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Gas and Electricity Disconnections

Dáil Éireann Debate, Tuesday - 18 September 2012

Tuesday, 18 September 2012

Ceisteanna (954, 989, 990)

Michael Moynihan

Ceist:

954. Deputy Michael Moynihan asked the Minister for Communications; Energy and Natural Resources if his attention has been drawn to the difficulties faced by many families in heating their homes in view of increasing energy prices; the average energy prices for each of gas and electricity for the years 2008-2011; the same figures now; the price increases sanctioned by the regulator in each of those years; and if he will make a statement on the matter. [36988/12]

Amharc ar fhreagra

Thomas P. Broughan

Ceist:

989. Deputy Thomas P. Broughan asked the Minister for Communications; Energy and Natural Resources his views on the impact of recently approved gas and electricity prices on families and businesses; if he was briefed by CER on the decision to approve further gas and electricity price rises; and if he will make a statement on the matter. [38592/12]

Amharc ar fhreagra

Thomas P. Broughan

Ceist:

990. Deputy Thomas P. Broughan asked the Minister for Communications; Energy and Natural Resources if he will outline each approved rise in gas and electricity prices every year since 2009; if he will state the cumulative rise in gas and electricity since 2010; and if he will make a statement on the matter. [38593/12]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 954, 989 and 990 together.

I have no statutory function in the setting of electricity and gas prices, whether in the regulated or non-regulated parts of these markets. Responsibility for the regulation of the electricity and gas markets is a matter for the Commission for Energy Regulation (CER), which is an independent statutory body. Since 4 April 2011 prices in the electricity retail market have been fully deregulated. Price setting by electricity suppliers is a commercial and operational matter for the companies concerned. Business and domestic customers can now avail of the competitive offerings from a number of electricity supply companies.

With regard to gas, up until 1 October 2011 the CER has regulated the Bord Gáis Energy tariffs for its residential and smaller business customers but price regulation for the latter group ended at that point. The CER still regulates the Bord Gáis Energy tariffs for its residential customers. I have no function in the matter. The timing for complete deregulation of the residential segment of the gas market, as has taken place in the electricity market, is an issue under active review by the CER. Full deregulation leading to further competition will keep downward pressure on prices for consumers. Ireland is however a price taker for gas.

In regard to the most recent decision by the CER to apply an increase of 8.5% with effect from 1 October next, I understand that a marginal increase in wholesale international (sterling denominated) gas prices did not impact on the increase as much as the deterioration in the Euro/Sterling exchange rate and the increase in gas network tariffs. The upward pressure on gas network tariffs is primarily due to a reduction in gas demand and higher financing costs for Bord Gáis Networks, both of which are related to the financial situation in Ireland and abroad. Currency exchange trends will continue to have a significant impact, either positive or negative, on gas prices for Ireland. In making its decision, the CER takes account of the need to protect consumers from unnecessary price increases by ensuring that only reasonable legitimate costs are recovered by BGE.

The information requested in relation to CER gas tariff decisions and on the cumulative rise since 2010, is set out in the table.

CER Decisions on BGE tariffs for residential and smaller industrial and commercial customers

Period (includes CER Decisions following Interim Reviews)

Average % Increase/Decrease

1 October 2012 – 30 September 2013

+8.5%

1 October 2011 – 30 September 2012

+21.7%

1 February 2011 – 30 September 2011

0%

1 October 2010 – 31 January 2011

0%

1 February 2010 – 30 September 2010

-8%

1 Oct 2009 -31 January 2010

-9.8%

1 May 2009 – 30 September 2009

-12%

1 Jan 2009 – 30 April 2009

0%

1 Sept 2008 – 31 December 2008

+20%

1 Oct 2007 – 30 August 2008

-10.6%

Cumulative increase from January 2010 to date

+32%

The information requested in regard to CER electricity tariff decisions and on the cumulative rise since 2010, is set out in the table. In view of deregulation, the information is available only up to the time of deregulation (i.e. April 2011).

CER Decisions on regulated Electricity prices – domestic tariffs up to April 2011

Period (Includes CER Decisions following Interim Reviews)

Average % Increase/Decrease

1 October 2010 – 4 April  2011

+4.9%

1 October 2009 – 30 September 2010

0%

1 May 2009 – 30 September 2009

-10%

1 Jan 2009 – 30 April 2009

- 0.6%

1 Aug 2008 – 31 December 2008

+17.5%

1 Nov 2007 – 31 July 2008

-5.4%

Cumulative Increase from January 2010 to April 2011

+4.9%

Global gas and oil prices have risen sharply since the start of 2011 driven by events in the Middle East, North Africa and Japan and demand from the emerging economies of China and India. There are clear indications that international oil and gas prices will rise further over the coming months.

The Government is most concerned at the impact of higher gas and electricity prices on residential and commercial consumers. As indicated above, it is regrettably the case that in the main Ireland is at the mercy of international fossil fuel prices which dictate the retail price of gas and electricity. My focus is on those elements of energy costs over which policy can exercise some control.

Accordingly, it is estimated that some €175.8 million will have been spent on the Better Energy programme on energy efficiency measures in 2011 and 2012. This includes funding for some 195,387 measures in households under the Better Energy: Homes scheme. Under this programme, €24.5 million was provided under the Better Energy: Warmer Homes Scheme which provides grant assistance for low income families. In addition the Government is actively supporting the rollout of renewable resources of electricity which has grown from an estimated 9.3% of electricity consumed in 2007 to an estimated 17.6% in 2011.

There are a number of ways for consumers to take actions on electricity and gas prices, and measures 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. Consumers can also take steps to improve the efficiency of their electricity and gas usage which delivers demonstrable savings.

The CER is also working with energy suppliers to ensure that 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.

Since 2008, comparable EU data on retail electricity and gas prices is published every six months by Eurostat. The Sustainable Energy Authority of Ireland (SEAI) publishes analyses of the Eurostat data twice a year. This analysis is conducted by the Energy Policy Statistical Support Unit (EPSSU), the specialist statistical unit of SEAI. For households, electricity and gas prices include all charges payable but do not include initial connection charges. Prices represent weighted average prices, using the market share of the electricity and gas suppliers surveyed as weighting factors. Market shares are based on the quantity of electricity and gas invoiced by the electricity and gas suppliers to household end-users.

The latest analysis of data published by Eurostat for electricity and gas prices is published by the SEAI and covers the period July to December 2011. For most domestic electricity customers prices increased by between 10% and 17% in this period. Other European countries also sustained significant prices increases during this period. While residential gas customers also experienced a significant price rise, in the order of 21% for the second half of 2011, residential gas prices remain lower than the European average. Statistics for previous years for the various consumption categories are publically available on the SEAI website:

http://www.seai.ie/Publications/Statistics_Publications/EPSSU_Publications.

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