Dáil Éireann Debate, Thursday - 7 April 2022
125. Deputy Ruairí Ó Murchú asked the Minister for the Environment, Climate and Communications the further steps that are being considered to mitigate energy price increases; and if he will make a statement on the matter. [18857/22]
View answerResponsibility for the regulation of the electricity market is a matter for the Commission for Regulation of Utilities (CRU) which is an independent regulator, accountable to a committee of the Oireachtas and not to me as Minister. It is a function of the CRU to regulate the electricity market, including the type of measure referred to in the Question.
Government is acutely aware of rising electricity and gas prices and its effects on households. The most immediate factor affecting electricity prices in Ireland is high international gas prices where we are a price taker. This is a global phenomenon and gas prices are now unprecedentedly high, with UK wholesale gas prices recently reaching unprecedented levels. The increase in international wholesale gas prices, have continued to be driven to these historically high levels by the volatility in the international gas market exacerbated by the Russian invasion of Ukraine and ongoing conflict. These gas price increases feed directly through to retail electricity prices as the wholesale price of electricity correlates strongly with the price of gas.
Government’s immediate response to the current surge in international gas prices has been to utilise the tax and social welfare system in Budget 22 to counter rising costs of living for households. Additionally, and in recognition of the ongoing inflationary pressures on households, I introduced The Electricity Costs (Domestic Electricity Accounts) Emergency Measures Bill 2022, that now provides for a credit payment to each domestic electricity account amounting to €200 (including VAT). Approximately 2.1 million account holders will benefit from the payment in the coming weeks. This was one of a range of new measures as part of a €505m package of measures to mitigate the wider cost of living increases announced by Government on the 10th February.
As price caps reflect the various component costs of supply, there is no evidence to suggest that they would lead to better outcomes for customers. Accordingly, I understand that CRU is not considering any such proposals in that regard.In light of the ongoing pressures caused by energy prices I continue to monitor the impact in consultation with key stakeholders and to consider what further measures can be taken to help alleviate them.
