Many customers in the greater Belfast and Larne areas will now be able to choose from two suppliers.
The NI Consumer Council said that with firmus energy now in competition with Phoenix Natural Gas, customers would benefit from lower prices.
Regulator Gas Director Brian McHugh told the BBC: "The announcement is the first stage in a process to open up the domestic gas market in the Greater Belfast area to competition.
"During the initial testing period, the number of customers able to switch will be limited, however this will increase as the systems are tested.
"As part of the phased entry, we have allowed firmus energy to begin by supplying to credit customers only.
"We will continue to work with the energy industry to ensure that systems are in place to allow pay-as-you-go customers to start to switch in early 2011, ensuring that all customers can benefit from competition by September 2011."
The supplier, firmus energy, which already pipes natural gas to homes and businesses in other towns and cities across Northern Ireland, will now start to switch its first domestic gas customers inside the greater Belfast area.
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The move signals firmus energy's intent to provide lower gas prices and improved customer service to all domestic gas customers in greater Belfast in the near future. The option of changing supplier will be limited initially to allow for the testing of the new market switching system.
Mark Prentice, Managing Director for firmus energy explained: "Our extensive research with gas customers in greater Belfast has indicated that households want two key things: lower prices and great customer service.
"Whatever price Phoenix charges over the next two years, firmus energy prices will always be cheaper - we guarantee it.
"This means that customers who switch to us could save up to 11.5% on their gas bills in the first 12 months alone.
"Over two years, this could equate to a saving of over £100 for an average home, which in today's tough economic climate is hugely beneficial for household budgets."
He said that credit customers wishing to switch their gas supply to firmus energy will benefit from cheaper prices for at least two years - 7.5% off Phoenix prices for the first 12 months and 5% discount for the second 12 months.
The offer is based on sign-up to online account management and payment by direct debit.
Coupled with an additional direct debit discount of up to £20.40 per year, the discount means that customers, who are not currently paying by direct debit, could save up to 11.5% on their current gas bills.
"Switching is easy. It only takes five minutes to switch online and it’s the same pipes and the same meter - just cheaper natural gas. There's no disruption to the customer's gas supply and they don't even have to ring their old supplier," he continued.
Today's announcement follows extensive work between firmus energy, stakeholders and the Utility Regulator over the last nine months, culminating in firmus' development of the legal arrangements and switching processes to allow domestic competition to start.
(BMcC/GK)
