Mr. Dave Kirwan:

On behalf of Bord Gáis Energy, I thank the joint committee for giving me the opportunity to address it on the issue of energy prices in the context of falling wholesale costs. As an energy company that has operated in this market for over four decades, even prior to the establishment of the Commission for Energy Regulation, we take both our role and our responsibility to customers very seriously. We are always happy to discuss ways in which this market can be made to work better for our customers. That is why in recent times we have actively engaged in the review of energy policy being conducted by the Minister and his Department. Our responses to same have focused in a major way on how the industry can work on behalf of customers.

As we indicated in our submission to the committee, we reduced the cost of our standard unit rates for both gas and electricity on 22 January. We did this having regard to the fall in the cost of wholesale gas during 2014. We announced our decision to reduce prices as soon as we could see that lower wholesale gas prices were giving rise to a reduction in the near and medium-term cost of gas and electricity that we purchase on behalf of our customers. As the energy regulator explained to the committee last week, energy companies such as ours buy forward; therefore, movements in wholesale markets do not translate into immediate price movements - whether up or down - for customers. A significant proportion of the gas our customers used in January 2015 was bought in early 2014. As the cost of wholesale gas continued to decrease into 2015, we have been able to secure a lower cost product for our customers. As a result, we were able to translate this into a discount on our standard unit rates.

We fully understand the perception to the effect that we are quick to pass on increases and slow to share reductions. However, that is not the case. In the past decade, for example, our gas prices were regulated on an annual basis by the Commission for Energy Regulation. Each year we submitted the cost of gas purchased for the previous 12 months and projected the cost of gas for the following 12 months and on that basis the price was set. Increases approved by the regulator during the period were, therefore, made following periods in which the wholesale cost had been rising steadily and were designed to recover against the latter rather than being a move to counter it. Following deregulation on 1 July, we were happy that the first price adjustment we could make in the price of gas involved a reduction. In the case of electricity, we have consistently tried to offer a competitive standard rate since entering the residential market in 2009. Our customers have enjoyed the lowest standard rate for electricity for 46 of the past 49 months. In respect of both gas and electricity and as we confirmed at the time of our price announcement, we will continue to review wholesale costs. If further savings arise, we will pass them on to our customers.

It has taken many years to develop the Bord Gáis Energy brand. I have been proud to work with the company for over 15 years. I can reassure the committee that it is desperately important to us, as an organisation, that our customers can trust us. In 2010 we published the first Bord Gáis Energy index, by means of which we share short and medium-term insights into energy markets with key stakeholders, the media and customers alike. We did this in order that people might be better informed about energy markets and what influenced the price they paid for electricity and gas. We continue to publish this index every month. We remain of the view that transparency in wholesale costs and other factors which have an impact on energy costs is important in order for customers to be confident that we are doing what we can to deliver competitive prices to them.

As members will be aware from last week's discussion with the energy regulator, our energy market is intensely competitive. We are continually obliged to extend ourselves and invest in order to acquire and retain customers. In the 23 years I have worked in the industry I have never before seen the level of choice currently available to customers. That is good and we welcome the competition. None of the energy companies represented at this meeting can be complacent in the context of retaining customers, which is how it should be. The committee and members of the public can rest assured that there is plenty of pressure on us to deliver competitive prices to our customers in order that we might retain them. That is why we reduced prices and will do so again if the opportunity arises.