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1

CER SME Electricity Market

Survey Results 2016Prepared for:

Prepared by:

May/June 2016

&

2

Background

● Survey conducted between 27th April – 26th May 2016.

Total of 400 interviews completed

● Survey data collection methodology was Computer Assisted Telephone Interviewing (CATI)

Survey length of approximately 25 minutes

● Respondents were decision makers for electricity supply related issues within the organisation

Included both private sector and public sector, government organisations and sole traders

● The final respondent set is broadly representative of the SME sector with fewer than 250 employees in Ireland.

3

What to look out for in this presentation

● Emerging but small improvement in engagement.

● Price knowledge remains low but improved sentiment on price

● Perception of service has improved

● Evidence of migration to electronic channels for bill receipt

● Arrears low and unchanged

● Continued high levels of dissatisfaction with aspects of competition

● Steady activity by suppliers for new customer acquisition

● Awareness of competitors offers remain focused on those with a unit price discount

● Offer complexity remains an issue with continued declines in ease of comparison of offers

● Reported decline in switching levels and an increase in inertia, but also increase in changing package from existing supplier

● Switching process is not a barrier and perception of expectations of switching being realised have strongly improved

● Relative muted level of bill understanding reported

● Evidence of openness to information sharing through smart meters

4

Respondent profile(Base: All SMEs – 400)

● Population of respondents is representative of business sizes across the SME market

● Within electricity the increase in proportion of respondents from service activities in 2015 has continued, while representation from wholesale/retail trade and construction has declined.

● 16% of respondents claimed that their annual usage of electricity is greater than 500 megawatts – identical to 2015 levels.

Number of employees

2014 2015 2016

Dublin 24% 26% 30%

Other major city 11% 16% 14%

Other city 2% 4% 6%

Major town/town 33% 32% 25%

Village 10% 7% 12%

Rural (outside village) 21% 15% 14%

0-5 6-50 51-100 101-250

69%

28%

2% 1%

59%

35%

2% 3%

61%

36%

2% 1%

67%

30%

2% 1%

2013

2014

2015

2016

Company location

NACE 2013 2014 2015 2016

Agriculture, forestry and fishing 4% 2% 4% 7%

Industry Mining and quarrying

Manufacturing5% 5% - -

Construction 9% 11% 12% 8%

Wholesale and retail trade; repair of

motor vehicles and motorcycles20% 23% 24% 12%

Business and Professional Services 19% 18% 19% 22%

Public administration and defence;

social security, Education Human

health and social work activities

14% 10% 4% 8%

Other Transportation and storage 4% 5% 3% 3%

Accommodation and food service

activities Leisure hotels Arts,

entertainment and recreation

8% 16% 9% 10%

Other service activities 15% 10% 22% 27%

Activities of extra territorial

organisations and bodies4% - 1% 1%

5

Respondent profile(Base: All SMEs – 400)

● As in previous years, respondents sought to complete the survey were those responsible for electricity supply related issues. Within SME organisations, this responsibility predominantly falls under the supervision of the Managing Director or Company Owner.

● This is broadly in line with previous findings.

Respondent Other/Shared

Nobody

Paying the bill 86% 13% 3%

Monitoring the level of usage 86% 8% 8%

Reducing the size of the bill 90% 9% 4%

Deciding on the tariff that suits your organisation

87% 13% 4%

Making changes to your account

92% 11% 1%

Billing details, payment methods etc

89% 12% 1%

Deciding on which energy supplier will be used

89% 16% 2%

6%

11%

8%

2%

26%

10%8%

29%

4%

13%

5%

0%

27%

12%

8%

21%

7%

16%

4%2%

22%

11%11%

20%

Accounta

nt

Fin

ancia

l

manager/

directo

r

Opera

tions m

anager

Main

tenance m

anager

Managin

g d

irecto

r

Offic

e M

anager

Adm

inis

trato

r

Ow

ner

2014 2015 2016

Role of Respondent

6Caution: small base

Incidence of having Natural Gas in business & gas provider(Base: All SMEs – 400)

● 18% of SME also use natural gas in their business, up just 2% on 2015 levels. BordGais Energy continues to be the main gas provider, however Energia has now past Flogas as the second most popular SME gas provider (+8%pts vs 2015).

18%

82%

Do you also use Natural Gas in your business?

Yes

No

Gas Provider(All who have natural gas – 64)

38

21

12

9

5

5

11

Bord Gais Energy

Energia

Flogas

Electric Ireland

SSE Airtricity

Vayu

Other

%

Q.110a Do you also use Natural Gas in your business?Q.4100 Who is your current supplier?

2015

(38%)

(13%)

(24%)

(2%)

(4%)

(0%)

(17%)

(16%)

(84%)

( ) = 2015 data

7

Expenditure on electricity(Base: All SMEs – 400)

Annual expenditure on electricity (€)

● Average expenditure on electricity as a percentage of non-wage costs remains consistent at 10%.

● 51% of respondents provided an answer to this question (55% in 2015) indicating the comparative low knowledge of company electricity usage is still evident.

● Average annual expenditure has returned to 2013 levels and is now at €14,068 (€12,404: 2015 €15,055: 2014 and €14,119 in 2013)

86% of respondents provided an answer to this question (90% in 2015)

• Only 28% of SMEs attempted to answer the price per unit of electricity question. Similarly only 31% attempted to estimate the standing charge on their bill.

Expenditure on electricity (% of non-wage costs)

1%-5% 6%-9% 10%-14% >14%

32%

4%

19%17%

53%

7%

19% 21%

57%

5%

22%

16%

60%

5%

16%19%

2013 2014 2015 2016

<1,500 1,500-2,500 2,500-5,000 5,000-10,000 10,000+

28%

32%

4%

19%17%

20%

23%22%

12%

23%23%

20% 19%

15%

23%25%

21% 21%

13%

19%

2013 2014 2015 2016

% of non-usage cost Amount spent on electricity annually (€)

(excluding don’t knows)(excluding don’t knows)

Q.405a Approximately what percentage of non wage costs does your organisation spend on electricity?Q.410a What is the total amount that your business spends on electricity annually?

Average expenditure on electricity as % of non wage cost = 10%

Average annual expenditure = €14,068

8

Energy management: Cost and Usage Reviews(Base: All SMEs – 400)

● There has been an increase in the incidence of businesses reviewing cost and usage annually vs 2015. Businesses who claim to never review usage has returned to 2014 levels (-7% pts), while those who claim to never review electricity cost has also declined (-5% pts).

● 14% claim to review cost and 13% claim to review usage at frequencies other than the options noted.

Annually Three Monthly Two monthly Monthly Never

51%

12%10% 9%

13%

52%

9% 7%6%

12%

51%

8%6%

4%

12%

67%

5% 4% 3%7%

2013 2014 2015 2016

Annually Three Monthly Two monthly Monthly Never

49%

13%

7%9%

18%

37%

9% 9% 10%

20%

33%

10%

8%7%

26%

49%

8%6%

5%

19%

2013 2014 2015 2016

Frequency of electricity cost reviews Frequency of electricity usage reviews

Q.430a How often would your organisation review the cost associated with your electricity usage?Q.440a And approximately how often would your organisation review your electricity usage (as distinct from the cost)?

9

Market share: SME electricity suppliers(Base: All SMEs – 400)

● Electric Ireland continues to maintain the largest share of the market, with Energia and SSE Airtricity now holding one-fifth of the market each.

● Satisfaction with service by Supplier has improved across suppliers, with the exception of Electric Ireland which has remained stable. SSE Airtricity has experienced the most significant increase in satisfaction.

Overall SSE Airtricity BGE* Electric

Ireland

Energia

77% 76%79% 77% 78%

70% 69% 67%72% 70%73%

63%

68%

79%

68%

81%

91%

82% 77% 81%

2013 2014 2015 2016

Market Share Satisfaction with service by Supplier

9

49%

10%

19%

21%

1% 0%

* Caution: Small base

Electric IrelandBGE

SSE Airtricity

Energia

Vayu

Q.4010a Who is your current supplier?

Other

10

Bill Delivery and Frequency(Base: All SMEs – 400)

● Some increase in receipt of bills via online channels, as post declines. Post continues to be the main method of delivery however.

● Two monthly billing is becoming increasingly more common (+4% pts).

SSE Airtricity BGE Electric Ireland Energia

49%63%

74% 70%

45%29%

23% 30%

24% 14% 10%21%

Post Email Website

Bill delivery channel

2013 2014 2015 2016

71%76% 74%

67%

24% 23%25%

30%

4%

13% 11%16%

Post Email Website

Bill delivery channel – by Supplier

Bill Frequency

2013 2014 2015 2016

Monthly 45% 43% 37% 33%

Two Monthly 52% 54% 59% 63%

Quarterly 2% 2% 1% 2%

Other 1% 2% 2% 1%

Q.1010a And do you receive a printed bill in the post or do you receive it by email or view it on a website?

SSE Airtricity sends the largest proportion of bills via online channels.

1111

Awareness of when current electricity supply contract expires(Base: All SMEs – 400)

44%

56%

Do you know the month & year when yourorganisation’s current contract with your

supplier is up?

Yes No

● Over half of SMEs (56%) do not know the month and year when their current electricity contract is due to expire.

● Amongst those who are aware of when their current electricity contract will expire, Energiacustomers show the highest awareness.


No

Yes

Energia SSE Airtricity Bord Gais

Energy

Electric

Ireland

80%

47% 47%

31%

% Yes aware x Supplier

Question added 2016

1212

Perceptions of price change over time(Base: All SMEs – 400)

16 2111 9

2527

3145

44 31 43

38

1521

15 8

Increased Decreased Same Don't Know

Price Change x Supplier

Electric Ireland

Bord Gais* SSE Airtricity Energia

% % % %

● There has been an increase in SMEs who perceive that the price charged by their supplier has decreased in the past 12 months.

● Energia customers are the most likely to have noticed a decrease in their electricity costs, while Bord Gais and Electric Ireland are the most likely to have noticed an increase.


15%

30%

41%

15%

Has the price charged by your supplier changed in the last year?

Increased Decreased The Same Don’t know

(11%)(27%)

(41%)

(20%)

( ) = 2015

Increased

Decreased

The same

Don’t know


Agree with statement

2015 2016

The cost of electricity is a significant business challenge for my business

50% 45%

The cost of electricity puts my business at a competitive disadvantage to businesses based in other EU countries.

37% 27%

Impact of electricity cost on business and competition(Base: All SMEs - 400)

● As businesses find that electricity prices across suppliers have remained the same or decreased over the last 12 months, electricity costs have become less of an issue for their businesses.

The incidence of SMEs who claim that the cost of electricity is a significant challenge for their business has declined by -5% pts vs 2015.

The incidence of those who claim that electricity costs put them at a disadvantage to other EU Businesses has also declined this wave (-10% pts).

14

Payment Record and Arrears(Base: All SMEs – 400)

Stated bill payment record

● The proportion of SMEs who claim to pay their bill on time and in full has remained level with previous levels.

Please note: This rate may reflect a ‘broad’ interpretation of what constitutes arrears and perhaps some reluctance to disclose such sensitive information

2013 2014 2015 2016

95%88% 92% 91%

4%8% 6% 6%

1%3% 2% 2%

Currently in arrears

Sometimes in arrears, but not currently

Paid on time/in full


Disconnection(Base: All SMEs - 400)

● The level of disconnection (apart from maintenance and power outages) remains extremely low at just 1%.

1%

99%

Business disconnected in the last year?

Yes No

(0%)

(100%)

( ) = 2015

16

Awareness of competitors(Base: All SMEs – 400)

● Unprompted awareness has declined across all providers vs 2015 levels, with the exception of Vayu, which stands at just 1%.

● Electric Ireland continues to receive the highest unprompted awareness at 74%, while SSE Airtricity continues to be the second most commonly mentioned brand at 55% (down 5% pts vs 2015).

Unprompted awareness of Electricity Suppliers

74%

47%

55%

34%

1%

Electric

Ireland

(ESB etc)

Bord Gais SSE

Airtricity

Energia Vayu

Supplier Named -Unprompted

2012 2013 2014 2015 2016

Electric Ireland (etc)

79% 79% 85% 84% 74%

Bord Gais 45% 47% 50% 54% 47%

SSE Airtricity 59% 65% 68% 60% 55%

Energia 28% 26% 41% 44% 34%

Vayu 1% 1% 1% 1% 1%


Satisfaction with aspects of competition(Base: All SMEs - 400)

● Satisfaction across competition aspects continues to be higher with current supplier vs other suppliers. However, dissatisfaction is also high.

The number of offers/discounts available

The clarity of offers/Discounts available

The value for money of offers/discounts

Satisfied Dissatisfied

2015

Satisfied Dissatisfied

20% 44%

18% 33%

18% 54%

16% 48%

21% 41%

11% 42%

21%

18%

20%

14%

23%

10%

40%

30%

47%

43%

39%

38%

Own supplier

Other supplier

Own supplier

Other supplier

Own supplier

Other supplier


Awareness that prices are not regulated(Base: All SMEs 400)

● The gradual increase in SME awareness that prices are no longer regulated which has taken place since 2013 has ceased and now remains consistent with 2015 levels at 46%.

● Highest awareness is among Bord Gais customers, while Energia customers show lowest awareness.

Aware of non regulation of price

2013 2014 2015 2016

Aware 36% 37% 49% 46%

Somewhat Aware

11% 14% 10% 9%

Not Aware 53% 49% 41% 45%

SSE Airtricity BGE* Electric Ireland Energia

46% 44% 48%39%

5%21%

7%14%

50%

35%44% 47%

Aware Somewhat Aware Not Aware

Aware of non regulation of price, by Supplier

Q: Are you aware electricity prices charged by suppliers are not regulated which means that suppliers can set their prices at whatever level they choose?

Q6015 Are you aware electricity prices charged by suppliers are not regulated which means that suppliers can set their prices at whatever level they choose?


Awareness of electricity offers (Base: All electricity SMEs - 400)

73

44

39

30 29

21

Unit price of

electricity is

fixed for 12

or 24

months

A %

reduction

on the unit

rate

Receiving

Cashback or

credit to

your

account

after you

change

A %

reduction

on your

entire bill

Membership

of the

suppliers

rewards or

loyalty

scheme

A %

reduction

on the

standing

charge

% Aware

● SMEs claim highest awareness of offers which have a fixed unit price for 12 or 24 months, followed by a percentage reduction on the unit rate. Awareness of other offer types is low.

● Larger companies generally show a higher awareness of offers.

Question added 2016

% aware x business size 0-5 6-50 51+

Offers where the unit price of electricity is fixed for a certain time, usually 12 or 24 months

72% 76% 70%

Offers based on a certain % reduction on the unit rate of electricity

42% 47% 64%

Offers based on receiving Cashback or credit to your account after you change supplier

38% 40% 48%

Offers based on a % reduction on your entire bill

29% 30% 43%

Offers based on your membership of the suppliers rewards or loyalty scheme

29% 27% 41%

Offers based on a % reduction on the standing charge

19% 26% 18%

Q6050a From the following list, please select the types of electricity offers in the market that you are aware of?


21

Incidence of SMEs approached by suppliers with

tailored offers

22%

78%

Yes, approached by supplier

No, not approached by supplier

Specifically tailored offered(Base: All SME – 400)

● 1 in 5 SMEs claim to have been approached by competitor suppliers offering tailored offers – identical to 2015 levels.

Lower unit rate is the main type of offer being given by suppliers, to attract competitor customers.

Type of tailored offer from suppliers

(Base: All approached by a supplier - 93)

29

7

6

5

5

4

3

1

15

Lower unit rate

Lower rate than competitors/current bill

Set rate/fixed prices for the year

Reduced charges/percentage discount (general)

Low rates at night time

Reduced tariffs

Group Scheme

Better terms for initial/start up period

Other

(22%)

(78%)

( ) = 2015

Q.6055 Has any supplier ever approached your organisation with an offer specifically tailored for your organisation?Q.6058 What types of tailored offers has your organisation been offered by suppliers?

%

22

Contact by Suppliers(Base: All SMEs 400)

● The level of contact by competitors with a view to encouraging switching has remained steady at overall level. Contact channel has also remained relatively unchanged.

● Across suppliers however, BGE and Energia appear to be the most proactive in 2016.

57%

43%

Contacted by other supplier with a view to switching in

the past 12 months

Yes

No

Contact Channel

2013 2014 2015 2016

Phone21% 28% 24% 27%

Mail 4% 7% 8% 11%

Business visit

25% 34% 41% 37%

2013 2014 2015 2016

Electric Ireland

48% 57% 50% 48%

Bord Gais 46% 58% 63% 77%

SSE Airtricity 56% 45% 54% 60%

Energia 30% 63% 70% 76%

Contact by Supplier

(57%)

(43%)

( ) = 2015

23

Understanding of offers available(Base: All SMEs 400)

● Similarly to 2015, almost half of SMEs (45%) claim to not be aware of offers available, or have no/small understanding of the offers available.

● Electric Ireland customers claim to have the lowest understanding, while Energia customers claim to be the most aware.

Level of understanding of other offers

2013 2014 2015 2016

Not aware of the offers available

17% 34% 33% 29%

No/Small Understanding

21% 15% 14% 16%

Some understanding

20% 20% 17% 23%

Mostly/Fully understand

42% 31% 37% 31%

Electric Ireland BGE* SSE Airtricity Energia

35%

19%32%

18%

17%

20%

16%

12%

22%

27%19%

27%

27%35% 33%

43%

Not aware of the offers No/Small Understanding

Some understanding Mostly/Fully understand

Level of understanding of offers x current supplier

Q: Thinking about the different offers available from electricity suppliers, please rate your understanding of the offers available.?


24

Ease of comparison of other offers

12%

13%

22%

9%7%

36%

Very difficult Difficult

Neither easy nor difficult Easy

Very easy No comparison attempted

( ) = 2015

Very difficult

Difficult

Neither easy nor difficult

Easy

Very easy

Ease of comparing offers available(Base: All SMEs 400)

● Overall one third of SMEs report that they have not attempted to compare other offers (similar to 2015 levels), confirming the low level of market understanding.

● One in five SMEs are undecided over the ease of comparing offers however, up on 13% in 2015.

Ease of comparison of other offers since 2012

(17%)

(36%) (9%)

(13%)

(13%)(12%)

2012 2013 2014 2015 2016

33%

30%

24% 25%

17%

Ease of comparing offers x business size

0-5 17%

6-50 17%

51+ 18%

No comparison attempted

Ease of comparing has declined as more SMEs rate neither/nor.

25

How many times have you ever switched electricity suppliers?

Electricity Switching experience – level of switching(Base: All SMEs 400)

● As electricity costs have decreased or remained the same, the incidence of ever switching among SMEs has returned to 2014 levels, with one third of SMEs having never switched – rising to 55% among Electric Ireland customers.

● Last 12 months switching has also experienced a decline and returned to 2014 levels. (-8%pts). Among last 12 month switchers, 23% were switch backs to their previous supplier (down -12% pts on 2015).

2013 2014 2015 2016

15%

22%

30%

22%

Switched in last 12 months

Have you switched electricity supplier in the last 12 months?

* Caution small base

2013 2014 2015 2016

15%27% 31% 35%

16%

17%20% 15%

30%

24%20% 16%

39%32% 29% 34%

More than twice Twice Once Never

26

Electricity Switching – Experience with Dual Fuel

● Dual fuel customers continue to show the highest incidence of switching electricity suppliers, vs. those not on duel fuel.

31%

10%20%

39%

How many times have you switched electricity suppliers?

All Electricity Consumers(Base: 400)

All Dual Consumers(Base: 24)

All Non Dual Fuel Consumers(Base: 376)

Never

OnceTwice

More than twice

Never

Once

Twice

More than twice

Never

Once

Twice

More than twice

*Caution: Small base

35%

17%15%

33%34%

16%15%

34%

( ) = 2015

(31%)(29%)

(20%)(20%)

(24%)

(23%)

(34%)

(20%)

(31%) (29%)

(19%)(18%)

28

Electricity - Switching Package/option with existing supplier(Base: All ever switched but not in past 12 months - 188)

● One third of non switchers reported changing their package to avail of discounts (+12%pts vs 2015).

● Over 3 in 4 did not switch package however, with the main reason being that switching would be too time consuming/too much hassle.

35%

65%

For Non switchers - Changed the package with existing supplier – e.g.

for a better discount

Yes No

Why did not change package with existing supplier(Base: All didn’t switch package 122)

( ) = 2015

(23%)

(77%)

28

21

16

8

8

8

5

2

Satisfied with current service/package

Time consuming/too much hassle

Haven't been approached/offered anything

Didn't know I could change

Little benefit to changing/not worth it

Contracted into current package

Current costs reasonable

Didn't want to use direct debit

%

29

Electricity – Switching consideration(Base: All did not switch past 12 months - 314)

Switching consideration:

Considered switching Contacted alternative supplier

43%

28%

40%

27%

37%

28%32%

34%

2013 2014 2015 2016

● 32% of SMEs who have not switched have considered changing electricity suppliers, with 34% having actually contacted competitors.

● Consideration is highest among Energia customers, with least consideration among Electric Ireland’s customers.

Electric

Ireland

BGE* SSE Airtricity Energia*

57%

37%28%

40%

22%

36%

39%

77%

Contacted alternative supplierConsidered alternative supplier

Switching consideration – by supplier?


30

Reaction once you contract ends

Reaction when you contract ends (Base: All SMEs 400)

38

28

12

11

5

4

2

Look around to see if there are better offers available from

other suppliers

Automatically continue on with the supplier irrespective ofwhat tariff is applied

Look at any options/offers my supplier sends and select the

best for me

Contact the supplier to renew/negotiate the tariff/package

you are on

Automatically continue on with the supplier knowing the

default tariff that is charged

Look at any options/offers my supplier sends but just go

with the default tariff that is charged

Switch supplier

%

Q6400 Which of the following best describes how you react once your contract ends with your electricity supplier?

Number of employees

0-5 6-49 50+

229 141 30

% % %

37 40 41

32 22 10

9 16 35

10 12 9

6 4 2

3 4 3

3 1 -

● 2 in 5 SMEs claim to look around to see if there are better offers available when their contract ends. However, 3 in 10 automatically continue on with the supplier irrespective of tariff.

● Some variation noted across business size as smaller companies are more likely to automatically continue on with their supplier, while larger companies will look at the options sent to them.

31

Electricity – Reasons for switching, amongst switchers(Base: All who have switched to new supplier in last 12 months – 63)

● The Top 5 reasons for switching remain unchanged, as the quest for a reduction in costcontinues to be the main rationale behind changing supplier.

● There has been some increase in the incidence of companies claiming that their previous supplier had recently announced a price rise, new suppliers offered a more flexible tariff structure and new supplier offered greater assistance or energy reduction initiatives.

Top 5 reasonsImportant Not Important

2013*2014* 2015 2016 2013*2014* 2015 2016

To achieve a reduction in the total cost of electricity

71% 89% 91% 87% 17% 5% 2% 6%

My business’ bill increased in size because my previous supplier had increased prices

46% 44% 64% 60% 44% 35% 25% 23%

The previous supplier had recently announced a price rise

46% 44% 45% 55% 44% 35% 46% 33%

The new supplier offered a more flexible tariff structure

54% 61% 43% 49% 27% 26% 28% 27%

The new supplier offered greater assistance on energy reduction initiatives

32% 32% 26% 36% 39% 42% 60% 46%

* Caution small base size on 2013/2014 data

32

Electricity – Reasons for switching, amongst switchers(Base: All who have switched to new supplier in last 12 months – 63)

● Additional considerations for switching include customer service issues.

ImportantNot Important

2013* 2014* 2015 2016 2013* 2014* 2015 2016I expected the customer service from the new supplier would be better

27% 37% 16% 27% 46% 28% 53% 43%

My business was not satisfied with the service provided by our former supplier

22% 25% 17% 25% 56% 55% 60% 53%

I was unhappy with the service I have received from my former supplier

15% 26% 22% 20% 66% 53% 56% 62%

To avail of a combined offer for electricity and natural gas

17% 43% 5% 20% 50% 38% 4% 47%

To get more information on electricity usage

22% 20% 11% 20% 51% 53% 67% 57%

I preferred the online billing option from my new supplier

20% 18% 12% 9% 61% 60% 79% 70%

* Caution small base size on 2013/2014 data

35

Understanding of Discount agreement (Base: All switched in past 12 months – 86)

Price Guarantee Period

2013 2014 2015 2016

18%12% 8% 4%

5%

1%2% 1%

8%

4%3%

2%

2%

1%

0% 0%

36% 67% 77%79%

8%

5%2% 8%

2%

1% 0% 0%21%

9% 9% 6%

No guarantee 3 months

6 months 9 months

1 year 2 years

< 2 years Don’t know

Q: How long does the discount you were offered when you switched last for?

NO restrictions on future switching?

Period of restriction

2015 2016

6 months 1% 0%

1 year 92% 87%

2+ years 6% 11%

Don’t know 2% 2%

2015 2016

26%

18%


Incidence of non-switchers being offered or considering competitor offers/discounts(Base: Non switchers: 314)

● One quarter of SMEs who did not switch were contacted by competitors or considered competitor offers – consistent with 2015 levels.

There has been an increase in the incidence of price guarantees being offered for one year (+7%pts).

25%

75%

Incidence of non-switchers being offered or considering competitor

discounts/offers

Yes

No

Period price guarantees were offered for:(Base: All who considered competitor offer – 80)

2015 2016

No guarantee 7% 5%

3 months 7% 2%

6 months 16% 9%

9 months - 4%

1 year 53% 60%

2 years 3% 5%

More than 2 years - 2%

Don’t know/can’t remember 14% 13%

(24%)

(76%)

( ) = 2015

39

Electricity – Non Switchers – reasons for not switching(Base: All who have not switched in past 12 months – 314)

Non-Switchers

58%

43%

42%

38%

38%

35%

33%

26%

22%

19%

18%

16%

16%

15%

13%

12%

12%

8%

8%

5%

We are satisfied with the service that we receive from our current supplier

We do not believe that the level of discount is sufficient to justify switching

We do not believe that the prices will stay as low as the alternative suppliers claim

Other priorities have meant that this has not been considered

We do not believe that the prices will be as low as the alternative suppliers claim

We are concerned about whether the alternative supplier will be as responsive if there is a power outage

We are concerned about whether the alternative supplier will provide a reliable supply of electricity

We are concerned that the alternative suppliers may not stay in the electricity market for long

We are not able to switch because of the contract with our current supplier

The offers from the other suppliers are too complex

We would be charged a penalty and the saving to be made with a new supplier would not cover this penalty.

The prices of the offers were not clear

Other Bills are a priority

The terms and conditions of the offers were not clear

The terms of the available contracts were too long

We would have had to pay a large deposit

I did not know I could switch

We do not believe that we are able to switch because of arrears on the business’ account

We do not want a new supplier to ask about our current supplier if there were arrears on the business’ account

It is not possible for my business to switch due to outstanding arrears on our business’ electricity account

All who never switched &

never considered switching Base: 106

All who never switched but considered switching Base: 20

70 45

53 37

50 62

43 40

48 45

52 53

44 52

39 31

15 21

23 20

13 19

20 4

19 15

13 25

9 21

15 21

14 -

12 12

10 -

5 4

Non switchers who never considered switching rate satisfaction with service as their main reason for not switching, while non switchers who considered switching's main reason for not churning was due to not believing that the prices will stay as low as the alternative suppliers claim.

40

Rating the overall experience of switching

Experience of switching process(Base: All switched in past 12 months - 86)

• The overall ease of switching remains relatively consistent with 9 in 10 switchers stating that it was easy or very easy.

Energia and SSE Airtricity customers reported the highest ease of switching levels, albeit small base sizes.

Of those who found it difficult to switch the main reason was that it was due to having to give Direct Debit details.

• Of those who switched, 7% indicated that they were required to pay a deposit (+3%pts vs 2015).

Rating the overall experience of switching by Supplier

2% 4% 1% 1%7% 3%

3% 5%

5%4%

5% 4%

33%

15% 18% 13%

52%

72% 73% 77%

2013 2014 2015 2016

Very Easy

Quite Easy

Neither easy nor

difficult

Quite difficult

Very difficult

0% 0%5%

0%

16%

0%0% 4%

0%

15% 5% 0%

18%

32%

6%9%

67%

53%

84% 87%

ESB/ElectricIreland*

Bord Gais* SSE Airtricity* Energia*

Very Easy

Quite Easy

Neither easy nor

difficult

Quite difficult

Very difficult


41

Rating the overall experience of switching

Impact of switching process among switchers(Base: All who have switched & received a bill – 81)

• Positive impact of the switching process is evident as there have been improvements noted across all three aspects this wave; in the bill being reduced by the expected amount, satisfactory service & understanding of terms and conditions.

2013 2014 2015 2016Agree Disagree Agree Disagree Agree Disagree Agree Disagree

My business’ bill was reduced by the amount I expected

67% 15% 61% 30% 68% 6% 81% 10%

The service from my new supplier was satisfactory

80% 2% 78% 6% 80% 2% 89% 4%

We understood the terms and conditions of the offer the business had signed up for

83% 4% 81% 5% 79% 8% 92% 1%


43

Dual Fuel• 64 SMEs have gas, of these 38% were dual fuel customers, this compares to 34% in 2015.

• Benefits for switching to a single supplier for gas and electricity include both saving and convenience considerations, with service aspects continuing to rank lower.

Factor in the decision to change to a single supplier for dual fuel

(Base: All dual fuel – 24)

BenefitNot at all a

benefit

The greater reduction in gas prices offered when you also used the same supplier for electricity

58% 12%

The greater reduction in electricity prices offered when your business also used the same supplier for gas

54% 19%

The convenience of having a single supplier for both

51% 19%

The greater saving overall 51% 19%

Aspects of the service provided by your supplier - for both electricity and gas

34% 19%

Factor in the decision not to have a single supplier for dual fuel

(Base: All non-dual fuel – 40)

BenefitNot at all a

benefit

Satisfied with the service provided by our current supplier for each and see no reason to switch

75% 15%

The savings are greater if your business uses two different suppliers

42% 33%

You are concerned about what would happen if your business fell behind on payments for either

29% 60%

Do not want to receive a single bill for both gas and electricity

21% 62%

Have not got around to switching to a single supplier

20% 61%

You do not trust a single supplier to provide both electricity and gas

14% 68%

Caution: Small base size

44

Bill Understanding and impact(Base: All SMEs - 400)

76

76

74

73

61

73

77

73

72

Bill is easy to understand

Bill makes it easy to understand the electricityused

Makes it easy to understand the electricity

charged for

Understand the calculation of the bill

The bill makes it easy to understand the tariff I

am on and to identify all of its components

2016 2015

2016 Current Electricity Supplier

SSE Airtricity

Bord Gais/

Energy

Electric Ireland

Energia

82 48 159 59

70% 65% 81% 75%

75% 63% 78% 79%

71% 65% 74% 79%

73% 55% 76% 70%

65% 51% 59% 70%

%Overall

• Bill understanding overall has remained relatively consistent with 2015.

n/a*

*Question added 2016

Received Bills

By post Online

260 165

75% 76%

76% 78%

73% 75%

70% 76%

60% 65%

45

Element that is unclear

Elements of the bill which are unclear(Base: All SMEs 400)

● Understanding of particular bill elements do not appear to be causing a significant issue. Unit price per kWh is the most unclear element of the bill, higher among Bord Gais Energy Customers.

● SSE Airtricity customers reported that MPRN number and standing charges were the most unclear elements on their bill.

19

16

16

16

Unit price per kilowatt hours (kWh)

Meter reading (KWh used)

MPRN Number

Standing charges

%

Q.11115 Are any of the following elements of the bill unclear to you? SHOW SCREEN

Current Electricity Supplier

SSE Airtricity

Bord Gais/

Energy

Electric Ireland

Energia

82 48 159 59

% % % %

18 24 18 13

14 18 15 17

22 15 14 10

21 11 13 18

*Question added 2016

Received Bills

By post Online

260 165

% %

18 20

16 17

15 13

15 17

46

Smart Metering (Base: All SMEs 400)

Smart Meters are the next generation of energy meter. They will replace the traditional electricity and gas meters removing the need for an office visit to read the meter. This will eliminate the need to use estimates whenever a meter cannot be read.

Smart meters work by communicating with you and your energy provider giving a detailed view of actual energy usage throughout the day and night. This provision of actual consumption information delivers benefits such as;

Providing businesses with a mechanism to reduce their electricity bill by enabling the business to shift some of their electricity usage away from (more expensive) peak consumption times;

Informing businesses of their actual usage in electricity and gas therefore allowing them to avoid unnecessary consumption and cost; and

Helping the environment through reducing overall energy production.

● SMEs were asked their opinion on smart metering. The following information was read out to respondents before being asked a series of questions:

89%94%

88% 87%95%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Overall SSE

Airtricity

Bord Gais

energy

Electric

Ireland

Energia

Q. Would you be willing to share the information collected on the smart meter with your supplier?

Openness to share information with suppliers in order to avail of new tariffs and services is evident.

47

80%89% 84%

94%

0%

20%

40%

60%

80%

100%

SSE

Airtricity

Bord Gais

energy

Electric

Ireland

Energia

91% 93% 96%89% 88%

0%

20%

40%

60%

80%

100%

Overall SSE

Airtricity

Bord Gais

energy

Electric

Ireland

Energia

Q2000 Would you be willing to ….

Smart Metering (Base: All SMEs 400)

Q. Would you continue to use an in-office device to assist in managing your costs?

(Base: all would find info helpful – 348)

Q. In office display devices can provide you with both up to date and historical information on your energy consumption. Would you find this type of information helpful in managing your organisations energy consumption?

● Reactions to smart metering are positive across SME electricity customers.

86%

14%

YesNo

Overall

High agreement.

48

Bill Frequency(Base: All SMEs - 400)

My business would prefer to receive bills more frequently

56%

11%

17%

6%10%

Strongly disagree Disagree Neutral

Agree Strongly agree

Business would prefer to receive bills more

frequently– by Supplier

Electric

Ireland

BGE* SSE Airtricity Energia

65% 70%63%

73%

16%

19%

21%

15%

18%11%

16% 13%

Disagree Neutral Agree


( ) = 2015

(12%)

(4%)

(18%)

(9%)

(56%)Strongly disagree

Disagree

Neutral

Agree

Strongly agree

● Appetite for bill frequency remains consistent with 2015 levels.

49

Experience and knowledge of Complaint process(Base: All SMEs - 400)

● Just 5% of SME respondents have complained within the last 12 months vs 8% in 2015.

● Awareness of being able to complain to the CER is now at 72% vs 77% in 2015.

Proportion of respondents who complained over last year

2013 2014 2015 2016

5%

10%

8%

5%72%

28%

Aware that you can complain to CER?Base: All SMEs – 400)

YesNo

2015-Yes: 77%

Summary & Key Points

51

Summary and Key points (1)

● Knowledge of electricity consumption by SME’s continues to be low but there are marginal emerging changes in usage monitoring.

Continued low level of knowledge of energy usage and associated cost in the SME sector.

Frequency of review of usage and cost has reduced to once a year, while close to fifth of SME’s never review usage and 7% never review cost – however these latter metrics are declining.

44% are aware of when their current contract is due to expire.

● Perception of service has improved to 81% satisfied, with SMEs reporting improved experience across all suppliers, notwithstanding the wide range of experience.

SSE Airtricity is highest at 91% and Electric Ireland lowest at 77% satisfaction.

● Improved sentiment on price

The increase in satisfaction is almost certainly related to improved perception of price

The proportion of respondents who believe the price has decreased has gone from 20% to 30% and the proportion who believe it has increased has almost halved.

The incidence of those who claim that electricity costs put them at a disadvantage to other EU Businesses has also declined by 10% pts.

52


● There is evidence of migration to electronic channels for bill receipt, with post declining for the third consecutive year (to 67%). This is being led by SSE Airtricity and Energia.

● Curiously, awareness of competitors has declined across all suppliers.

Electric Ireland reporting highest awareness at 74%, with SSE Airtricity at 55%.

● Notwithstanding the improved sentiment on price, there are high levels of dissatisfaction with aspects of the market related to competition

45% of SME’s continue to be unaware that prices are no longer regulated, broadly similar across all suppliers.

40%+ are dissatisfied clarity of pricing and discounts, but SME’s affirm their satisfaction with own supplier over competitors.

● Market awareness and engagement remains low

45% of SME’s claim to not be aware of offers available, or have no/small understanding of the offers available (Electric Ireland customers display the lowest, Energia highest).

Offer awareness continues to revolve around those with a fixed unit price for 12 or 24 months, followed by a percentage reduction on the unit rate.

53


Irrespective of competitor activity, 36% of respondents claim that they have not compared the different offers.

Ease of comparison of offers has declined from 33% to 17% between 2012 and 2016

● Competitive market activity has remained steady

57% were contacted by competitors with a view to encouraging switching – showing mixed results with 22% switching in the last 12 months but 34% report never having switched.

Electric Ireland’s customer base remains the most insulated, with 48% reporting having been approached, compared with 60%-77% for other customers.

Decrease of 5% pts among those who considered switching to 32%.

Nevertheless 35% changed package with existing supplier.

● The switching process enables switching amongst those who engage

Ease of switching process is at 90%

Expected outcomes in terms of bill reduction, improved service and understanding of t’s & c’s have increased by between 9% pts and 13% pts.

54


● While broadly consistent with 2015, aspects of bill understanding are muted,

Bill understanding is at 76%, while understanding of calculation is at 73% while ‘bill makes it easy to understand the tariff and to identify all of its components’ is at 71%

Unit price per kWh is the most unclear element of the bill at 19%

● Openness to information sharing through smart meters

89% would be willing to share information collected on the smart meter with their supplier

80% would find IHD consumption type information helpful in managing the organisations energy consumption

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