Eamon Ryan (Dublin South, Green Party)

I propose to take Questions Nos. 76 and 77 together.

Encouraging a competitive energy supply is a key policy objective for the Government. Rising energy costs are a major concern for all sectors of the economy and for consumers. The regulation of ESB customer supply electricity tariffs and BGE gas tariffs is the statutory responsibility of the Commission for Energy Regulation, CER, under the Electricity Regulation Act 1999 and the Gas (Interim) Regulation Act 2002.

I welcome that the CER announced on 1 December 2008 there would be no further increase in the price of gas from January 2009 and that there would be a small average decrease from that month of just less than 1% in the price of electricity supplied by ESB Customer Supply. This decision is reflective of recent easing in international fossil fuel prices. I also welcome the substantial rebate of about €400 million being provided by ESB to all electricity customers, irrespective of their supplier, which has helped to stabilise electricity prices for 2009.

The two-phase approach to tariff regulation adopted by the CER last year resulted in price increases in the Irish market which were lower than those in some of our neighbouring markets. In Great Britain, for example, independent suppliers increased electricity tariffs by more than 26% on average, and gas tariffs by more than 40% on average in 2008, in response to increasing fossil fuel prices. By contrast, regulated tariffs in Ireland increased by an average of 17.5% in the case of electricity and 20% in the case of gas. In taking this phased approach, the CER took account of the difficult economic situation and the impact of price increases on business and consumers, including vulnerable customers.

The CER has previously demonstrated an ability to adapt its tariff regulation process in line with evolving market conditions. I note, for example, the CER decision to end tariff regulation for large electricity users in 2006, based on its conclusion that there is a sufficient level of competition in this market. The majority of large industrial and commercial electricity customers are currently supplied by independent suppliers. Many of these large industrial consumers are on fuel variation tariffs and have already experienced the benefits of falling gas prices.

The CER is required to ensure that regulated tariffs are cost reflective. However, I believe it may be possible to lower energy costs to consumers in a non-distortionary fashion, through an expedited review of tariffs. To achieve this, I have asked the energy regulator to undertake an immediate review of options to bring forward a reduction in electricity prices. As I stated in this House last week, if current trends in energy prices, particularly gas, continue, I would expect a double-digit cut in electricity and gas prices to become a reality later this year.

I also expect that, in the context of this review, the CER will advise on additional non-discriminatory and pro-competition measures that may be taken to bring about reductions in energy prices in the short-term. The ESB rebate, which I mentioned earlier, demonstrates the type of imaginative solutions that can be developed when all parties work together to ensure the best outcome for energy consumers in Ireland. I expect the timeframe for implementation of any reductions to become clearer in the coming weeks as we develop a better understanding of these potential measures. The priority for the Government is to ensure that we act swiftly in the interests of energy consumers.

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