Pat Rabbitte (Dublin South West, Labour) | Oireachtas source

I welcome the opportunity to discuss Deputy Moynihan's Bill. Although the Government will be unable to accept it for reasons I will explain, I would like to thank him for bringing it forward because it provides us with an opportunity to discuss what is one of the more important issues facing the energy industry at this time, namely, the disconnection of vulnerable customers. It is also an issue which has caused me to be in regular contact with the industry, the regulator, civil society groups and the Department of Social Protection.

Disconnections benefit nobody. They add extra costs to the entire system, they use up the time and resources of ESB and Bord Gáis Networks and they leave the customer without electricity or gas until he or she is reconnected. This is something we must do everything in our power to minimise.

The Electricity Regulation Act, which governs the operation of the energy market in Ireland, assigns responsibility for the regulation of electricity and gas to the Commission for Energy Regulation. This Act requires the commission to ensure there are adequate safeguards in place to protect consumers' interests. The commission does this by requiring every energy supplier to have a code of practice in place and the objective of each code of practice is to protect consumers and make disconnections a last resort.

If there was a regularity failure here or if the Commission for Energy Regulation was failing to live up to its duties, then I would support Deputy Moynihan's Bill. Unfortunately, I do not believe the enactment of the Bill would prevent one single customer from being disconnected since the code of practice the Deputy envisages is already in place and operating. Despite this, there is always more that we can do to reduce disconnections and I will take this opportunity to outline what the regulator, the industry and my Department are doing to further reduce disconnections.

I would like to put Deputy Moynihan's mind at ease by clarifying what exactly the regulator already does to protect customers and minimise disconnections, although in his opening speech, he paid tribute to the work of the regulator. Every energy supplier, which operates in the Irish energy market, is required to have a code of practice in place. This code of practice must comply with the mandatory standards set out by the regulator in the supplier handbook. A supplier's code of practice must set out clearly how it will deal with its customers and all of the procedures and practices it will follow, including the procedures that apply to any disconnections. These codes of practice are published and are available on the websites of each energy supplier.

Before a supplier can even consider disconnecting a customer, it must agree a payment arrangement which suits the customer's circumstances while avoiding a situation where the debt becomes worse. This can include the installation of a pay-as-you-go meter. Energy suppliers must also refer an at-risk customers for guidance to his or her local Money Advice and Budgeting Service office, the Society of St. Vincent de Paul or a local community welfare officer to find out about any exceptional circumstances, such as what special needs might apply. Only after these measures fail and after at least another four separate attempts to contact the customer have been made without result can a supplier then consider applying for a disconnection.

In addition, all suppliers are obliged to establish and keep updated a register of vulnerable customers. Customers who fall into this category cannot be disconnected during the winter months from 1 November to 31 March. The regulator regularly monitors energy suppliers to ensure they are complying with these standards and only last November, the regulator undertook random audits of suppliers, including site visits. During these audits, suppliers were required to demonstrate on their internal systems how specific customers who were disconnected between 1 November 2012 and 31 March 2013 were treated. The results of the audit, which were published on the Commission for Energy Regulation's website, found that most suppliers go considerably beyond the minimum procedures stipulated in the code of practice.

This Bill calls for the creation of a fine of €3,000 which would be applied to any supplier which violates the code of practice. Currently, a failure by a supplier to meet its obligations, including those specified in its code of practice, can result in the regulator making an application to the High Court for a compliance order. If an energy supplier ignored this, it would be in breach of a High Court order and would be putting its licence to operate in the market place at risk. That is a penalty way beyond that proposed by Deputy Moynihan. These suppliers would not mind paying €3,000 but to lose their licences to operate in the market place would not be something they could contemplate. I do not believe any supplier would be prepared to countenance that.

Notwithstanding the significant powers the regulator already has to achieve supplier compliance, my Department is currently developing legislative proposals to further strengthen the regulator's regulatory powers. The proposals will give the regulator powers to directly impose fines on all licensed entities for prescribed contraventions where these are deemed to warrant financial sanctions. Subject to the advice of the Attorney General on this matter, my objective is to bring proposals to Government shortly.

While I believe suppliers have been sensitive to the needs of customers, the current economic situation means that, even with the best will in the world, some customers are struggling with their energy bills. To give these customers a way to manage their bills, prepay electricity and gas meters known as pay-as-you-go meters were introduced into the Irish market in 2011. These meters are available free of charge to customers facing financial hardship and since they have been made available more than 50,000 electricity meters and 80,000 gas meters have been distributed to customers.

I am convinced that this single measure has done more than anything else to reduce the number of disconnections. When smart meters are rolled out to everyone in the country, every meter will be potentially capable of acting as a "pay as you go" meter, but in the meantime we must continue to target the roll-out of such meters at those most at risk.

In spite of the good work undertaken to date, I am still concerned that the number of electricity and gas connections is too high. To address this, I met with the CEOs of all the energy suppliers shortly before Christmas, along with the network companies and the regulator. I urged this group to think about what new and innovative measures we could further implement to reduce the number of people facing disconnections. This has led to the formation of a task force on disconnections, led by the regulator, that is meeting weekly to examine what urgent measures we can collectively undertake to help support customers having difficulty with their bills. I will be meeting the CEOs again this month, when I expect to be presented with a number of measures that can be implemented quickly to reduce disconnections.

As we consider the issue of disconnections, we should not lose sight of the wider issue of energy affordability. While avoiding disconnections is certainly a laudable goal, it means little if a customer on a "pay as you go" meter is unable to afford to feed the meter to pay for electricity and gas, and is thus forced to self disconnect. Government policy on energy affordability is founded on the fundamental principle that everybody should be able to afford to adequately light and heat their homes. Achieving this requires an integrated approach, which involves extensive co-operation across the Government, industry and the voluntary sector. The Government's energy affordability strategy, known as Warmer Homes, was developed by an interdepartmental agency group on affordable energy, and was formed to ensure that we developed the necessary holistic approach to reduce energy poverty. This strategy identified three key interlinking factors which determine whether a person falls into energy poverty. These factors are energy costs, thermal efficiency and incomes. Our dependence upon imported fossil fuels limits our ability to control energy costs, except through the promotion and development of real and active competition in the energy market. Only last week, Energia entered the domestic electricity and gas market, and I understand the regulator hopes to be in a position to end price regulation in the domestic gas market this April. Customers now have a range of choices and can shop around to seek a deal that best suits their needs and circumstances.

The Government will continue to support incomes by ensuring that those on low incomes are supported and treated with dignity through the household benefits package, and specifically through measures such as the electricity and gas allowance and the fuel allowance. However, the most meaningful measure we can take is to continue to improve the thermal efficiency of people's homes, and thus insulate them from the effects of rising energy costs. To this end, I have secured more than €57 million to fund the Better Energy programme this year. This will lead to a further 12,000 low-income homes receiving an energy efficiency upgrade this year. Around one sixth of all homes in Ireland have received some form of energy efficiency upgrade to date. In addition to making homes more comfortable, healthier and more cost effective to run, the Better Energy programme has supported an average of 3,500 jobs in the construction sector over the past three years. This year, the programme will also assist in an energy saving of over 600 GWh, which is a significant contribution towards reaching our 2020 energy efficiency targets.

This Government shares the concerns expressed today by Deputy Moynihan. However, the solution cannot be to require the regulator to create codes of practice that are already in place and working. We must be more ambitious. We need to keep developing workable solutions. I fully expect the task force on disconnections to present me with a range of measures within weeks that we can adopt to ease the burden faced by families struggling to meet their energy bills. In the long term, we are going to move to smart meters, each of which can act as a "pay as you go" meter. We will continue to ensure that people can upgrade their homes to the highest possible energy efficiency standards. Until then, we will continue to ensure that customers in financial hardship get every support possible to help them manage their energy bills. I urge consumers having difficulties with their bills to talk to energy suppliers, to talk to organisations that can help, such as the Money Advice and Budgeting Service, and to talk to organisations like the Society of St. Vincent de Paul.

These are tough days for everybody in the economy, but for those experiencing energy poverty, times are exceptionally tough. That is why I have concentrated so much time on this issue. As the economy hopefully improves and some thousands of people find jobs again, we can all look forward to a better future.

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