Michael Colreavy (Sligo-North Leitrim, Sinn Fein) | Oireachtas source

I welcome the witnesses. I must say that I met officials from the commission recently to discuss this very matter and I found that meeting very helpful. I went in with a fairly simplistic view of the commission's world. I thought that the commission could tell companies the price they can charge per unit. However, the commission described to me during that meeting, and again today, quite a complex algorithm used by the companies. The commission's responsibility is to ensure that the algorithm is being applied correctly in order that, in comparison with other markets, customers are not being ripped off. I would much prefer it to be as simple as my view of the world because we could probably protect customers' interests a lot better then. However, it appears that this is not being done anywhere else either so there must be some reason for that.

I have raised the issue of the PSO levy previously, which contributes 8% to electricity costs. I believe it is entirely unethical to apply VAT to that levy. I understand that this is not the responsibility or fault of the commissioners and the Department of Finance argues that it is an EU requirement. I do not care whether it is a European or national decision; it is entirely unethical. It represents a tax on a tax and we should be seeking ways to change that.

I am glad we have clarification on the price taker issue. It would be lovely if we, as a nation, were price makers. That would be lovely. Some people are suggesting that we should allow hydraulic fracturing in this country and argue that if we get gas in Ireland, the price of energy generally will drop dramatically. Those arguments are generally made by people who have some vested interest in hydraulic fracturing. The truth needs to be out there that, no more than with Corrib, even if we did have hydraulic fracturing in Ireland, we would continue to be price takers. We need to understand the truth in that regard.

In terms of price comparisons, I look at different tables and see different things. There are variations in terms of the European average price, median price and so on, which I have not got to the bottom of yet. I will keep going at it until I understand it fully. There does not appear to be one set of standard figures which indicates the costs to the customer - highest, lowest, average - throughout the EU. I will need to do more research in that regard.

As the commissioners have said, customers should be encouraged to switch providers. Indeed, after my recent meeting with the commissioners, I appeared on the local radio station, Ocean FM and gave that advice to people again. I believe that the rate of switching in the north west is very low, partly due to the availability of fewer options and partly because of the age profile of the population. In many instances, people have been dealing with the same companies for many years and have a loyalty towards them. There are discounts available to people who switch providers which means that the people who are loyal to companies are paying more. That is the bottom line there and it is wrong. As I pointed out at the aforementioned meeting, if 50% or more of customers switched every 12 or 18 months, as they would be entitled to do in line with contractual agreements, we would have price inertia and the model would not work. The increase in one company would be offset by a reduction in another company and that would begin to balance out. We would then have price inertia. I believe it is an unsound model on which to move forward. I spoke about the algorithm that the commission examines and its component parts and I believe we should be looking at those component parts to see if there is anything more we can do to question the companies about, for example, their levels of profit. Is that part of the algorithm? Do we care? Is there scope within the companies to reduce the price to their customers? We need to look at that algorithm and its various components to determine if there are areas over which we have no control or into which we have no input and to decide whether we should have.