Pat Rabbitte (Dublin South West, Labour)

I would like to draw the attention of Deputies Ó Cuív and Buttimer to the fact that responsibility for the regulation of the electricity and gas markets is a matter for the Commission for Energy Regulation, which is an independent statutory body.

The residential electricity market has changed dramatically over the past two years with the introduction of competition. Suppliers are required to respond to competitive pressure while at the same time maintaining a balance between business viability and customers' needs. Prices in the electricity retail market have been fully deregulated since April 2011. Price setting by electricity suppliers, including Electric Ireland, is a commercial and operational matter for the companies concerned.

The regulator was established in 1999 to regulate the electricity sector in Ireland. In 2002, its remit was extended to cover the natural gas market. The regulator is independent of all operators in the market and acts in the best interest of energy customers in Ireland by working to ensure that consumers benefit from regulation and the introduction of competition in energy markets.

An electricity supplier can increase or decrease the rates charged to customers in line with what has been signed up to in the contract. This may include increasing or decreasing the unit rate, the standing charge, or any additional charges on bills.

Deregulation enables business and domestic customers to engage proactively with suppliers and seek better value offers from them and-or switch to other suppliers with lower prices. Since deregulation, Ireland has had some of the highest switching rates in Europe. Switching to an alternative supplier can deliver immediate benefits to consumers. The process is quick, easy and capable of delivering real savings to every household and business.

The background to this particular matter is that Electric Ireland, the ESB's customer supply business, introduced a low-user standing charge on 1 February 2012. The charge applies to that minority of customers who use an average of two units, 2 kW, or less per day in any billing period, which is typically 61 days. Standing charges will be increased by 15.5 cent, including VAT, per day or €9.45, including VAT, per two-monthly bill. Based on analysis of last year's consumption, Electric Ireland estimates between 130,000 to 175,000 customers, 10% to 13% of its existing customer base, may be affected. The increased standing charge will not apply to customers who receive a free electricity allowance or those on household budget plans and pay-as-you-go meters.

I would have been very concerned if it were the case that low-income households and vulnerable customers were to be affected by the standing charge increase. I can tell Deputy Buttimer I have been assured by Electric Ireland that such customers will not be affected.

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