Dáil Éireann Debate, Thursday - 19 July 2012
4Deputy Niall Collins asked the Minister for Communications; Energy and Natural Resources his views on whether Bord Gáis should be allowed to increase its prices by up to 10%; his further views on whether such a move would add to persons financial hardship; and if he will make a statement on the matter. [36215/12]
View answerResponsibility for the regulation of gas prices is a matter for the Commission for Energy Regulation, CER, which is an independent statutory body. Bord Gáis Energy's gas tariffs for domestic customers continue to be regulated by the CER and are reviewed each year. I have no function in the matter. The regulator is undertaking its annual detailed review of the Bord Gáis Energy, BGE, tariff. This involves detailed assessment by the regulator of BGE's own recent proposals on gas prices, followed by a consultation process, which will begin at the end of July. The level of increase in the tariff will not become clear until BGE's detailed submission is fully analysed. I am advised that a decision by the regulator is likely to follow at the end of August on whether any increase should be applied to the BGE tariff from 1 October next. In making its decision the regulator takes account of the need to protect consumers from unnecessary price increases by ensuring only reasonable legitimate costs are recovered by BGE. These would include the price of gas in the global market, currency fluctuations and financing cost-efficient network investment for safety and reasons of security of supply.
There are a number of ways for consumers to take actions on rising gas prices, and measures are in place to assist them. They can shop around to get the best possible price and service deal from suppliers, bearing in mind that other suppliers can and do offer competitive prices and products to those charged by BGE. They can also take steps to improve the efficiency of their gas usage, which delivers demonstrable savings.
The regulator is working with gas suppliers to ensure vulnerable customers are protected through, inter alia, the installation of pay-as-you-go meters. The long-term policy responses for Ireland to combat vulnerability to high and volatile gas prices continue to be increasing the use of renewables, better energy efficiencies and reducing the reliance on gas in the fuel mix. Implementation of the measures set out in the Government’s energy affordability strategy is also key to protecting the interests of vulnerable customers.
There is an anomaly in that the wholesale price of gas on the international commodity market is falling, while, at the same time, Bord Gáis is seeking a 10% increase. The public is finding this difficult to understand and while that is not too bad, it will find it even harder to pay. As an entire set of new charges, including water charges and property taxes, will be rolled out in the next few years, everything possible must be done to try to curb and control the price of fuel, energy and electricity. While the Minister has stated the regulator is independent, which may be the case, to what extent does the regulator consider the public interest from the perspective of how people will actually pay for such an increase? When making this point, I am mindful, for example, of the recent survey conducted by the Irish League of Credit Unions which, to its credit, is a broadly based and independent organisation that is to be found in every community throughout the country. Its recent survey of people's disposable incomes and the remainder thereof at the end of a particular month has credibility. Moreover, it was conducted on a cientific and factual basis and showed that the majority of families of their membership did not have any disposable income available to them at the end of the year. When the regulator informs itself, will the Minister ensure it takes into consideration the aforementioned survey carried out by the Irish League of Credit Unions because it was a fine piece of work? The majority of people, particularly in urban settings, who are members of the credit union movement will find themselves in the category of those who face hardship.
In order to inform the regulator properly, can the Minister ensure that he gets that survey as part of his decision making process?
I will indeed ensure the regulator is fully cognisant of the contents of that report. There is a long way to go on the analysis of whether any price increase in warranted. The main drivers in international gas prices are the euro-sterling exchange rate, network costs and volume consumption trends. The weak euro may indeed have assisted many of our SMEs in exporting from the country in recent times, but it works the other way when importing fossil fuels such as gas and oil. That has been an issue.
I assure the Deputy that I will bring that report to the attention of the regulator. I have already communicated my views to the regulator, especially in so far as they relate to protecting the most vulnerable in our society. The regulator reports that there has been a very good uptake in "pay as you go" meters and that the fears last winter about disconnections and so on largely did not materialise. The protocols we put in place at the time - no disconnections provided the customer signs up to a pay plan or installs a "pay as you go" meter - have been quite effective. I would like a faster rate of uptake of the meters and I hope that takes place between now and the beginning of the winter.
