Homeowners to save up to £107 as Power NI cuts price by 10.3%
Householders can now expect to save an average of £107 on their annual electricity bill compared to two years ago, according to market leader Power NI.
The utility provider announced a 10.3% drop in its domestic tariff this morning, marking the third year running in which it has dropped its prices.
Compared to last year, domestic consumers will see prices drop by around £54 per year and regulated business customers by £200.
Power NI holds the largest market share in both domestic and non-domestic markets.
However, bosses at Power NI said it was expected that its non-domestic business would be deregulated later this year and its domestic business within the next five years if its share of the market continues to drop.
Currently, Power NI supplies 67% of homes in Northern Ireland.
However, those in charge say deregulation may not entirely be bad news for the firm, as it means the company will face fewer restrictions, such as around its pricing.
The changes to the tariff will take effect in April and will be good news for Power NI's 528,000 domestic customers, 24,000 small businesses and 6,500 farm customers.
The company claims the price drop is likely to be the biggest made by an energy supplier this winter and will save customers a combined £40m. Power NI bosses say its price is the lowest in 16 years when inflation is taken into account.
But Power NI hasn't been the only one to drop its prices this winter, as a price war has been long brewing among utility suppliers.
With gas prices falling, electricity prices have followed suit and electric standard tariffs are now as low as 13.39p a kWh.
Changes such as importing liquefied natural gas have revolutionised the market - a supply of gas in excess of demand has prompted electricity prices to fall.
However, despite a 20% drop in gas prices, electric prices have fallen by a relatively modest amount.
New guy on the block, Open Energy is the lowest to date. Last week the newcomer announced it was dropping its tariff, making it currently the cheapest supplier in the region.
Stephen McCully, managing director of Power NI, explained that the Northern Ireland market is more reactive to changes in gas price.
Power NI uses a hedging system to purchase gas ahead of when it needs it.
Stephen McCully said: "There's a slight lag in the UK. This time last year we were hedging ahead, where we weren't able to hedge last year we were able to buy cheaper and some of that has been reflected this year on domestic bills.
"The smaller, newer suppliers do not have other baggage from buying ahead and are able to make prices [reflect that]. We would have already bought some of this year's at last year's prices."
Budget Energy and Electric Ireland have also announced their prices will drop over the next few weeks.
Many of the suppliers also offer discounts for paperless statements, prepayments and direct debit customers.
Open Electric customers also receive an equal share of 30% of net profits between them. Customers can also vote on which charities receive 10% of net profits per year.
Electric Ireland's standard price is 15.56p a kWh, and all customers also receive a £50 sign-up bonus (£30 for keypad customers) and an annual £25 loyalty bonus.
Power NI offers a 6% discount for customers who pay by direct debit and keypad customers for 4.4% as well as a £60 discount for opting for online statements only.
The Consumer Council welcomed the reduction. Head of Energy Richard Williams said: "This is good news for Power NI customers.
"Power NI has been able to adjust its tariffs due to reductions in the wholesale cost of electricity. The Consumer Council would now like to see the other five domestic electricity suppliers in NI follow suit, and at least reflect this reduction within their own prices.
"We strongly encourage all consumers to visit our website to see how they can get the best energy deal. Our price comparison chart shows consumers how they can save money by changing their supplier, or even just their payment method."
Northern Ireland Independent Retail Trade Association Chief Executive Glyn Roberts said: "This is a positive announcement by Power NI which will be welcomed by our members. For too long, the high cost of energy was a significant problem for small traders and it is encouraging that prices are now their lowest since 2004."
"Given that independent retailers are experiencing a perfect storm of costs such as rates, National Living Wage and Auto Enrolment Pensions, this tariff reduction is very timely"
The SDLP chairman of Stormont's Enterprise, Trade and Investment Committee, Patsy McGlone, also welcomed the announcement.
"We have heard time and again that high energy prices are squeezing businesses. Indeed, Michelin highlighted it as one of the reasons they are shutting their doors in Ballymena at the cost of 860 jobs," he said.
"Such a significant cut is therefore very good news that will be welcomed by PowerNI's consumers, both businesses and families alike. I hope that other energy providers will follow this example and endeavour to help their customers make savings on their energy bills."
Utility Regulator chief executive, Jenny Pyper, said the announcement means that Power NI's domestic customers will have among the lowest electricity bills in the UK and Ireland.
"It is one of the biggest decreases to date by any electricity supplier in either the UK or RoI and means that domestic customers will have seen their bills fall by around 19% over the last year," she said.
"The primary reason for the reduction in electricity bills is the continuing fall in international gas prices. Customers of Power NI can be confident that, due to our regulation, costs are thoroughly scrutinised so that their bills reflect the actual costs of supplying electricity to their homes and businesses."