Dáil Éireann Debate, Wednesday - 17 July 2013
9. Deputy John McGuinness asked the Minister for Communications, Energy and Natural Resources his views on whether there is enough flexibility for consumers in the energy market; and if he will make a statement on the matter. [35035/13]
Amharc ar fhreagraResponsibility for the regulation of the electricity and natural gas market is a matter for the Commission for Energy Regulation, which is an independent statutory regulator. I am very mindful of the importance of well-functioning energy markets for business and domestic consumers. The Government remains firmly committed to increasing competition as the best means of exerting downward pressure on prices in the electricity and gas markets in Ireland. There is competition in both markets, with many players competing in the wholesale and retail segments of the electricity market and in the retail segment of the gas market. New players have moved into the various segments over the years, which is a welcome development, and which has increased competition.
The regulator has issued eight licences in the electricity and gas supply sectors. The competitive market gives consumers considerable flexibility in choosing their energy suppliers. Furthermore, the regulator's simple switching process and the accredited independent price comparison websites, bonkers.ie and uswitch.ie help consumers to identify the electricity and gas products and price plans best suited to them.
Business and domestic consumers can choose from a range of suppliers in electricity and gas. They can avail of the various competitive products and services, including discounts, on offer from a number of supply companies. I urge customers to shop around to enable them obtain the most beneficial package suited to their particular needs.
A number of issues arise in terms of the flexibility for all businesses. Arrears is one issue and another is customers who wish to move. Issues also arise in connection with the price increase. The argument has been made in committee meetings with the energy regulator. The industry and people with small businesses have informed us that only three countries in the EU - Cyprus, Greece and Italy - had higher price increases than this country. One could ask why that is the case. It is constantly said that not enough is being done about price. We have had the argument about price increases with the regulator. The ESB is one of the major electricity producers and it has made considerable profits. It is difficult to explain the position to people who are trying to work through arrears of up to €500 when they know they could get a cost reduction by shifting their business elsewhere. There must be more flexibility within the system.
Eight suppliers operate in the electricity market and there are coincidentally eight active suppliers licensed by the regulator in the gas market. For a country our size there is certainly adequate competition, but as the Deputy fairly points out, energy prices in this country are high. That is partly because we are an isolated island that has not generated any of its own fuel in terms of oil or gas to any persistent or regular extent.
There is a practice involved of debt flagging in terms of switching providers. Switching has been significant. There must be a system of debt flagging because otherwise there is the phenomenon known as debt hopping. In other words, one accumulates arrears and then one switches to a different supplier. That must be taken on board as well and acknowledged that it is a problem. Some 250,000 customers switched their electricity supplier in 2012. They were composed of 215,000 domestic customers, 33,500 small businesses, 3,000 medium businesses and 231 large energy users. In the gas market, 110,000 customers switched, almost 17%. They were composed of 106,000 domestic customers and 3,867 business customers. There is competition.
Deputy Moynihan is correct; the profits of the supply companies seem to be large. In the case of the State companies where we have some say as shareholder, of course investment is needed to maintain the system. The capital investment in the ESB alone this year will be €888 million. It is a huge spend that does benefit the economy and whereas the profits might seem large, investment must be made in order to continue to modernise and build out the transmission system.
