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Dáil Éireann debate -
Tuesday, 5 Apr 2011

Vol. 729 No. 2

Energy Prices

I welcome the opportunity to raise this matter on the Adjournment. While the reduction in electricity prices is welcome, I would like it to be passed on to the more than 100,000 ESB customers currently in arrears. The Minister for Enterprise, Jobs and Innovation, Deputy Richard Bruton, has also made a call in this regard and I hope the ESB will take account of what he had to say yesterday. I also hope heed will be paid to the calls made by other parties and the different groups involved in working with those in financial difficulties.

The Government must communicate to the energy regulator the wide range of opinions in respect of this matter. I hope the regulator will bring pressure to bear on the ESB to change its decision regarding customers in arrears. While there this no doubt that there are persons who are in arrears simply because they do not pay for reasons other than not being able to afford to do so, it is clear that the vast majority of the relevant individuals are in arrears for genuine reasons. As the Consumer Association of Ireland indicated yesterday, those to whom I refer have experienced probably the most difficult period of their lives in recent years. People have lost their jobs, have had their wages reduced and, as a consequence, have fallen into difficulties.

No one likes to fall behind with his or her mortgage repayments, rent or vital household bills. If people do fall behind, it is not only a question of their homes being placed in danger or their not being in a position to heat them properly, there is also the huge element of pride which comes into play. People are embarrassed if they cannot keep up their payments. As I stated last week, when commenting on the universal social charge, I have met individuals who are obliged to make major decisions on what appear to be small amounts of money on a daily and weekly basis. They must contemplate whether they should buy food, pay their rent or mortgage in full, pay their gas or electricity bill or whether they will be able to put some petrol into their cars on a Monday morning.

The worst aspect of all of this is that the people in the position I have outlined are often in employment. There is no doubt that many of those who are in arrears on their electricity bills are also working. That is a shameful situation for decent, hard-working people to find themselves in and it is not as a result of anything they have done. It is a shame that they are on such low wages and obliged to meet so many financial impositions that they find it impossible to make ends meet. It would surely be of assistance to them and would address the issue relating to arrears if the ESB was to extend the welcome reduction in prices to those of its customers who are in arrears. This is an issue in which the energy regulator ought to intervene in order to ensure the reduction in prices will be passed on.

I hope the regulator will refuse the expected request from Bord Gáis Éireann to significantly increase its charges for domestic gas supplies. Such a move would not only cancel out the limited relief provided by the reduction in charges for ESB electricity customers, it would also add to the financial stress imposed on the households to which I have referred.

Social welfare recipients who may be in arrears are entitled to a 6% discount on their energy costs. However, those who are genuinely in arrears and not in receipt of social welfare payments do not qualify for the reduction announced by the ESB. I hope the Minister of State will give this matter his immediate attention.

I thank the Deputy for raising this matter. The Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, has no statutory function in the setting of energy prices, whether in the regulated or non-regulated sectors. The regulation of the electricity and gas markets is the responsibility of the Commission for Energy Regulation, CER, which is an independent statutory body.

The residential electricity market has changed dramatically during the past two years following the introduction of competition. This has brought significant pressure on ESB Electric Ireland, with the loss of some 800,000 customers to date and customer exits continuing at a rate of 5,000 a week. The electricity retail market was fully deregulated as of 4 April, with the entry of ESB Electric Ireland to domestic competition. As a result, business and domestic customers can now avail of the competitive offerings from a number of electricity supply companies. Even in this deregulated energy market, the CER will continue to monitor the position to ensure tariffs are cost reflective, that is, that there will be no below-cost selling.

The Minister and I welcome the ESB's announcement yesterday of price cuts of up to 17% for electricity and gas customers. ESB Electric Ireland is responding to competitive pressure, while maintaining a balance between its business viability — last year over €20 million in bad debts was written off — and customers' needs. This is a further positive example of competition at work in the market, with good results for consumers. As the Minister indicated at Question Time, he has asked the ESB to distinguish between those customers who will not pay and those in genuine trouble. He has also requested that it pay particular attention to the needs of customers with genuine payment problems who want to avail of the price cuts.

ESB Electric Ireland has a well established practice of agreeing payment plans with customers in order to facilitate them in paying off their arrears over a period appropriate to their individual financial circumstances. It makes approximately 150,000 of these arrangements each year. In addition, token meters are offered to customers as an added help in household budgeting. A new generation of pay-as-you-go keypad meters will be rolled out this winter by ESB Networks under the auspices of the CER. By adopting this new technology, it is ESB Electric Ireland's objective that disconnections will no longer occur.

ESB Electric Ireland has confirmed that customers in receipt of social welfare payments who may have arrears can register for the household budget price plan. This plan offers reductions on their electricity unit rates provided they sign up to having a minimum amount of €15 a week deducted at source from their social welfare payments via An Post's household budget scheme. The scheme is strongly recommended by the Money Advice and Budgeting Service, MABS, and the Society of St. Vincent de Paul. ESB Electric Ireland is incentivising its customers to participate in the scheme by means of its new household budget price plan offering.

The current economic climate is placing additional pressures on consumers and many are experiencing problems in meeting domestic outgoings. The numbers experiencing difficulties in paying utility bills is a concern for the Government, the CER and the energy utility companies. Ultimately, this can result in disconnection from service. However, the key message for all customers is to contact their suppliers to make arrangements before the situation reaches the point of disconnection. In addition and in line with the programme for Government, the Minister for Communications, Energy and Natural Resources is working with his colleagues, the Ministers for Social Protection and the Environment, Community and Local Government to bring forward the proposed strategy to tackle energy poverty.

Energy affordability is a cross-cutting policy issue. Tackling the root causes of energy affordability or fuel poverty requires action on a number of fronts. Energy poverty is caused by the interaction between energy prices, thermal inefficiency of the home and income. Considerable work has been undertaken by the interdepartmental-agency group on affordable energy which is chaired by the Department of Communications, Energy and Natural Resources and represents all key Departments, agencies and energy suppliers, as well as the energy regulator and NGOs. The Minister expects the affordable energy strategy group to finalise its work in the coming weeks. Its analysis and recommendations will form the basis of a strategy to be agreed and brought to the Government as soon as possible.

The Dáil adjourned at 9.10 p.m. until 10.30 a.m. on Wednesday, 6 April 2011.
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