I move: "That the Bill be now read a Second Time."
Electricity Regulation (Amendment) (Prohibition of Winter Disconnections) Bill 2021: Second Stage [Private Members]
The Deputy has 15 minutes. Is that okay?
That is perfect. I will share with Deputies Kerrane and Cronin, with five minutes each.
Five minutes each. Perfect.
We may not use it all.
I thank the House for the opportunity to speak on this Bill. I thank Deputies Cronin and Kerrane for co-sponsoring it with me.
The Electricity Regulation (Amendment) (Prohibition of Winter Disconnections) Bill 2021 aims to amend the Electricity Regulation Act 1999 to include explicit provision for the Minister to provide policy direction to the Commission for Regulation of Utilities, CRU, to introduce a moratorium on disconnections of gas and electricity supply to domestic customers for non-payment during the annual fuel allowance season or during other periods of time the Minister may deem appropriate. It is an important power that we seek to bestow on the Minister.
We know that the risk and reality of disconnection is something we need to address in a real way. We acknowledge there are powers there already under section 10A. We know the CRU has operated a voluntary code over the years at different times, including during Covid. However, if we track the disconnections in gas and electricity over the years, the most recent figures for 2019 show that there were more than 5,000 electricity disconnections and more than 2,400 gas disconnections, which were up on the previous year. Therefore, we know that more needs to be done to protect vulnerable customers, particularly during the difficult, cold winter months.
An additional power we seek to give the Minister is discretion to identify other periods the Minister may deem appropriate to initiate a ban on disconnections - for example, during the Covid period. We acknowledge that the voluntary scheme significantly reduced the number of disconnections during the Covid period. However, that is for a limited time. We are now living at a time of hyperinflation and a huge increases in cost of petrol and diesel and in the cost of living, putting families under huge pressure. Our proposal is that we would give people the protection, particularly during the winter months or at times otherwise deemed appropriate by the Minister, and to give people some breathing space by removing that threat of disconnection from over their head, however limited that space might be. We know from the figures that when there is not protection there, disconnections happen at a significant rate. This proposal gives people a bit of space to arrange their affairs, to enter into a payment plan, to get themselves back on track in terms of repaying the debt that is owed to the supplier or to engage with other agencies, as might be appropriate, whether the Money Advice & Budgeting Service, MABS, the Society of St. Vincent de Paul or other agencies to support them through the period. It provides a protection for vulnerable customers as well as a safety net and breathing space.
In my last minute, I will point to some of the commentary when section 10A, which is the provision that is there and we seek to amend, was introduced in 2006. The then Minister of State, John Browne, said that it was important that such power should be used sparingly and always in the public interest. That is exactly what we are talking about here. The Minister, Deputy Eamon Ryan, also contributed to the debate at that time. He said the regulated model had not worked because a regulator or bureaucrat based in the Department or the CRU could not take on the political responsibility to lead and that such a person could not take a decision on something awkward, difficult or risky, and that was the role of politicians. The power we want to bestow on the Minister is to protect during the winter months and to identify those periods in which the Minister would be given the discretion to implement a ban on disconnections to protect customers.
This is very important legislation. We have known for some time the struggle that some households face when it comes to energy costs. Of course, that situation is now worse than ever, given the cost of living crisis and the particular crisis that families and households face as electricity and gas prices continue to rise. As we all know, suppliers have been increasing prices further and have been doing so consistently for the past year. In particular, in the past number of weeks, we have seen increases announced by SSE Airtricity, Electric Ireland, Flogas, Bord Gáis and the list goes on.
This is an issue about which the Society of St. Vincent de Paul, in particular, has been raising the alarm for quite some time. It has repeatedly said that there is a need for stronger interventions. This Bill is one such intervention. It is important for the Minister to have the power to instruct the CRU to ban disconnections, particularly for that period of the fuel allowance season when people face real difficulties in relation to heating their homes. We have to also remember the impact on a household of being disconnected and not being able to turn on the lights or heating in the home. We have to remember the impact that must have on vulnerable households, older people, lone parents, carers and children in households and in families. These are children who are getting in the morning and going to school and perhaps coming home to a house that is cold or where there is literally no electricity. In 2022, it is something that should be absolutely avoided, and this is a Bill that would certainly play its part in doing that.
The Society of St. Vincent de Paul has been raising the difficulty households, in particular vulnerable households, are experiencing, most recently as costs continue to rise. A recent REDC poll on behalf of the Society of St. Vincent de Paul showed that the number of people reporting that they are finding it difficult to manage financially has doubled since the start of the pandemic in 2020, from 9% at that time to 18% in January of this year. That is, and should be, a huge matter of concern for all of us in this House. That REDC survey also found that almost 40% of people have cut back on essential heating and electricity; almost 40% of people are worried or quite worried about their ability to meet their household energy costs; and 66% of lone parents are worried about their ability to meet their household energy costs in the next six months. This is very recent data. These are real life stories and situations that people find themselves in.
For the past two years, MABS has been warning of the tsunami of debt that is coming. It warned about that on the back of Covid-19 when we were supposed to be emerging out of it but, of course, we did not foresee the energy crisis that was coming and continues to impact on so many households and families across the State.
There is a particular worry there for people who reply on prepay meters. The data are fairly poor and we need to ensure that companies that are providing prepay meters are keeping an eye on the gaps in between when people can pay and when those meters are not functioning and people are going without. There is a need for far greater data in regard to all of this, but there is also a need for the Government to act. This is an important power that we can put on the Minister to give him or her the ability to ensure that during, for example, the fuel allowance season, there is a ban on disconnections to ensure that when we have very cold weather and people are struggling to heat their homes, they will at the very least know they are not going to be cut off. That is a very basic protection that can be offered to people during the fuel allowance season in particular. It is an important power for the Minister. This is an important issue and it is not something that should be just left to the CRU. It should be the case that the Minister can instruct at times when it is necessary. We should know now, given the cost-of-living crisis we are in. If we ever needed to know how much people are struggling, we can see it today more than ever. This is one measure and one piece of legislation that can make a difference to families and households. I ask that it would be considered by the Government.
When we introduced this Bill, we could not have known that when it would reach this Stage, war would be raging in Europe and energy would be more political and precarious than ever before. At that time, my party had warned about the cost-of-living juggernaut heading our way, warnings which were duly ignored and now the results of that inaction are writ large for families and households across the State, including in my own constituency of Kildare North. In the past, people forced to live on social protection and the working poor felt most of the chill during the winter months, but now families where two people are working are worried about putting on the heat when they come home from work because either a heart attack bill has already landed in the hall or they are afraid there is one in the post. The Government has literally made the State a cold house for its people.
The hardship makes our Bill all the more relevant at this time. It is unconscionable that people's electricity would be cut off in the winter months. This Bill will give the Minister the power to prevent disconnection outright. It would have been a great help to my constituent in Celbridge who was dining and reading by candlelight for the past two years, not because he was an old romantic or an eco-warrior, but because his electricity had been disconnected. A man was living by candlelight in Celbridge in the 2020s. It is just unbelievable. When I contacted Electric Ireland for him, the people I spoke to were very kind. They were excellent. His power is back on, but kindness should never decide whether, in the depths of winter, a citizen of this State can switch on a light in a room or strike a match to light a candle. That is why our Bill gives the Minister the explicit power to direct the CRU on disconnection in the winter months, during the fuel allowance season, so that people can have the necessary security and dignity, not to mention the basic services of heat, light and the ability to cook a meal for themselves. This is not the sun, the moon and the stars. This is not pampering or luxury. It is the basics of living, which people are very worried about now. It is a proper and just worry that will worsen with the effects and uncertainties of Putin's war in Europe.
In 2019, almost 10% of people experienced energy poverty. I dread to think what the number of disconnections will be for this year. In 2019, there were more than 5,000 disconnections for electricity and almost 2,500 for gas. It will be interesting to see the figures for 2022, this historic year. Other countries look after their citizens in winter. Belgium, the Netherlands, France and Canada all have such schemes in place. There is no earthly reason we cannot do it as well, especially now when people are in the vice grip of rents going through the roof, are worried about putting fuel in their car to get to work and are seeing the weekly shop adding up all the time.
These are extraordinary times. We all know that it is currently the sowing season in Ukraine. We are worried about the availability of food all across the world, so things have changed. Our Bill is about the detail of our people in winter. How we treat people is crucial. Disconnecting them in the middle of winter is not just mean; it is alienating and humiliating. It is Dickensian. People are mortified when it happens to them. They are not just disconnected from power, they feel disconnected from society and it really shakes them. I met my constituent in Celbridge a few weeks ago when I was knocking on doors and he was a new man with his electricity back on. He felt part of society again. Being able to keep the light and heat on in the winter says to people who are struggling financially that they are still one of us, and still part of us. With the huge pressures facing people now - the effects of the war on energy and the soaring prices - there will be an awful lot of poor people and an awful lot of working poor who will be struggling to pay their bills. As we face into this new and unprecedented uncertainty, at least with this Bill we can give them one certainty, which is that the Government has their back. It is just one thing, but it can make or break a person. I am long enough in the House now to know how this works, but when I saw the Government amendment I just thought of all the people who would be broken and that it could be avoided if the amendment is withdrawn and the Bill is accepted.
I move amendment No. 1:
To delete all words after "That" and substitute the following:
"Dáil Éireann resolves that, in light of the power to impose moratoria on disconnections of electricity and gas supplies to domestic customers already being in existence and that it has and will be exercised as necessary, the Electricity Regulation (Amendment) (Prohibition of Winter Disconnections) Bill 2021 be deemed to be read a second time this day twelve months to allow for the development and implementation of a package of measures to further strengthen protections for financially vulnerable energy customers and customers in debt as set out in the National Energy Security Framework and for that then to be taken into account in the consideration of this Bill.".
I start by acknowledging the intention behind this Bill and the critical importance of protecting financially vulnerable customers from disconnection, particularly in light of the unprecedented rise in energy prices, which is of serious concern to the Government. I can appreciate Deputy O'Rourke's concern, which is all of our concern, that the unprecedented rise in prices may lead to people finding themselves in a position where they cannot pay their electricity bills, and potentially face disconnection. This is a complex issue which requires a number of tools to tackle it, of which the moratorium on disconnections is one.
As Members are aware, the CRU already has the power to introduce moratoriums. This is set out in section 9 of the Electricity Regulation Act 1999. The capacity of the CRU to impose moratoriums on disconnections is one of its key powers as our independent energy regulator. The CRU already imposes annual winter moratoriums on disconnections from electricity and gas for domestic customers. The CRU also imposes moratoriums on disconnections, as required, in exceptional circumstances, for example, in response to the Covid-19 pandemic in 2020 and 2021.
Although this Bill seeks to make explicit provision for me as Minister to give policy directions to the CRU to introduce moratoriums, the CRU already has the power to introduce moratoriums, which it discharges as the independent energy regulator, as set out in European Union and Irish law. Furthermore, duplication of such function would have funding implications for my Department. Therefore, while I acknowledge the intention of this Bill, there is no gap in the legislation that is being addressed by it. Nevertheless, as I have highlighted, the current situation of rising energy costs is unprecedented and the volatility we are seeing in international energy markets is likely to continue for some time. In light of these extraordinary circumstances, it is critical that we review and improve the measures available to us to protect financially vulnerable energy consumers.
The Government has already taken action, which I will outline in a moment, and further measures are contained in the recently published national energy security framework. It is in the context of this urgent work to implement the actions to support financially vulnerable consumers in the framework that the Government is proposing a timed amendment to this Bill to allow for further consideration of the matter. However, we must be clear that the power to impose moratoriums on disconnections is in place - it is used by the CRU and will continue to be used by the CRU. The power to introduce moratoriums on disconnections for electricity and gas is already vested in the CRU, under the EU legal framework and established in Irish law, in section 9 of the Electricity Regulation Act. The CRU imposes an annual winter moratorium each winter. ESB Networks and Gas Networks Ireland suspended disconnections between 9 December 2021 and 11 January 2022 on the direction of the CRU.
Three separate moratoriums on disconnections were imposed during the Covid-19 pandemic, between March 2020 and June 2021. In light of the fact that the power to impose moratoriums already resides with the CRU, and is exercised by it, I must indicate that there would be a cost involved for my Department in resourcing the new function that this Bill would create. It would entail the establishment of a new section to gather market data, provide analysis of those data, impose moratoriums and undertake enforcement. The undertaking of such a function would be a significant resource overhead for which additional funding would have to be sought. The CRU also has a range of measures in place to protect customers in debt or at risk of debt, including the requirement on suppliers not to disconnect customers in debt who continue to engage with them. We are seeing an historically low level of disconnection at present. However, levels of debt are increasing and this is the critical issue we must work together to address.
On 13 April, the Government published the national energy security framework. The responses it sets out include a further €100 fuel allowance payment, bringing the total fuel allowance payment for 2021-22 to a total of €1,139. It also includes a new targeted €20 million scheme for the installation of photovoltaic panels for households that have a high reliance on electricity for medical reasons; a reduction in VAT from 13.5% to 9% on gas and electricity bills from the start of May until the end of October; and the supporting of customers who do not find it easy to switch supplier to access a competitive rate for their energy.
Furthermore, response No. 6 of the framework sets out a package of measures to be implemented by the CRU to enhance protections for financially vulnerable customers and customers in debt by the third quarter of this year, ahead of the next heating season. These protections will ensure more manageable payment and debt repayment plans. The time for repayment will be extended for customers. Protection for financial hardship prepayment meter customers will be enhanced, and more manageable debt repayment will be ensured. Customers who are in debt will be on a metering or payment plan that is suitable for them and suppliers will proactively identify customers in debt who should not be on prepayment meters and help them find other options.
The involvement of NGOs will be optimised by ensuring all suppliers nominate specific contacts to support customers in debt. Protection from disconnection will be improved for all domestic customers. Greater awareness and uptake of supplier procedures for dealing with customers in or at risk of energy debt will be promoted.
We are well aware that energy prices have been rising for almost two years. These latest measures build on the sustained effort of Government to support energy consumers in the face of these rising prices. Budget 2022 introduced a number of supports for households, including increasing the weekly rate of the fuel allowance by €5 to €33, which meant that the most vulnerable received €914 before the additional payments I referred to.
In February, a suite of further policy measures, amounting to €505 million, was announced by the Ministers for Finance and Public Expenditure and Reform. It is designed to support households and mitigate the cost of living. The measures included the Electricity Costs (Domestic Electricity Accounts) Emergency Measures Act 2022, under which a once-off payment to domestic electricity accounts of €200, inclusive of VAT, is being made to every domestic electricity account. The scheme will have a total cost of €400 million. Following significant preparatory work, people are currently receiving this credit.
In March, the additional lump sum payment of €125 of the fuel allowance was paid to approximately 370,000 recipients. In terms of broader cost-of-living policy responses, as part of the February suite of measures, a reduction of €80 in the drug payment scheme was announced, as well as a 20% reduction in public transport fees from the end of April until the end of the year and a reduction in caps for school transport fees.
In addition to the wider package of energy efficiency supports available from the Sustainable Energy Authority of Ireland, changes have been made to the warmer homes scheme, which will see a significant increase in the number of free energy upgrades for those most at risk of energy poverty. That will change from 177 upgrades per month last year to 400 per month.
Moratoriums on disconnections are a critical tool to ensure the protection of the most vulnerable and prevent hardship. However, they must be part of a wider strategy in which we do as much as possible to help vulnerable citizens to avoid getting into this situation. I stress again that the power to impose moratoriums on disconnections is in place, is used by the CRU and will continue to be used. It is important that we consider this matter as part of the urgent work in train to strengthen supports for energy consumers ahead of next winter. However, it is a complex issue that spans a range of areas, from social protection to regulatory independence.
It is my strong view that the objective of the Bill is already being achieved. However, rather than opposing the Bill, the amendment seeks to allow time for the progressing of the measures set out in the national energy security framework that, along with the existing powers to impose moratoriums, will improve protections for financially vulnerable customers and customers in debt, while avoiding unintended consequences relating to accumulation of debt, encroachment on regulatory independence and duplication of functions across government and public bodies.
I thank my co-sponsors of the Bill for their contributions. We introduced the Bill on First Stage in March last year. We are in a different place now in some respects, in that the pandemic was raging at that time and war is now raging in Europe. However, from the perspective of vulnerable energy customers, we are very much in the same place and, if anything, in a far worse place.
I am very disappointed with the Minister of State's response. I will make a number of points in response to the arguments he made in defence of his position. He argues, through his amendment, that the power to impose moratoria on disconnection of electricity and gas already exists. We have acknowledged that, but there are two fundamental differences. The first is where the discretion lies and the second lies in the delivery of that power. Yes, the CRU can impose a moratorium when it sees fit to do so but we want a ban on disconnections every winter. What do we mean by winter? We mean the fuel allowance season, which does not run from 9 December to 11 January - a little more than four weeks - so that people can cook their Christmas dinner without fear of the power turning off. The fuel allowance season runs from the end of September until the start of April. Anyone who has lived through an Irish winter knows for certain that the worst weather can occur at either end of that period, particularly in the months of February and March. I know this too, having contested a by-election in 2013 in March when the ground was covered in snow every day. People know that. I challenge the Minister of State on the idea that the CRU has this power and uses it every winter. That is not the same as what we are saying. It is entirely different. The discretion of the Minister to identify periods outside winter, within which it may be appropriate to introduce a ban on disconnections, is an additional power that would be useful for him to have.
I refer to the point raised about who exercises the power. I have been in the role of spokesperson for a couple of years. In that time, I have had the opportunity to raise questions with a range of Departments, specifically on climate, communications and transport. I have never seen, in any other Department, such lack of direct ministerial accountability for matters that are the reserve of the Minister. In many cases, responsibility is deflected. Energy security is a fundamental responsibility of the Minister. If I ask questions in the House about energy security, they will be diverted to the CRU, and I will be told the CRU is accountable not to the Minister but to the Oireachtas joint committee. I am a member of that committee and I can guarantee that I speak for every member. I am not satisfied with the level of accountability of the CRU to the committee. From having sat on committees, as we all have, and it has also been reported on the national airwaves, the Minister knows about the accountability of civil servants and others to committees. That is not the case with the CRU.
I mean no disrespect to the individual members of the CRU. They have their jobs to do but there are lines of responsibility. We are elected as public representatives or representatives of the people. We elect our Government, which elects our Ministers. That is the line of authority and the line of accountability back to the people. It is not to leave discretion with the CRU or another group. That is an abdication of responsibility by the Minister and is something that would be changed in the legislation, if it was adopted. I will go back to the words of the Minister, Deputy Ryan, in 2006, when he spoke about departmental officials and members of the regulatory body. He stated:
Such a person cannot take decisions or say something awkward, difficult or risky. In our democratic system, only politicians have the power to do that.
It is a point the Minister has made, in fairness, in recent days and weeks regarding the responsibility of politicians. Accountability should lie with the Minister. That is a strength of our Bill, it is a weakness of the current position and it is a weakness in the Minister of State's argument, as far as I see it.
Those are the technical policy arguments regarding this matter, but the mean-spirited and offensive piece in the position of the Government and the Minister of State is that they are kicking the can down the road and will not act on this for 12 months. We will have another winter where the Government will be satisfied with a moratorium on disconnections for maybe four weeks. That is not good enough, by my account. We will oppose the Government's position and are likely to have a vote on it at some stage, but I ask the Minister of State to review his position on what we are saying to him. If he is saying that the provisions of our legislation are already catered for, we are firmly saying that is not the case. It is not the case in respect of where the responsibility lies and what winter means in Ireland.
The Minister of State needs to go back to the drawing board on this issue. He needs to get on to the Minister to provide those protections for people over these winter months. As we said, this is about providing breathing space for people over the winter months, among everything else, because they are already under pressure. I am sure the Minister of State is very familiar, as is the Minister, with the type of winter that is ahead of us. This winter, we know that fuel prices, electricity prices and gas prices have not yet fully reflected the impact or the full extent of the war in Ukraine. The Government is factoring in increases in the region of a further 50% to 70%. When we meet providers, they talk about a tsunami of indebtedness. That has the potential to be a tsunami of disconnections. This Government needs to provide protection for those customers over the winter months to provide that space for them. A handful of weeks over the Christmas period will not suffice.
In accordance with Standing Order 80(2), the division is postponed until the weekly division time on Wednesday, 4 May 2022.