Ciarán Cannon (Galway East, Fine Gael)

I thank the Deputy for raising this matter. The Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, has no statutory function in the setting of energy prices, whether in the regulated or non-regulated sectors. The regulation of the electricity and gas markets is the responsibility of the Commission for Energy Regulation, CER, which is an independent statutory body.

The residential electricity market has changed dramatically during the past two years following the introduction of competition. This has brought significant pressure on ESB Electric Ireland, with the loss of some 800,000 customers to date and customer exits continuing at a rate of 5,000 a week. The electricity retail market was fully deregulated as of 4 April, with the entry of ESB Electric Ireland to domestic competition. As a result, business and domestic customers can now avail of the competitive offerings from a number of electricity supply companies. Even in this deregulated energy market, the CER will continue to monitor the position to ensure tariffs are cost reflective, that is, that there will be no below-cost selling.

The Minister and I welcome the ESB's announcement yesterday of price cuts of up to 17% for electricity and gas customers. ESB Electric Ireland is responding to competitive pressure, while maintaining a balance between its business viability - last year over €20 million in bad debts was written off - and customers' needs. This is a further positive example of competition at work in the market, with good results for consumers. As the Minister indicated at Question Time, he has asked the ESB to distinguish between those customers who will not pay and those in genuine trouble. He has also requested that it pay particular attention to the needs of customers with genuine payment problems who want to avail of the price cuts.

ESB Electric Ireland has a well established practice of agreeing payment plans with customers in order to facilitate them in paying off their arrears over a period appropriate to their individual financial circumstances. It makes approximately 150,000 of these arrangements each year. In addition, token meters are offered to customers as an added help in household budgeting. A new generation of pay-as-you-go keypad meters will be rolled out this winter by ESB Networks under the auspices of the CER. By adopting this new technology, it is ESB Electric Ireland's objective that disconnections will no longer occur.

ESB Electric Ireland has confirmed that customers in receipt of social welfare payments who may have arrears can register for the household budget price plan. This plan offers reductions on their electricity unit rates provided they sign up to having a minimum amount of €15 a week deducted at source from their social welfare payments via An Post's household budget scheme. The scheme is strongly recommended by the Money Advice and Budgeting Service, MABS, and the Society of St. Vincent de Paul. ESB Electric Ireland is incentivising its customers to participate in the scheme by means of its new household budget price plan offering.

The current economic climate is placing additional pressures on consumers and many are experiencing problems in meeting domestic outgoings. The numbers experiencing difficulties in paying utility bills is a concern for the Government, the CER and the energy utility companies. Ultimately, this can result in disconnection from service. However, the key message for all customers is to contact their suppliers to make arrangements before the situation reaches the point of disconnection. In addition and in line with the programme for Government, the Minister for Communications, Energy and Natural Resources is working with his colleagues, the Ministers for Social Protection and the Environment, Community and Local Government to bring forward the proposed strategy to tackle energy poverty.

Energy affordability is a cross-cutting policy issue. Tackling the root causes of energy affordability or fuel poverty requires action on a number of fronts. Energy poverty is caused by the interaction between energy prices, thermal inefficiency of the home and income. Considerable work has been undertaken by the interdepartmental-agency group on affordable energy which is chaired by the Department of Communications, Energy and Natural Resources and represents all key Departments, agencies and energy suppliers, as well as the energy regulator and NGOs. The Minister expects the affordable energy strategy group to finalise its work in the coming weeks. Its analysis and recommendations will form the basis of a strategy to be agreed and brought to the Government as soon as possible.

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