Michael Moynihan (Cork North West, Fianna Fail) | Oireachtas source

I welcome the Commission for Energy Regulation, CER, to the committee to discuss this issue. There is huge frustration with the system given the reduction in oil and gas prices. The CER is right that gas is the major component in terms of Irish energy prices. People are asking why they are not seeing a reduction in the price of electricity, when they have seen a reduction in price at the petrol pumps. They are asking what is wrong with the system and if the companies are creaming off the profits. I have discussed this with some of the energy providers in recent weeks and they went through the hedge funding, how the purchases are made and so on.

In 2012, if I am not mistaken, the energy providers went to the CER looking for an increase in electricity prices of somewhere in the region of 6% but ended up getting 8%. We accept they have hedged their bets and bought in at a particular price. Obviously, the energy suppliers will buy now that gas prices are low and they will hedge now. Will we see the 18% reduction reflected in the bills of ordinary customers and business people?

Another point I raised with the CER previously is that when one looks at the annual accounts of the energy providers, one sees that they are making massive profits. Some of them end up with profits of €500 million. The perception is that it is being made on the back of the energy prices they charge for their product. Perhaps Ms MacEvilly might gives us her thoughts on that.

If we accept hedging, we expect that if energy prices increase at some point in the future, there will be a six to 12-month period in which energy prices for consumers will not rise accordingly. If the companies are telling us the truth, they will have six months to 12 months of energy bought at a lower price. The price increase on the wholesale market is nearly always reflected within a very short period of time.

We are very dependent on prices in the UK. When will the Corrib gas come on stream? Will it have an impact on energy prices?