Amendments Nos. 1, 4, 6, 13 and 14 are related. Amendments Nos. 4, 6, 13 and 14 are consequential on amendment No. 1. Amendments Nos. 1, 4, 6, 13 and 14 may be discussed together by agreement. Is that agreed? Agreed.
Electricity Costs (Domestic Electricity Accounts) Emergency Measures and Miscellaneous Provisions Bill 2022: Committee and Remaining Stages
SECTION 1
I move amendment No. 1:
1. In page 4, to delete lines 3 to 11, and substitute the following:
“ “non-vacant, non-holiday home domestic electricity account” means an electricity account in respect of which a meter point registration number has been assigned and which—
(a) is held by a final customer with an electricity supplier,
(b) is identified by the distribution system operator as being subject to distribution use of system charges at the rate for urban domestic customers (DG1) or the rate for rural domestic customers (DG2) set out in the publication known as the “ESB Networks Schedule of Distribution Use of System Charges” approved by the Commission and for the time being in place, and
(c) is responsible for more than 500kWh of consumption in the preceding 12 months and more than 80kWh in the preceding 2 months and is therefore neither a vacant property nor a holiday home;”.
I will speak to all the amendments because they are consequential on each other. What we are trying to do here is to address the issue non-vacant homes and non-holiday homes. We tried to address this the last time this measure was being introduced and we were told that it was being done quickly and that it needed to get done and, therefore, any sort of measures we were trying to introduce would delay the roll out of that. We have had months, almost a year, for the Department to find a fairer way of introducing this credit. I am fascinated at the criticism of our energy cap proposal because people have not seen the details of it. It actually capped high usage above a certain amount but people seem to know what they are talking about when they have not even seen the details of what it is they are talking about.
While people have criticised it, I am fascinated at the criticism of our energy cap when they have not even seen the details of it. It did cap high usage. Above a certain amount of usage would have been capped. People seem to know what they are talking about when they have not seen what it is they are talking about.
The purpose of the amendment is to try to exclude vacant homes and holiday homes from receiving the rebate. This is a fair ask when it comes to public money being given to people who have second homes or who are sitting on vacant properties. They should not receive this much-needed credit. This is especially relevant given that we know other members of the community, including the Traveller community, did not even get the first rebate when people sitting on holiday homes did.
The most recent census identified 61,204 holiday homes in the State with a further 166,752 vacant holiday homes, all of which are due to receive €600 under this scheme. During the debates on the original electricity rebate scheme, the Minister said there was not time to make the rebates more targeted. We are still in the same ongoing crisis so I do not believe that this excuse washes any more. The Government has had ample time to figure out how to exclude those homes, and it chose not to do so. The Minister of State has all of the resources within his Department to do that. As members of the Opposition, we are trying to do it and point forward credible proposals given that the CSO has indicated that low-usage households are more likely to be holiday homes.
While medium- and low-income families are put to the pin of their collar trying to keep the light and the heat on, the situation has worsened. There are people whose energy bill makes up a large portion of their income. These are the ones who need the extra help, not the millionaires and billionaires with multiple holiday homes around the country. The measure we are proposing is based on data and rationale from the Central Statistics Office metered electricity consumption, which uses information given to them by the ESB Networks. The CSO found that low electricity consumption can be used as an indirect indicator of vacant and holiday dwellings. Some 10% of residential customers consumed less than 1,000 kWh in 2020, which was well below the median of 3,658 kWh. The figures indicate that 210,000 households have low usage and are likely vacant. Given that the census revealed 228,000 vacant homes and holiday homes, it seems that energy usage is quite an accurate measure of whether a home is being used.
The amendment we put forward also has multiple safeguards. We are aware that there are other reasons people might have low energy usage. It is not beyond the realms of possibility that someone in extreme energy poverty would use less than 1,000 kWh in the last year. To play it safe, our amendment proposes using 500 kWh as the cut-off, which is half of what the CSO proposed using. This is just to be sure we are not excluding those people who might be in extreme energy poverty. To put that into context, 500 kWh is what someone would use if a 60 watt light bulb was left on for one year. He or she would have blown past it. In the remote eventuality that someone is wrongly excluded, we have also proposed a dispute resolution mechanism in amendment No. 6. This measure would exclude 130,266 ESB meters from receiving the rebate, which would mean that €70 million could be saved by the Exchequer. This is €70 million that is not going to go to people with holiday homes or multiple vacant properties.
The Minister of State will probably dismiss these amendments because we are discussing all Stages today and we are railroading this legislation through. It is disingenuous to use the argument about time, this time around. That was the first time when we were in the midst of a crisis and we all wanted to get money into people's pockets very fast. It is now eight months on and it just does not wash. I do not accept that there is no way the Minister of State could exclude vacant homes and holiday homes from this credit. We know they are the people who do not need it and we need to be using what resources we have available, in the context of the Exchequer, for those who do. I look forward to hearing the reasons the Minister of State is going to oppose it.
These are good amendments. It is interesting that in the amendments there is a recognition of some of the nuance on this issue. As I mentioned previously, a decision was made in May this year, which was when the energy crisis was well flagged and very much under way. There was a clear understanding that by May energy companies were making large profits and were not struggling in any sense for profits in that area. The decision was made to remove the low rate standing charge. The low rate low-usage standing charge was a measure we already had. It was not something we needed to invent or add in. We had a measure whereby energy companies had a standing charge and a low-rate standing charge, which the companies were required for low energy users. Of course, there are two or three different reasons someone can be a low-energy user. One reason is the example given of those who are in extreme energy poverty and who are using a dangerously low amount of electricity. The other reason is the example given, as I have said, by the representative of the CRU when she spoke to the Oireachtas committee, which was the A-rated home or the house that has its own solar energy that only occasionally uses supplementary energy from the grid. A third reason, which may well relate to a majority of those in the low usage category, is a holiday home or a vacant property. In removing the low-use standing charge rate in May, there was no nuance from the Government around how to ensure we are not impacting on those who have particularly low use because of situations of poverty or those who have particularly low usage because they are doing their best to be as energy efficient as possible. The argument given for removing the low-use rate was holiday homes. The argument given by the Government was that there was a low-use rate being charged to holiday homes and vacant homes. It should be borne in mind that there was no public money involved at that point or no requirement for public money, but in that decision, effectively it was decided that electricity companies could now charge a much larger amount to all of this cohort, which included some holiday homes and vacant homes, and to the other two cohorts. The Sinn Féin amendment is a much more nuanced approach. This is what is striking about it. On the one hand the Government is very happy to have all of those persons pay more to the electricity companies without bothering to tease out exactly who will benefit or be impacted but, on the other, when it comes to public money the supplement will be given to all of those vacant properties and holiday homes. The bill for vacant properties and holiday homes has increased as has the amount the companies are getting, and now they will also be given an extra subsidy on that. Why would the Government remove a price suppression mechanism that did not involve such properties, only to then subsidise the new increased prices with large amounts of public money going directly to the cohort for whom we said prices should not be increased because they should not get any benefit? It is a contradictory approach.
As well as the CSO figures on low usage, other measures could probably be used, for example those who have paid the charge in the context of holiday homes, which we have a measure of, and those who have self-declared vacancy, which was part of the latest round of Revenue self-declaration from just one and half years ago. I recall the Minister for Finance inserting a self-declaration of vacancy. I believe that it is an underestimation of vacancy but other mechanisms can be used on those. At least the Sinn Féin measure does capture a large cohort of vacant properties and holiday homes. Sinn Féin have gone to the trouble of including a dispute resolution mechanism, which would ensure that we did not indirectly negatively impact either those in energy poverty or those with very high levels of energy efficiency. This is what is very good about the suite of amendments put forward by the party when taken as a whole. They have recognised that there is a blanket issue of holiday homes and vacant homes, but there are also these nuances.
I regret that the Government did not apply the same level of thought or nuance. It has effectively allowed bills to be increased in May, in an entirely avoidable way, only to put huge amounts of public money towards supplementing them now. I also regret that there is no nuance because we want to encourage those who are very low energy users and we absolutely want to make sure that we do not have those who are low energy users in poverty and missing out. I would like if that same level of nuance had been reflected in the Government's approach. Perhaps the Government might consider the Sinn Féin amendments, particularly amendment No. 6, which represent a nuanced approach.
I thank Senators for tabling these amendments and I take them in the spirit in which they are intended. Each of these amendments proposes to amend the Bill to include wording around non-vacant and non-holiday homes. The scheme being established is going to use the MPRN to identify all domestic electricity accounts to ensure that payments are made directly and automatically without means testing, application or approval. The first scheme successfully credited 2.1 million domestic accounts, or 99.3% of all eligible accounts, including pay-as-you-go meters, through April, May and June of this year. That was done automatically at a cost of about €377 million.
As to holiday homes, using the electricity bill infrastructure it is not possible to determine whether individual premises are used for purposes other than as a principal private residence. The scheme does not have additional eligibility criteria so, for example, it is not means tested, as the application of such criteria would override the automatic nature of the current scheme. It would be cumbersome for customers, by requiring formal application and it would delay the automatic crediting of customer accounts, which is due to begin on 1 November 2022. While I understand that there are over 60,000 holiday homes that were reported as unoccupied in the preliminary CSO census results for 2022, of course it is not possible to know their usage or occupancy on an ongoing basis or to identify them in the MPRN system. Obviously, the census data is confidential and private and we cannot link back to that. However, as per the mechanisms of the scheme, once these properties possess an active MPRN, a credit will be applied and while this cannot be avoided, it is offset by the fact that 2.2 million domestic accounts will receive the credit automatically.
There is a balance or a trade off here. When we have a universal measure, it reaches everybody, including those who do not need it. When we have a targeted measure, it only reaches a particular subset of people, although in a larger and more substantial way, but there are people who really deserve it that get missed by the targeted payment. People then advocate for those people. That is the reason we are applying a set of universal measures and a set of targeted measures. We have three universal measures and eight targeted measures totalling €2.5 billion.
I recognise that there is a real attempt here, using energy usage over two months and over 12 months, to try to identify what constitutes a vacant property. I also know that statistically, this was the approach taken by the census. They were trying to find some kind of proxy or approximate measurement of which homes are vacant. I can see that some effort and thought has gone into that in these amendments but, unfortunately, it would create classes of people who do not qualify but who ought to qualify. The proposal is to set consumption limits as an identifier of eligibility. However, the amendment does not take into account individual circumstances. If, for example, a person is hospitalised over a period of time, he or she will have lower levels of consumption and could be excluded. Let us take the example of a new local authority tenant who moves into a home. Typically those properties take a long time to be refurbished. They can be void for a period of time while a deep renovation is carried out, following a long-term tenancy. Again, the property will have a very long period of non-use of energy and the tenant may not qualify as a result. Another example would be people who move home. If they move into a house that was vacant when it was for sale, they will not qualify for the energy credit.
There is a mechanism provided for in the amendment whereby a person can apply for the credit and take a dispute resolution case explaining why he or she ought to get it but that moves away from the automatic nature of the scheme which ensures that everybody gets a payment during November and December. Unfortunately, it undermines the idea that everybody will get something, while those who are being targeted on the basis of their welfare status or low income will get extra payments.
Amendment No. 6 provides that the Minister will establish a dispute resolution mechanism. I will not be accepting that proposal. The CRU already provides a free and independent dispute resolution service. This service is available to all utility customers that have an unresolved dispute with their provider and on this basis, I propose to reject these amendments.
Is the amendment being pressed?
Yes. The Minister of State's response is deeply disappointing. Senator Higgins has made a very strong argument in favour of our amendments. On the one hand we are using low usage as a metric in the context of a low-usage charge but at the same time, it is not a good enough metric when it comes to trying to exclude people who have means and are clearly not in urgent need of this measure. That is deeply disappointing.
Amendment No. 6 covers the hypothetical circumstances to which the Minister of State referred, including where people move into a property that was vacant for a while and have low usage as a result. Such people are protected by the proposed resolution mechanism. The Minister of State is being overly cautious in not accepting these amendments. He says that the Government is trying not to exclude anybody who might fall into the net but we have already allowed for that with a very low 500 kW per hour threshold and the dispute resolution mechanism. However, the same approach was not applied by the Government when it came to a single MPRN for halting sites. Halting sites were excluded and have not received a retrospective payment, eight months later. There does not seem to be the same attitude taken to the "What about?" arguments and all of the nuances that exist.
It is disappointing that the Minister of State is not going to accept our amendments and that the Government is prepared to stand over the fact that householders who do not need this payment, who have multiple properties and are sitting on vacant properties in the middle of a housing crisis, are going to benefit from the electricity credit scheme.
Amendment put:
The Committee divided: Tá, 9; Níl, 13.
Tá
- Boylan, Lynn.
- Higgins, Alice-Mary.
- Hoey, Annie.
- Keogan, Sharon.
- Moynihan, Rebecca.
- Ó Donnghaile, Niall.
- Sherlock, Marie.
- Wall, Mark.
- Warfield, Fintan.
Níl
- Carrigy, Micheál.
- Casey, Pat.
- Cassells, Shane.
- Currie, Emer.
- Daly, Paul.
- Doherty, Regina.
- Dooley, Timmy.
- Gallagher, Robbie.
- Kyne, Seán.
- Martin, Vincent P.
- McGreehan, Erin.
- Murphy, Eugene.
- O'Reilly, Pauline.
Tellers: Tá, Senators Lynn Boylan and Niall Ó Donnghaile; Níl, Senators Seán Kyne and Robbie Gallagher.
Amendment declared lost.
Amendment No. 2 is in the names of Senators Sherlock, Hoey, Moynihan and Wall. Amendments Nos. 2, 3 and 7 are related and may be discussed together, by agreement. Is that agreed? Agreed.
I move amendment No. 2:
In page 4, line 16, after “customer” ”, to insert “, subject to subsection (2),”.
I will speak to amendments Nos. 3 and 7. Amendment No. 2 obviously relates to amendment No. 3.
Amendment No. 3 refers to the whole issue of the non-principal private residence and where, in effect, an individual can be a final customer in two or more places. The Minister of State spoke earlier about this being a universal payment that goes to everybody. I do not propose to get into a philosophical argument about the concept of a person and a body. What is happening here, however, is that we will have a double payment to a considerable number of bodies or households by virtue of the fact that they have two or more homes.
As has been already articulated, that needs to change, particularly with regard to amendment No. 1. As has been said already, it is most disappointing that for all the months we have known now that some sort of intervention was going to have to take place during wintertime, no effort has been made by the Government to ensure a targeting of this payment to the principal private residence only and not to vacant or holiday homes. That is amendment No. 3.
Amendment No. 7 refers to the issue whereby the bill is effectively paid by somebody other than the occupants of the dwelling. We know of many instances whereby an arrangement is with the landlord. The landlord effectively pays the utility bill and the utility bills are incorporated into the rent paid by the tenant to the landlord or, indeed, an additional payment is made. Due to the nature of the payment, it will go to the person who holds the MPRN as opposed to the actual occupant. We ask that a change be made and that this amendment be incorporated into the Bill to ensure the occupants, that is, those incurring the costs of higher electricity this winter, will actually be in receipt of it. It is also really important that a dispute resolution is incorporated into the Bill so that when a dispute arises between a tenant and landlord, they can go to the Residential Tenancies Board, RTB.
We know that not all renters will receive the electricity credit, in the first instance, because they are not the payer of the bill, but also because they are in a licence agreement outside the terms of the RTB. Therefore, we need to see provisions to ensure this credit goes to the occupants and not just to the payers of the bill.
I thank Senator Sherlock. The intention of these amendments is to target the payments towards the person using the electricity and to cover tenancy agreements that perhaps include the cost of the electricity in the rent. For operational reasons, the scheme can only credit the domestic electricity account.
The scheme will apply to domestic electricity accounts using their unique MPRN to allow the payment to be credited to individual bills automatically without the need for application or approval. Using electricity bill infrastructure, it is not possible to determine whether individual premises are used for purposes other than the principal private residence. While the Department of the Environment, Climate and Communications and Department of Housing, Local Government and Heritage have engaged on this matter, the scheme can only credit the domestic electricity account.
The majority of the approximately 300,000 tenants who are registered with the RTB are domestic electricity account holders. Others would have tenancy agreements where tenants pay their actual share of each bill and, in those cases, will benefit from the payment because the amount of the bill will be reduced by the payment. A small proportion would have other arrangements in place where electricity costs are part of the rental cost.
At the moment, it is likely that some landlords have contracted tenancy agreements that are inclusive of bills and electricity costs. In that case, they are going to be undercharging for electricity. Energy costs have risen at an unexpectedly fast rate and they are now expected to be sustained rather than short term. Therefore, in those situations where all utilities are included or electricity charges are included in a fixed rent, it is likely that the landlords, in this particular circumstance, have been absorbing the electricity price rises because they cannot raise the rental increases in a rent pressure zone by more than the 2%. With the support of the Department of Housing, Local Government and Heritage, the Department of the Environment, Climate and Communications is working closely with the RTB on a public information campaign to ensure that any tenants, and these are expected to be a small minority, for whom electricity is not separate from the overall rental cost are aware of the scheme and the entitlements. It should be said that to legally require the landlord in those cases to pass on the electricity costs emergency benefit payment to his or her tenant would be unfair to any landlord who is actually paying more for the electricity than he or she is charging the tenant.
Disputes relating to tenancies covered by the Residential Tenancies Acts 2004 to 2022, including any terms relating to electricity payments, can be referred to the RTB for dispute resolution. Section 78 of the Residential Tenancies Act prescribes a non-exhaustive list of matters or complaints that can be referred to the RTB for dispute resolution. I encourage tenants to examine their tenancy agreements and if it is appropriate, refer a dispute to the RTB for resolution. The proposed amendment also appears to apply to living arrangements other than tenancies covered by the Residential Tenancies Acts 2004 to 2022. Some renters reside under a rent-a-room arrangement and I understand that the rent payable, in some cases, can also cover electricity. Again, the homeowner, similar to the landlord, is likely to be undercharging for electricity in some cases.
With regard to local authority tenants, to the best of my knowledge, the standard practice in local authority tenancy agreements is for local authority tenants to set up their own electricity accounts. In these instances, where the local authority tenant has set up an account in his or her own name, he or she will receive the credit and the local authority will have no role. In cases, there may be an exception to this where management fees might be paid for apartments to include utilities. In these instances, should a dispute with the local authority arise, local authority tenants should raise this with their local authority in the first instance and the Ombudsman can examine complaints relating to local authorities.
I cannot accept the amendment. My officials will continue to liaise with the Department of Housing, Local Government and Heritage on this matter. I understand that officials in the Department are keeping the matter under review. Budget 2023, of course, includes a new rent tax credit as part of the package of cost-of-living measures. This is a new €500 tax credit for private tenants who are not in receipt of other State housing supports such as the housing assistance payment, HAP. This is another example of how budget 2023 cost-of-living measures complement the scheme.
On the issue of payments to Travellers, the Government is absolutely committed to ensuring that every Traveller family receives the full amount of the electricity credits, just as any other family in the State will. Those payments will be made through the local authorities, with which my Department is liaising, in the same timeframe within which everybody else's payments are made. The first payment will be made during November and December this year. People have different billing anniversary dates during that two-month period. The second payment will be made during January and February of 2023 and the third during March and April.
I thank the Minister of State for his response. I must invite him to Dublin 1 or Dublin 7 some time, where there are a number of households in which people are living in extremely overcrowded conditions. They pay rent to the landlord, who then charges them for electricity and other utilities on top of that. Ultimately, however, it is the landlord who puts though the payments for those utilities. These landlords, who are already extremely greedy as it is, will benefit from the emergency payment and will not pass it on to their tenants. We are simply asking in this amendment that a legislative responsibility or onus be placed on the landlord to ensure the benefit is passed on to those who are paying the electricity bill.
There are many examples of people having to make an extra payment in respect of utilities on top of their rent. I listened to the Minister of State's concerns about landlords and cases in which bills are included in the rent. However, there are many examples of where utilities are paid by the tenant in addition to the rent. These are the cases we are talking about and it should not be beyond the bounds of the Government's remit to legislate to ensure occupants, who need this help, get it. We have incorporated a dispute resolution mechanism into the amendment, which will enable people to go to the RTB if there is a dispute between landlord and tenant. The Minister of State's response is most disappointing. I ask him to reflect on the situation of those people I am engaging with in Dublin 1 and Dublin 7. I have no doubt there are people in the same situation in his constituency.
I thank the Senator for her invitation to visit Dublin 7. In fact, a few days ago, I was in the north-east inner city to examine problems with street litter and so on with the Dublin City Council cleanup team. Some of the issues with rubbish on the street are linked to landlords with large quantities of tenants who do not have waste collection contracts in place. I expect they will be targeted for priority assessment by Revenue in the future. That is a message for landlords who do not have such contracts in place.
We have discussed two situations, the first being where bills are included in the rent and the second, as the Senator noted, where the bill is split between tenants. In the latter case, the bill will be variable, depending on usage during the month, the VAT rate, which has recently changed, and the PSO levy, which changed recently from being an amount on the bill to a credit on the bill. The landlord splits the bill between the tenants and asks them all to pay their share. If landlords do not split the bill and take some of the money for themselves, that is a breach of natural justice and should be resolved by the RTB. That is called theft.
The Minister of State is fully capable of going beyond calling this a breach of natural justice and ensuring that it is set out in clear terms in the Bill. It is poor reassurance to any of these tenants to say that such practice is a breach of natural justice and they must go to the RTB. There will be an ambiguity if the matter is not set out clearly in the Bill. I ask the Minister of State to consider our amendment again. He is saying he is sympathetic to the situation I have outlined. I cannot understand why he does not follow through by incorporating our proposal into the legislation.
Amendment put:
The Committee divided: Tá, 8; Níl, 14.
Tá
- Boylan, Lynn.
- Higgins, Alice-Mary.
- Hoey, Annie.
- Keogan, Sharon.
- Ó Donnghaile, Niall.
- Sherlock, Marie.
- Wall, Mark.
- Warfield, Fintan.
Níl
- Carrigy, Micheál.
- Casey, Pat.
- Cassells, Shane.
- Currie, Emer.
- Daly, Paul.
- Doherty, Regina.
- Dooley, Timmy.
- Gallagher, Robbie.
- Kyne, Seán.
- Martin, Vincent P.
- McGreehan, Erin.
- Murphy, Eugene.
- O'Reilly, Pauline.
- Wilson, Diarmuid.
Tellers: Tá, Senators Marie Sherlock and Mark Wall; Níl, Senators Seán Kyne and Robbie Gallagher.
Amendment declared lost.
The time permitted for this debate having expired, I am required to put the following question in accordance with the order of the Seanad of this day: "That section 1 is hereby agreed to in committee, in respect of each of the sections undisposed of, the section is hereby agreed to in committee, the Title is hereby agreed to, the Bill is accordingly reported to the House without amendment, Fourth Stage is hereby completed and the Bill is hereby received for final consideration and the Bill is hereby passed."
Question put and agreed to.