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Energy Prices

Dáil Éireann Debate, Tuesday - 14 December 2021

Tuesday, 14 December 2021

Questions (31)

Neale Richmond


31. Deputy Neale Richmond asked the Minister for the Environment, Climate and Communications if his Department has had engagement with stakeholders, including other Departments and energy suppliers, on the cost of utility bills for consumers; and if he will make a statement on the matter. [61261/21]

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Oral answers (8 contributions) (Question to Environment)

This question will be taken by Deputy Griffin.

This question is about the rising cost of utility bills. I want to know what engagement the Minister of State and his Department have had with utility companies on the situation faced by consumers throughout the country. I refer to the rising costs and the massive difficulty they are placing on householders. What can we do about it?

The Government is acutely aware of the impact the recent increases in energy prices are having on households. This is a global phenomenon. Expert commentators, including the International Energy Agency, have attributed it to a range of demand and supply factors that have contributed to a tightening of the European gas market supplies and the upward trend in wholesale gas prices we have witnessed since mid-2020. The best long-term approach for Ireland to insulate consumers from volatility on international wholesale energy markets is to invest in energy efficiency and renewable energy, to expand interconnection with our European and neighbouring markets and to deepen internal electricity market integration.

The Government's immediate response to address the increase in domestic energy prices has been to utilise the tax and social welfare system to counter rising costs of living. Budget 2022 increased the weekly rate of the fuel allowance such that €914 will be paid to eligible households over the course of the winter. Increases to the qualified child payment, the living alone allowance and the income threshold for the working family payment were also announced.

Consumers should continue to switch or to engage with their energy supplier. Many households could still save on their bills if they did so. As recently as 9 December, switching supplier could save a customer consuming the average amount of electricity up to €313.

The CRU has in place a suite of protections against disconnection that are set out in the supplier handbook. In brief, priority customers cannot be disconnected, while vulnerable customers are protected over the winter months, from 1 November to 31 March each year, and a CRU moratorium on disconnections for all customers comes into effect over the Christmas period.

In addition, under the supplier-led voluntary energy engage code, a supplier will not at any time disconnect a customer who is engaging with them. Furthermore, due to the ongoing pressure on households, the Government agreed today to provide a once-off credit of €100 to every domestic electricity account holder through their electricity supplier in the first quarter of 2022.

I welcome all of the measures that have been introduced. Anything that helps, is a help. The social welfare adjustments and the announcement today in respect of the €100 credit for account holders are important. It is not a perfect scheme. It is quite crude, but the credit is for €100. Those who need the credit will welcome it. I wish there was a quicker and more targeted way of doing it. Perhaps that can be worked on in the long term. The measure is welcome, but I still feel that a lot more needs to be done. From my research in this area, I know that in the year up to November, petrol prices increased by 27.5%, diesel prices by 26% and gas, water and heating prices by 12%. All of these increases are having an impact on householders. We need to do more. It is really squeezing people and causing massive hardship for them. We need to do more. I ask that we also look at taking a more co-ordinated approach at European level, because it is something that is happening throughout Europe.

I accept that we need to do more. We need to do everything that we possibly can. The Deputy spoke about petrol and diesel prices. I note the recent protest by the truck drivers. The fundamental problem here is that the international price of commodities holds us to ransom, and has done for decades. When the international price of gas or oil goes up, we cannot make that go away. We can try to chase the prices and give subsidies and so on, but we can never really overcome that. The price of a barrel of oil increased, over a few years, from $10 to $140. It is a fundamental weakness in the system. People talk about renewable energy and say that it is variable and we do not know when we are going to get it, but there is huge variability and volatility in the price of fossil fuels. That puts us at risk. It is an ongoing strategic risk to our country that will be removed by the switch to green energy.

I agree with the principle of carbon taxation. I think it is something that we have to do, unfortunately. I do not like any taxes, but it is something that we have to do for the sake of the planet. There are times when there are peaks in global oil prices like those we are seeing now. We are experiencing a really high peak at present. There has to be a flexible approach from the Government. We control things like excise. The State and the coffers do very well when there are high prices because a percentage of those high prices comes back to the State. There must be intervention from the State at peak times such as those we are experiencing right now. The Minister of State is not the Minister for Finance. I have raised the issue within my party. I am deeply upset about the lack of movement on the issue. There has to be flexibility on the part of the Government to avoid fuel poverty and the almost hyperinflation resulting from extremely high prices that are being contributed to by the State's own excise duties. As I said, the carbon tax is getting a bad name. It only makes up a small percentage of the price. Action in respect of excise duties can make a big difference, and that needs to be examined. I urge the Minister of State to contact the Department of Finance on the issue.

On the topic of energy suppliers and the cost of utility bills, it is really important that we consider the number of people who, on the advice of the Government, are working from home. Working from home is having a huge impact on the cost of utility bills, as well as the general increases that we have been talking about today. Many people are spending a lot more time at home, which is contributing to increases in their bills. I have been contacted by a number of constituents who have taken steps to retrofit their homes, and who are opting to go for the renewable forms of energy because they are concerned by the prospect of rising energy costs and spending more time at home. While the Government does whatever is in its power to tackle rising energy costs, this is also the perfect opportunity to encourage homeowners to make the switch to long-term, more affordable and sustainable sources of energy. The announcement earlier of the €100 credit will be welcomed by many families throughout the country. I thank the Minister of State and the Government for introducing it.

In response to Deputy Griffin, I accept that we need flexibility. We are not taking a rigid ideological approach on this issue. It is important to think about our long-term future and what we will be doing in ten years' time, but we also need to think about what is happening next month and whether people can make their bills for that month. We must be open to that. I am willing to discuss the issue with the Deputy at any time. He is right that it is also a matter for the Minister for Finance. I will talk to him about it.

In response to both Deputies, I would say that the one thing everybody can do is either consider switching energy suppliers or contact their energy suppliers and say they are considering doing so. Customers can save hundreds of euro on their bills by doing that - much more than the €100 that we are going to give account holders in the first quarter of next year.

On the issue of working from home, a tax relief has been brought in for people's energy costs in working from home. I ask Deputy Higgins to ask her constituents to look at that. It should also be considered that there are reduced commuting costs when working from home. It is not easy. People need extra space to work from home, and not everybody can do it. I understand that.