Ms Marguerite Sayers:

I thank the Cathaoirleach and members of the committee for the opportunity to share our thoughts and views on the exit of KBC and Ulster Bank from the Irish market and the impact that it might have on our customers.

By way of context, I will briefly mention the structure of the company. ESB has five main operational parts which are ESB generation; ESB Networks; engineering and major projects; the innovation strategy, which includes Northern Ireland Electricity Networks, NIE Networks; and customer solutions, and that includes our competitive retail businesses, which Mr. Colm Ó Raghallaigh and I represent here today.

Customer solutions is primarily comprised of Electric Ireland, which sells energy to customers as well as e-cards, smart energy services, telecommunications and Electric Ireland Superhomes, which is a joint venture with the Tipperary Energy Agency. As we are in a competitive part of the business there are regulatory rules and ring fences in place that govern our interactions with other parts of the business.

On the implications for customers as a result of the exit by KBC and Ulster Bank, as the committee is aware Ulster Bank announced its intention to exit the Irish market in February 2021 and KBC Ireland announced its intention to exit in April 2021. In quarters 1 and 2 of this year, KBC and Ulster Bank, respectively, advised creditors and direct debit originators, which includes Electric Ireland, that they were preparing to write to their customers on a phased basis to inform them that they would have six months from the date of that correspondence to close their accounts with their bank. We understand that while this process has begun there is still a significant number of letters that have yet to issue from the exiting banks. On receipt of the letter from the bank, customers of both KBC Ireland and Ulster Bank will be prompted to open new bank accounts with another credit institution and to arrange to have any existing direct debits, standing orders or recurring card payment re-established. Of course customers are entitled, and have been entitled, to change banks at any time for any reason.

As we understand it, there are two mechanisms through which customers, or their current bank, can provide new bank details to a creditor or new direct debit originator, DDO, such as Electric Ireland, or both after opening their new bank account. Customers can update the new bank account details themselves by directly contacting Electric Ireland online or by telephone or post. Alternatively, customers can utilise the code of conduct of the Central Bank of Ireland, CBI, on the switching of current accounts with credit institutions, which is generally known as the switching code. The CBI's switching code requires that customers' current bank, which in this case is either KBC or Ulster Bank, would write to the existing direct debit originators such as ourselves and notify them of the customers' new bank account details. The system in place for this notification is currently exclusively paper-based. The CBI's switching was designed for individual bank account switchers under normal business-as-usual switching volumes. In our view and experience, the code was not designed for bulk account switching acting resulting from the exit of banks from the Irish market.

In a normal year, Electric Ireland receives and processes about 2,000 direct debit amendment forms.

We consider this to be our typical or business-as-usual switching activity. It encompasses activity from every bank in the Irish market. We currently have a significant number of both residential and commercial customers paying their energy bills through either their KBC Bank or Ulster Bank accounts. Some of these customers have both electricity and gas accounts or they could have multiple accounts with Electric Ireland if they have more than one premises or more than one business. The number of Electric Ireland residential or commercial SME customers paying by direct debit through Ulster Bank and KBC Bank at present is almost 65,000. That is broken down effectively as 16,000 for KBC Bank and 56,000 for Ulster Bank. Some customers may have more than one account so overall we are talking about nearly 86,000 accounts with a similar split between Ulster Bank and KBC Bank. In addition, there are approximately 400 large industrial customers paying by direct debit through either KBC Bank or Ulster Bank. That is the scale of the activity that is impacted in our case.

The priority for Electric Ireland is to minimise the potential impacts and inconvenience to our customers by providing a smooth transition and an easy mechanism for customers to update their bank details once they have opened their new bank account. We are mindful that our customers may have several distinct creditors or direct debit originators and payment organisations which they will need to notify of their new bank account details. This is a shared issue for all creditors, in addition to payment organisations. Electric Ireland is committed to update all bank details received regardless of how the updates are submitted to us.

We have been proactively preparing for the impact of the banks' exit as information has become available to us and we have been engaging with all the relevant fora. For example, in January 2022 we established a team to explore what issues might arise and in February we commenced a monthly internal reporting process to monitor customer migration and to track issues that were arising. We have also simplified and resolved any issues we have identified to date. We have successfully migrated more than 4,000 customers from the exiting banks to the new bank chosen by the customer when the customer has initiated contact with us and given us the relevant details. We have also modified our processes in line with experience gained to date to further streamline the experience for customers who will be in the same situation in coming months. Our team stands ready, as the departing banks ramp up their customer communications regarding the closing of their accounts, to proactively communicate with our own impacted customers to explain how they can update their bank details as quickly and easily as possible. Electric Ireland will also make arrangements to support and assist our registered vulnerable customers or those who may not have updated their bank details with Electric Ireland as the transitionary period draws to a close.

While we work to ensure that the switching experience runs as smoothly as possible, we are concerned about the paper-based Central Bank switching code and that customers may not open new bank accounts and inform us in a timely manner. That is a risk. However, and this is key, Electric Ireland assures committee members that we will be firmly focused on ensuring that there are no energy-supply related interruptions for our customers as a result of the departure of KBC Bank and Ulster Bank. Our request of the committee is that if and when the members encounter any customers impacted by this issue, they will encourage them to open a new bank account as soon as possible and ask them to notify us of their new bank account details. There are a number of ways they can do that. We have different links on our website for personal or residential customers and for business customers. There is the opportunity for customers to contact us through our contact centre and we will also take the information through the post.

We will now have large numbers of customers seeking to make changes to their payment arrangements at the same time - many multiples of our normal annual activity in processing direct debit and standing order arrangements and in a more concentrated period of time. In this context, our focus will be to issue clear communications to advise our customers of the electronic means by which they can update their data with us on our website. It is to be hoped that this, in turn, will minimise the number of manual direct debit mandates being submitted through the existing cumbersome and paper-based bank switching process. In summary, Electric Ireland will aim to promptly update all new bank account details received for our customers, irrespective of the route through which they come to us. As stated, we are clear on which of our customers transact with us via KBC Bank and Ulster Bank and we are entirely focussed on ensuring that our customers do not experience any service interruptions as a result of this process.

Over the coming months, we will continue to work with the respective banks and will issue our own customer communications so that customers changing bank details can do so with minimum disruption from an Electric Ireland point of view. We will also provide assurance to our customers impacted by these circumstances that they will not be at any risk of loss of supply should they experience difficulties or delays during the banking transition. We will stay close to our customers throughout this process to ensure that any concerns arising can be addressed. Electric Ireland continues to engage with KBC Bank, Ulster Bank and the BPFI to assist in raising customer awareness about the steps they may have to take and to support a smooth transition for customers as they change their bank.