I thank the Leas-Cheann Comhairle for selecting this issue.
Energy costs are rising which is really putting pressure on households and businesses. We have all heard reports of the numerous price hikes that energy providers have inflicted on customers all over the country in the last couple of months. At this stage, people who are living alone and those who are struggling financially are desperately trying to figure out how they will meet their energy bills over this winter.
I wish to raise a specific issue that was brought to my attention yesterday by three different constituents, all of whom have the same energy provider. I am seriously concerned about practices related to fixed price contracts with energy providers, the legality of which must be questioned. One small business owner in Thurles contacted me yesterday about a fixed price contract with an electricity provider. At this time of year, the electricity bill for two months of usage would normally be around €1,200 or €1,300 including VAT. The most recent bill shows energy usage amounting to €1,035, excluding VAT. However, the energy provider has included an additional market charge on the bill of €975 for the two months. This small business owner who is trying to manage overheads has received an electricity bill before VAT which is almost double what it would normally be because of a market charge that the energy provider has suddenly added to the bill.
Many business owners and families opt for fixed price contracts so that they have certainty regarding the bills coming through the door, as long as their consumption does not change dramatically. There are pros and cons to fixed charges but to be landed with an additional market charge out of the blue that effectively doubles an energy bill obliterates any certainty on bimonthly bills for those who opt to avail of fixed price contracts. How can an energy provider that has committed to a fixed price contract double the cost of electricity for its customers overnight? I cannot understand it. The provider may point to some small print on bills but the onus is on us to ensure that we protect those who enter into fixed price contracts. They suffered the negative consequences of such contracts when energy costs were lower in recent years but now, when energy costs are rising due to issues outside of our control, they also suffer. I cannot understand how providers can do this to their customers. An increase of 100% for someone on a fixed price contract makes a mockery of the very concept of fixed price contracting. How can an energy provider do this? Is it legal? Surely customers should be made aware when they enter into fixed price contracts that in the event of increases in the cost of electricity, there is scope for significant increases in their bills. Three people contacted me yesterday about this and while the additional charges were not as high as in the case to which I referred, they were all in the region of 70% to 80%. How is this happening? Is it legal? If it is legal, I would like it to be explained fully.