Mr. Evan Walker:

No, at present the regulator does not have full visibility of the individual contracts and portfolio hedges that a company has. In order to implement this regime, if a company states it has hedged away 50% at a particular price, it has to be verifiable to the regulator. Otherwise the full payment obligation stands. We start from a point where there is a preliminary surplus at €120. This is the surplus we see at societal level. To reduce this and adjust the surplus basis, the company has to be able to show it to the regulator. This is for the regulator to challenge and verify. It goes back to the default if the company cannot show it or is unwilling to show it and the full payment obligation stands.

I want to make a point on prices. It is important that we maintain an evidence base when we have a contention that consumer bills increased very quickly and are now not coming down. Between January 2021 and August 2022, wholesale prices in gas increased by 417%, whereas information on estimated annual bills from the CRU showed an increase of 138%. The wholesale side increased by 417% between January 2021 and August 2022 at the peak and consumer bills increased massively but at 138%, versus 417%. It is a similar story on the electricity side. Wholesale electricity prices in Ireland increased by 493% during that time period, whereas electricity bills increased by 98%. There is a difference between the wholesale price increases and direct elasticity or propensity to pass on an increase in consumer bills. This has to be taken into account in managing expectations about the objectives of the Bill and what this measure can do.