3.3 Monthly Electricity Switches by Small Business Customers 2009- March 12

26

Figure 3.4 Monthly Electricity Switches by Medium-Sized Business Customers 2009 – March 12

Figure 3.5 Monthly Electriicty Switches by Large Energy Users 2009-March 2012

3.2.3 Switching by Supplier

Figure 3.6, overleaf, shows the net volume of switching by Suppliers. Electric Ireland’s net switching gain continued to rise since the deregulation of the domestic market on the 4th April 2011. Since deregulation of the domestic market, Electric Ireland has gained an average of 2,800 customers a month between May 2011 and March 2012. Bord Gáis Energy sustained a net monthly

27

loss since April 2011. Airtricity continued to maintain a net increase in switching in Q1 2012.

Figure 3.6 Monthly Electicity Switching by Supplier 2010 – Q1 2012

3.2.4 Electricity New Registrations

ESB Networks defines a new registration as the situation where a customer who has moved into a site, which has been de-energised for at least 3 months and has remained vacant during that period. Sites normally remain registered to a supplier for 3 months after they are de-energised. If a new customer moves in within the three months then that is not counted as a new registration. If however the site was vacant for the full three months, the site would be deregistered from that supplier. If after three months, a new customer moved into the site then that would be counted as a new registration. Figure 3.7, below, shows the trends of new registration numbers by supplier.

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-12

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-12

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Others Bord Gais Energy Airtricity Energia Electric Ireland

Figure 3.7 New Electricity Registrations by Supplier

28

3.3 Gas Switching

Switching in the following section is calculated as the total gains for each supplier not including new customer registrations. The switching rate is calculated by dividing the total customer numbers in a sector by the total number of switches in that sector in a given period.

3.3.1 Total Switching

Switching numbers increased during Q1 2012, reaching almost 10,500 in March.

-

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4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Gas Total Change of Supplier

2010

2011

2012

Figure 3.9 Total Gas switching across all markets sectors 2010 – Q1 2012

3.3.2 Total Switching by Customer Category

Residential customers are responsible for the majority of switches in gas figure 3.10 shows switching in the residential market rebounded in March 2012, rising to over 10,100 switches. There was average figure of slightly over 8,500 per month in Q1 2012, down from an average of 9,100 residential switches per month throughout 2011. IC switches account for average of 390 switches per month in Q1 2012.

29

3.10 Monthly Gas Switches by Domestic Customers 2010 – Q1 2012

Gas IC switches rose to 632 in February 2012, the highest monthly switching level for IC customers to date.

Figure 3.11 Monthly Gas Switches by IC Customers 2010-11

3.3.3 Switching by Supplier

Figure 3.13 shows the monthly net volumes of switching by supplier in 2010-12. In March 2012, Airtricity had their first net loss of customers in the gas market, losing 532 customers. Bord Gáis Energy’s net losses have slowed down from over 8,000 per month in January 2011 to less than 4,500 per month in March 2012.

30

-40,000

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Airtricity Bord Gais Energy Electric Ireland Energia

Flogas Gazprom Phoenix VAYU

Figure 3.12 Monthly Gas Switching by Supplier 2010 – 12

3.3.4 New Gas Registrations

BGN defines a new registration as the situation where a new meter is fitted or a meter is unlocked at GPRNs where there is no supplier registered. A registration unlock is where the site has been locked for greater than 18 months and there has been no consumption since the lock was carried out and no customer registered. Figure 4.14, below, shows the trend of new registrations by supplier from January 2010.

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VAYU Viridian Flogas Electric Ireland Airtricity Bord Gáis Energy

Figure 3.13 Gas Registrations by Supplier

31

3.4 Summary

While switching has increased 11% from Q4 2011, the overall switching figures are down 37% from Q1 2011. There was an average of 21,596 per month in Q1 2012, down from 34, 764 in Q1 2011. Airtricity had the largest net gain in terms of domestic customer switching in Q1 2012, gaining nearly 10,000 customers while Bord Gáis Energy lost over 17,000 customers during the same period.

In the gas market, switching figures are stable at 17% from Q4 2011, but down 6% when compared with the same quarter last year. As with electricity, Airtricity had the largest net gain in terms of domestic gas customer switching in 2011.

32

4.0 Pay As You Go Meters

4.1 Introduction

The Code of Practice on Customer Billing & Disconnection stipulates that suppliers must offer a customer a Pay As You Go (PAYG) meter solution in advance of disconnection. The CER has been working with industry to facilitate the rollout of electricity and gas pay as you go meters free of charge for those customers who are experiencing financial hardship. This requires all domestic suppliers to put in place the necessary processes such that they can provide PAYG meters to their customers, and approval to the Networks businesses to install meters free of charge to customers in financial need.

4.2 Electricity Pay As You Go Meters

In the case of the electricity market, historically, domestic customers have used budget controllers. They are not meters but a device that is installed in addition to a customer’s meter. The CER approved a project to procure and implement a robust PAYG metering solution for all domestic electricity suppliers from October 2011.

0

500

1000

1500

2000

2500

3000

3500

4000

Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12

Figure 4.1 – Keypad Electricty PAYG Meters Q4 2011 – Q1 2012

Figure 4.1 shows the level of instalment of pay as you go meters from October 2012 to March 2012. 2,634 meters were installed in Q1 2012, which gives a total of 3345 meters installed by the end of Q1 2012.

5.4 Gas Pay As You Go Meters

In the case of the gas market, a full PAYG solution has been operational since Q4 2008. As of the end of March 2012, there were 29,187 PAYG meters installed, 91% of these were installed for financial hardship. Figure 4.2 shows the

33

level of instalment of PAYG gas meters from Q1 2009 to March 2012, 3,276 meters were installed in Q1 2012.

0

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-12

Number

New PAYG Fits - Quarterly 2009/10 & Monthly 2011-2012

Figure 4.2 – Keypad Gas PAYG Meters Q1 2009 – Q1 2012

5.4 Summary

The rollout of PAYG meters is ongoing with 3,345 electricity keypads installed in Q1 2012. 3,276 gas PAYG meters were installed in Q1 2012, which gives a total of 29,187 gas PAYG installed by the end of Q1 2012.The CER is actively engaging with industry participants on this issue to ensure that customers that could benefit from the installation of a PAYG meter can avail of one. This is to assist customers in managing their arrears and to avoid disconnection from supply. There is some evidence to suggest some customers are reluctant to take a PAYG meter, and the CER will work with voluntary organisations as well as energy suppliers to promote the rollout of PAYG and customer education on the benefits of PAYG meters for managing payments and arrears.

34

5.0 Customer Debt & Disconnection

5.1 Introduction

In taking the decision to cut off a customer’s supply, a supplier must complete all the steps set out in its Code of Practice on Customer Billing & Disconnection. This code is approved by the CER. The CER monitors the level of debt flagging and disconnections in the retail market on a monthly basis.

5.2 Debt Flagging

A process for debt flagging was introduced in October 2011, where a customer requests to change to a new supplier; the customer’s existing supplier has the ability to inform the new supplier if the customer has an outstanding debt, which satisfies the industry thresholds approved by the CER. The new supplier can then choose whether to proceed with or cancel the request to switch where this ‘flag’ has been raised. The CER monitors the use of this flagging facility by both losing and gaining suppliers on an ongoing basis to ensure that the process is being applied correctly.

5.2.1 Electricity Debt Flagging

Figures 5.1 and 5.2 show the debt flagging activity reported to the CER by ESB Networks between go-live of the debt flagging process up to the end of March 2012.

0

100

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300

400

500

600

700


Accepted by New SupplierRejected by New Supplier

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%


% Accepted by New Supplier % of Total CoS

Figure 5.1 Electricity Debt Flags - Number Figure 5.2 Electricity Debt Flag - % of Switches

The data provided by ESB Networks shows that from October 2011 to March 2012 between 1% and 3% of all change of supplier requests had valid debt flags. As per the requirements of the CER Debt Flagging Industry Code in these cases, the customer would be advised to make contact with their current supplier to discuss the status of their account and how this can be addressed so that the customer can proceed with changing supplier as soon as possible.

5.2.2 Gas Debt Flagging

As is the case for the electricity market, a relatively low number of debt flags were raised as a percentage of total switches requested during this period, falling

35

from 1.2% in October to just under 0.3% in January 2012. The level of debt flag was stable at about 0.4% in February and March. Unlike electricity, the level of change of supplier requests with debt flags cancelled by a gaining supplier has remained proportionately unchanged, although the absolute level has varied. Gas debt flagging data is set out in figures 5.3 and 5.4 below.

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Accepted by New Supplier

Rejected by New Supplier

0.0%

0.2%

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0.6%

0.8%

1.0%

1.2%

1.4%


% Accepted by New Supplier % of Total CoS

Figure 5.3 Gas Debt Flags - Number Figure 5.4 Gas Debt Flags % of Switches

5.3 Customer Disconnections

5.3.1 Electricity Disconnections

There are 2,240,0026 electricity Meter Point Reference Numbers (MPRNs) of which 2,023,288 are domestic customer connections. Tracking historical trends in disconnections, table 5.1 and figure 5.5 below show the number of disconnections per month from January 2007 up to the end of March 2012 for non-payment of account. The CER carries out audits of all suppliers to ensure compliance with the PAYG and disconnections codes of practice.

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

2007 857 793 759 782 1,157 1,038 1,113 1,178 976 969 1,032 268 10,921

2008 985 954 700 1,047 1,055 1,058 1,212 906 839 808 870 555 10,986

2009 820 823 569 781 708 826 992 858 888 813 998 633 9,709

2010 1,118 1,363 1,447 1,149 1,492 1,756 2,353 2,118 1,771 897 1,045 170 16,679

2011 1,160 977 1,161 1,409 1,459 1,535 2,002 2,064 2,075 1,812 1,489 651 17,794

2012 1,689 1,672 1,702

5,063

Table 5.1 – Total Electricity Disconnections 2007 to Present

6 Data supplied by MRSO (Meter Registration System Operator) within ESB Networks and correct

as at end of September 2011

36

Figure 5.5 below shows overall disconnections in Q1 2012 compared with previous years. Disconnection figures are up on the same quarter last year in electricity, although CER notes that further data obtained for April and May show that this trend reverses in Q2. Q1 2011 figures were lower because of very cold winter stretching into Q1, winter 2011/12 was very mild by comparison.

Figure 5.5 – Total Electricity Disconnections 2007 to March 2012

5.3.2 Domestic Electricity Disconnections

While the previous section shows the total number of monthly disconnections for the domestic and business markets, figure 5.6 and table 5.2 below shows a breakdown between domestic and total customer disconnections from January 2010 up to the end of March 2012. Disconnections at domestic premises account for the vast majority of disconnections, and represented 83% of disconnections during Q1 2012.

Figure 5.6 – Domestic Electricity Disconnections January 2010 to December 2011

37


2010

853

1,086

1,194

983

1,222

1,500

2,060

1,694

1,417

712

815

61

13,597

2011

881

759

908

1,146

1,158

1,236

1,682

1,742

1,740

1,567

1,201

488

14,508

2012 1,388 1,376 1,413

4,177

Table 5.2 – Domestic Electricity Disconnections 2010 to Present

5.3.3 Electricity Disconnections by Supplier

Figures 5.7 and 5.9 show the total disconnection rates by individual supplier for domestic and non-domestic (business) customers, respectively. Figures 5.8 and 5.10 show the disconnections rates by supplier per 10,000 customers for both domestic and non-domestic customers7, this is based on suppliers’ market share of customer numbers.8

Figure 5.7 Total Domestic Disconnections Figure 5.8 Total Domestic Disconnections/10,000Customers

7 For each month, the supplier’s number of disconnections is divided by the supplier’s customer

numbers and multiplied by 10,000 8 Information on customer disconnections has been provided by ESB Networks, data on supplier

customer share has been provided by the MRSO.

38

2011 Electric Ireland

Airtricity Bord Gais

Jan-11 565 227 89

Feb-11 535 145 79

Mar-11 640 160 108

Apr-11 838 206 102

May-11 596 542 20

Jun-11 691 517 28

Jul-11 968 661 53

Aug-11 908 615 219

Sep-11 753 733 254

Oct-11 576 770 221

Nov-11 356 648 197

Dec-11 144 250 94

Jan-12 63 1049 276

Feb-12 320 689 367

Mar-12 310 588 515

Table 5.3 Total Domestic Disconnections Table 5.4 Domestic Disconnections per 10,000 customers

Figure 5.7 shows that from the period January to March 2012, Airtricity had the largest number of disconnections for domestic customers followed by Bord Gáis Energy9, and Electric Ireland. Figure 5.8 shows that Airtricity have the highest average rate of domestic disconnections, over the period, relative to their market share of customers, followed by Bord Gáis Energy and Electric Ireland. Both Airtricity and Bord Gáis Energy significantly increased the number of disconnections on the same quarter last year, taking market shares into account. In the same period, Electric Ireland reduced the number of actual customer disconnections by 60%. For non-domestic customers, figure 5.9 shows that Airtricity has also had the largest number of disconnections, over the period, followed by Electric Ireland, Energia and Bord Gáis Energy. In the non-domestic sector, figure 5.10 shows over the same period Airtricity have the highest average rate of disconnections, relative to market share of customer numbers, followed by Bord Gáis Energy, Energia and Electric Ireland.

9 Airtricity have informed the CER that due to a legacy issue within their IT system, all market

messages sent to ESB networks effectively classifies all disconnections as npa, including those that were non-npa and change of tenancy.


Airtricity Bord Gais

Jan-11 4.36 7.96 2.05

Feb-11 4.18 4.88 1.79

Mar-11 5.06 5.16 2.43

Apr-11 6.66 6.54 2.30

May-11 4.74 16.97 0.45

Jun-11 5.50 15.92 0.64

Jul-11 7.65 19.87 1.26

Aug-11 7.12 18.19 5.41

Sep-11 5.90 21.35 6.39

Oct-11 4.51 22.13 5.63

Nov-11 2.78 18.41 5.10

Dec-11 1.12 7.05 2.46

Jan-12 0.49 29.29 7.31

Feb-12 2.49 19.05 9.89

Mar-12 2.41 16.19 14.10

39

0

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140

Electric Ireland Energia Airtricity Bord Gais

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20

25

30

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40

Electric Ireland Energia Airtricity Bord Gais

Figure 5.9 Total Non-Domestic Disconnection Figure 5.10 Total Non-Domestic

Disconnections Per 10,000 Customers

Table 5.4 Total Non-Domestic Disconnections


Energia Airtricity Bord Gais

Jan-11 130 40 59 50

Feb-11 88 47 54 29

Mar-11 93 55 54 51

Apr-11 120 38 36 69

May-11 69 64 84 84

Jun-11 75 80 92 52

Jul-11 94 68 93 65

Aug-11 109 80 74 59

Sep-11 62 95 101 77

Oct-11 52 56 94 43

Nov-11 47 55 112 74

Dec-11 16 20 66 61

Jan-12 53 67 114 67

Feb-12 48 58 132 58

Mar-12 93 68 86 42


Energia Airtricity Bord Gais

Jan-11 12.49 7.90 15.55 18.05

Feb-11 8.49 9.18 14.34 10.37

Mar-11 9.02 10.58 14.36 18.29

Apr-11 11.65 7.21 9.62 25.00

May-11 6.69 12.04 22.76 30.56

Jun-11 7.25 14.86 25.43 19.22

Jul-11 9.02 12.48 26.15 24.84

Aug-11 10.40 14.61 20.94 23.43

Sep-11 5.90 17.14 28.91 31.03

Oct-11 4.95 10.01 27.16 17.49

Nov-11 4.48 9.88 31.21 31.46

Dec-11 1.53 3.71 16.98 26.62

Jan-11 5.09 12.56 28.52 29.90

Feb-11 4.60 10.89 32.90 26.07

Mar-11 8.93 12.74 21.28 19.16

Table 5.5 Total Non-Domestic Disconnections Per 10,000 Customers

39

The trend in the above graphs shows that Electric Ireland had monthly disconnections for non-domestic customers increasing in Q1 2012. The other 3 (Energia, Bord Gáis Energy and Airtricity) suppliers figures show a different trend, falling from the start to the end of the period examined. Overall, over the period examined, the average monthly number of domestic disconnections per 10,000 customers is approximately 7, while for non-domestic customers is just over 14 per 10,000. This equates to an annual disconnection rate of 0.8% for domestic customers and 1.6% for non-domestic customers.

5.3.4 Electricity Estimation of Vacant Premises

The data on electricity disconnections for non-payment of account, provided by ESB Networks, does not identify if a premises, whether domestic or non-domestic, is actually vacant. Anecdotal evidence from both suppliers and network operators suggests that in a given period of disconnection, there are a significant number of properties, which are in fact vacant. Therefore as a means of proxy, the CER has requested the networks companies to provide data on the number of disconnected premises that were reconnected, within 2 weeks or more of disconnections, to the same supplier or that have switched to a different supplier. This data covers the months of October 2011 to March 2011 and showed that an average of 30% of domestic and 59% of non-domestic premises remained disconnected after 2 weeks or more of disconnection for non-payment of account over Q1 2012.

31% 31% 33% 34%30% 27%

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Figure 5.11 Proxy for Vacant Domestic Premises Figure 5.12 – Proxy for Vacant Non- Domestic Premises

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Figure 5.13, below, shows the domestic disconnections adjusted for a 30% vacant premises rate. These are shown as a percentage of total domestic electric customer numbers. The introduction of PAYG meters in October 2011 has meant that all customers must be offered a PAYG meter before disconnection. A customer accepting a PAYG meter avoids a disconnection. This suggests that the disconnection numbers would be higher if PAYG meters were not available.

0.00%

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Jan-

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-12

% PAYG Installs % PAYG +Disconnections % Disconnection less Vacant Premises

Figure 5.13 % of domestic electricity customers disconnected (adjusted for vacant

premises) Jan 10- Mar 12 and PAYG impact.

5.4 Gas Market Disconnections

As of the end of March 2012, there were 657,83510 Gas Point Registration Numbers (GPRNs), 631,920 of these were domestic connections. Table 5.7 and figure 5.14 sets out the number of disconnections (all CLs and all DMs), which have been carried out by BGN on behalf of suppliers since the beginning of 2008 to the end of March 201211. The total disconnections figures for Q1 2012 have risen considerably from Q1 2011. As with electricity, Q1 2011 figures were lower because of very cold winter stretching into Q1, and winter 2011/12 was very mild by comparison. As in electricity, the CER carries out audits of all suppliers to ensure compliance with the PAYG and disconnections codes of practice.

10

Data provided by the Gas Point Registration Operator (GPRO) within BGN. 11

This methodology includes all Credit Locks and all Disconnect Meters.

41


2008 603 1,064 604 642 658 636 983 784 529 424 173 56 7,156

2009 89 498 445 565 523 604 594 500 680 707 647 296 6,148

2010 348 584 1,041 706 739 454 358 329 315 89 185 85 5,234

2011 112 260 299 323 543 564 579 839 517 491 358 154 5,039

2012 334 593 965

1,892

Table 5.7 – Total CL & DM Gas Disconnections 2008 to Present

-

200

400

600

800

1,000

1,200

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2008 2009 2010 2011 2012

Figure 5.14 – Total Gas Disconnections 2008 to Present

5.4.1 Domestic Gas Disconnections

While the previous section shows the number of monthly disconnections for the whole market, figure 5.15, below, shows a breakdown between domestic and non-domestic gas customer disconnections from January 2010 up to the end of March 2012. Disconnections at domestic premises account for the majority of gas disconnections, representing 91% of disconnections from January to March 2012.

42

0

200

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1000

1200C

ust

om

ers

Domestic Disconnections Total Disconnections

Figure 5.15– Total & Domestic Gas (CL & DM) Disconnections January 2010 to March

2012


2010 329 571 1018 675 725 436 325 302 282 72 161 52 4,948

2011 88 219 212 223 416 510 494 792 444 438 287 120 4,243

2012 283 535 899

1,717

Table 5.8 – Domestic Gas (CL & DM) Disconnections January 2010 to Present

5.4.2 Gas Disconnections by Supplier

The following figures show both domestic and non-domestic as well as total and disconnections per 10,00012 customers for each supplier.13 Figure 5.16 shows that on Bord Gáis Energy have the largest number of disconnections of domestic customers in the period January to March 2012. They are followed by Airtricity and Flogas, while Electric Ireland had only one disconnection. Figure 5.17 shows that when examining domestic disconnections per 10,000 customers Flogas have the highest rate of disconnections from January to March 2012, followed by Bord Gáis Energy, Airtricity, and Electric Ireland. As with electricity, Airtricity and Bord Gáis Energy significantly increased the number of disconnections on the same quarter last year, taking market shares into account. This was also true of Flogas in the same period.

12

For each month, the supplier’s number of disconnections is divided by the supplier’s customer numbers and multiplied by 10,000. 13

Gas Disconnections data has been provided to the CER by BGN. Data on customer numbers is provided to the CER by the GPRO.

43

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800 Ja

n-1

1

Fe

b-1

1

Ma

r-1

1

Ap

r-1

1

Ma

y-1

1

Ju

n-1

1

Ju

l-1

1

Au

g-1

1

Se

p-1

1

Oct-1

1

No

v-1

1

De

c-1

1

Ja

n-1

2

Fe

b-1

2

Ma

r-1

2

BG Energy

Airtricity

Flogas

Electric Ireland

-

10

20

30

40

50

60

Jan

-11

Fe

b-1

1

Ma

r-1

1

Ap

r-1

1

Ma

y-1

1

Jun

-11

Jul-

11

Au

g-1

1

Se

p-1

1

Oct-

11

No

v-1

1

De

c-1

1

Jan

-12

Fe

b-1

2

Ma

r-1

2

BG Energy

Airtricity

Flogas

Electric Ireland

Figure 5.16 Gas Domestic Disconnections Figure 5.17 Gas Domestic by Supplier Disconnections /10,000 Customers

2011 BG Energy Airtricity Flogas Electric Ireland

Jan-11 54 4 1 0

Feb-11 166 18 24 0

Mar-11 161 6 29 0

Apr-11 154 6 32 0

May-11 348 1 38 0

Jun-11 402 40 24 0

Jul-11 316 49 102 0

Aug-11 590 53 93 1

Sep-11 354 32 33 0

Oct-11 306 45 31 0

Nov-11 182 49 14 0

Dec-11 59 30 2 0

Jan-12 163 53 29 0

Feb-12 303 86 49 1

Mar-12 751 48 59 0

Table 5.9 Domestic Gas Disconnections by Supplier

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2011 BG Energy Airtricity Flogas Electric Ireland

Jan-11 1.04 0.46 0.56 -

Feb-11 3.23 1.93 13.19 -

Mar-11 3.17 0.60 15.89 -

Apr-11 3.07 0.58 17.58 -

May-11 7.02 0.09 20.78 -

Jun-11 8.22 3.65 13.12 -

Jul-11 6.57 4.34 55.36 -

Aug-11 12.43 4.61 48.31 0.51

Sep-11 7.51 2.76 16.19 -

Oct-11 6.53 3.85 14.69 -

Nov-11 3.91 4.14 6.38 -

Dec-11 1.28 2.53 0.87 -

Jan-12 3.56 4.45 12.18 -

Feb-12 6.67 7.22 19.81 0.30

Mar-12 16.68 4.05 22.93 -

Table 5.10 Domestic Gas Disconnections per 10,000 customers by Supplier

The disconnections for non-domestic customers as shown in figure 5.18, overleaf, show that Bord Gáis Energy has also the largest number of total disconnections, followed by Energia, Flogas, Airtricity, while Vayu and Electric Ireland did not have any disconnections over the period. For non-domestic customers, shown in figure 5.19, Bord Gáis Energy the highest average rate of disconnections per 10,000 customers, over the period. Energia, Flogas and Airtricity follow them.

-

10

20

30

40

50

60

70

80

90

100 BG EnergyAirtricityFlogasEnergiaVayuElectric Ireland

-

10

20

30

40

50

60

70 BG Energy

Airtricity

Flogas

Energia

Vayu

Electric Ireland

Figure 5.18 Gas Non-Domestic Disconnections Figure 5.19 Gas Non Domestic

by Suppliers Disconnections /10,000 Customers

45

2011 BG Energy Airtricity Flogas Energia Vayu Electric Ireland

Jan-11 18 0 0 2 0 0

Feb-11 25 0 0 9 0 0

Mar-11 55 0 1 23 0 0

Apr-11 70 0 3 13 0 0

May-11 93 0 1 23 0 0

Jun-11 37 1 1 10 0 0

Jul-11 52 0 3 11 0 0

Aug-11 37 0 8 10 0 0

Sep-11 54 2 5 14 0 0

Oct-11 34 1 1 10 0 0

Nov-11 38 3 8 8 0 0

Dec-11 24 0 0 3 0 0

Jan-12 34 0 2 7 0 0

Feb-12 47 1 7 7 0 0

Mar-12 44 1 7 7 0 0

Table 5.11 Non-Domestic Gas Disconnections by Supplier

2011 BG Energy Airtricity Flogas Energia Vayu Electric Ireland

Jan-11 12.14 - - 3.74 - -

Feb-11 17.08 - - 16.95 - -

Mar-11 38.16 - 2.82 43.59 - -

Apr-11 49.24 - 7.90 24.97 - -

May-11 66.46 - 2.46 44.41 - -

Jun-11 26.80 11.98 2.31 19.59 - -

Jul-11 38.15 - 6.64 21.73 - -

Aug-11 27.37 - 17.10 19.72 - -

Sep-11 40.24 22.96 10.32 27.64 - -

Oct-11 25.37 11.30 2.02 19.92 - -

Nov-11 28.45 31.98 15.84 16.08 - -

Dec-11 17.99 - - 6.04 - -

Jan-12 25.53 - 3.86 14.16 - -

Feb-12 35.61 8.83 13.42 14.49 - -

Mar-12 33.58 7.86 13.14 14.80 - -

Table 5.12 Non-Domestic Gas Disconnections per 10,000 customers by Supplier

Overall, over the period examined, the average monthly number of domestic gas disconnections per 10,000 customers is approximately 8, while for non domestic customers is just over 21 per 10,000. This equates to an annual disconnection rate of 0.98% for domestic customers and 2.5% for non-domestic customers.

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5.4.3 Gas Estimation of Vacant Premises As with electricity, it is important to note that a proportion of the total number of disconnections may represent vacant properties. The CER has received data from BGN on the number of disconnected premises (CLs and DMs) that have been reconnected from January to December 2011 and separately from January to March 2012. For January to March 2012, this data only takes into account sites that were both locked and unlocked within the 3-month period. It is not looking at sites that were locked last year and unlocked within the first 3 months of 2012. This data suggests that approximately 67% of domestic disconnections have not been reconnected over this period January to March 2012. For business customers this equivalent figure is over 68%. This data is set out in figures 5.20 and 5.21 below.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 Average

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 Average

Figure 5.20 Vacant premises Proxy – Domestic Figure 5.21 Vacant premises Proxy non- Domestic

These figures are much higher than the estimate used for electricity, and may represent an over-estimate of the number of vacant premises that are part of the total disconnections. Figure 5.21 below shows the gas disconnections figures adjusted for an average 55% vacant premises rate. PAYG meters have been operation in the gas market since 2008 and as a result there are far more in use. The dashed line shows the combined PAYG and disconnections today, indicating the possible level of disconnection if PAYG meters were not available.

47

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

% Gas Domestic Disconnections less Vacant premises % PAYG Installs PAYG +Disconnections

Figure 5.22 % of domestic gas customers disconnected (adjusted for vacant premises) Jan

10- Mar 12 and PAYG impact.

5.5 Summary

Disconnection figures are up on the same quarter last year in gas & electricity, although further data for April and May show that this trend reverses in Q2. Q1 2011 figures were lower because of very cold winter stretching into Q1, winter 2011/12 was very mild by comparison. There were 5,063 electricity and 1,706 gas disconnections for reason of non-payment in Q1 2012. Proxy data from the DSOs indicates that a significant number of these disconnections relate to vacant premises, where no customer is in residence; ~ 30% of electricity disconnections relate to vacant premises, ~58% in gas (less reliable due to seasonal effect.) When adjusted for supplier market shares in Q1 2012, Airtricity has completed the highest number of domestic and business customer disconnections in electricity, Bord Gáis Energy has completed the highest number gas domestic and business customer disconnections. The difficult economic climate has led to an increase of customer arrears and debt within the industry. However the disconnection of a customer’s energy supply should always be the last resort and all suppliers are required to offer a payment plan or prepayment solution to customers in advance of proceeding to disconnect. The CER is actively working with suppliers to understand what proactive measures suppliers are adopting to reduce the number of customer disconnections; including early engagement, increasing the number of customer contacts and the installation of PAYG meters, which is having a positive impact.

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The CER audits suppliers to ensure that the Codes of Practice which deal with customer disconnection and prepayment are being complied with but notes that it is vital that customer’s faced with utility arrears engage with their supplier regarding payment plans and PAYG meters to avoid disconnection.

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6.0 Next Steps The CER will continue to monitor the retail markets in 2012. The next report covering market data for Q2 2012 will be published at the end of Q3 2012.

Reporting Period Publication Date

Q2 2012 End Q3 2012

Q3 2012 End Q4 2012

Q4 2012 End Q1 2013

Electricity & Gas Retail Markets Report Q1 2012This report for Q1 2012 contains information on the...

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