Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

I move amendment No. 1:

To delete all words after "That" and substitute the following: "Dáil Éireann resolves that, in light of the power to impose moratoria on disconnections of electricity and gas supplies to domestic customers already being in existence and that it has and will be exercised as necessary, the Electricity Regulation (Amendment) (Prohibition of Winter Disconnections) Bill 2021 be deemed to be read a second time this day twelve months to allow for the development and implementation of a package of measures to further strengthen protections for financially vulnerable energy customers and customers in debt as set out in the National Energy Security Framework and for that then to be taken into account in the consideration of this Bill.".

I start by acknowledging the intention behind this Bill and the critical importance of protecting financially vulnerable customers from disconnection, particularly in light of the unprecedented rise in energy prices, which is of serious concern to the Government. I can appreciate Deputy O'Rourke's concern, which is all of our concern, that the unprecedented rise in prices may lead to people finding themselves in a position where they cannot pay their electricity bills, and potentially face disconnection. This is a complex issue which requires a number of tools to tackle it, of which the moratorium on disconnections is one.

As Members are aware, the CRU already has the power to introduce moratoriums. This is set out in section 9 of the Electricity Regulation Act 1999. The capacity of the CRU to impose moratoriums on disconnections is one of its key powers as our independent energy regulator. The CRU already imposes annual winter moratoriums on disconnections from electricity and gas for domestic customers. The CRU also imposes moratoriums on disconnections, as required, in exceptional circumstances, for example, in response to the Covid-19 pandemic in 2020 and 2021.

Although this Bill seeks to make explicit provision for me as Minister to give policy directions to the CRU to introduce moratoriums, the CRU already has the power to introduce moratoriums, which it discharges as the independent energy regulator, as set out in European Union and Irish law. Furthermore, duplication of such function would have funding implications for my Department. Therefore, while I acknowledge the intention of this Bill, there is no gap in the legislation that is being addressed by it. Nevertheless, as I have highlighted, the current situation of rising energy costs is unprecedented and the volatility we are seeing in international energy markets is likely to continue for some time. In light of these extraordinary circumstances, it is critical that we review and improve the measures available to us to protect financially vulnerable energy consumers.

The Government has already taken action, which I will outline in a moment, and further measures are contained in the recently published national energy security framework. It is in the context of this urgent work to implement the actions to support financially vulnerable consumers in the framework that the Government is proposing a timed amendment to this Bill to allow for further consideration of the matter. However, we must be clear that the power to impose moratoriums on disconnections is in place - it is used by the CRU and will continue to be used by the CRU. The power to introduce moratoriums on disconnections for electricity and gas is already vested in the CRU, under the EU legal framework and established in Irish law, in section 9 of the Electricity Regulation Act. The CRU imposes an annual winter moratorium each winter. ESB Networks and Gas Networks Ireland suspended disconnections between 9 December 2021 and 11 January 2022 on the direction of the CRU.

Three separate moratoriums on disconnections were imposed during the Covid-19 pandemic, between March 2020 and June 2021. In light of the fact that the power to impose moratoriums already resides with the CRU, and is exercised by it, I must indicate that there would be a cost involved for my Department in resourcing the new function that this Bill would create. It would entail the establishment of a new section to gather market data, provide analysis of those data, impose moratoriums and undertake enforcement. The undertaking of such a function would be a significant resource overhead for which additional funding would have to be sought. The CRU also has a range of measures in place to protect customers in debt or at risk of debt, including the requirement on suppliers not to disconnect customers in debt who continue to engage with them. We are seeing an historically low level of disconnection at present. However, levels of debt are increasing and this is the critical issue we must work together to address.

On 13 April, the Government published the national energy security framework. The responses it sets out include a further €100 fuel allowance payment, bringing the total fuel allowance payment for 2021-22 to a total of €1,139. It also includes a new targeted €20 million scheme for the installation of photovoltaic panels for households that have a high reliance on electricity for medical reasons; a reduction in VAT from 13.5% to 9% on gas and electricity bills from the start of May until the end of October; and the supporting of customers who do not find it easy to switch supplier to access a competitive rate for their energy.

Furthermore, response No. 6 of the framework sets out a package of measures to be implemented by the CRU to enhance protections for financially vulnerable customers and customers in debt by the third quarter of this year, ahead of the next heating season. These protections will ensure more manageable payment and debt repayment plans. The time for repayment will be extended for customers. Protection for financial hardship prepayment meter customers will be enhanced, and more manageable debt repayment will be ensured. Customers who are in debt will be on a metering or payment plan that is suitable for them and suppliers will proactively identify customers in debt who should not be on prepayment meters and help them find other options.

The involvement of NGOs will be optimised by ensuring all suppliers nominate specific contacts to support customers in debt. Protection from disconnection will be improved for all domestic customers. Greater awareness and uptake of supplier procedures for dealing with customers in or at risk of energy debt will be promoted.

We are well aware that energy prices have been rising for almost two years. These latest measures build on the sustained effort of Government to support energy consumers in the face of these rising prices. Budget 2022 introduced a number of supports for households, including increasing the weekly rate of the fuel allowance by €5 to €33, which meant that the most vulnerable received €914 before the additional payments I referred to.

In February, a suite of further policy measures, amounting to €505 million, was announced by the Ministers for Finance and Public Expenditure and Reform. It is designed to support households and mitigate the cost of living. The measures included the Electricity Costs (Domestic Electricity Accounts) Emergency Measures Act 2022, under which a once-off payment to domestic electricity accounts of €200, inclusive of VAT, is being made to every domestic electricity account. The scheme will have a total cost of €400 million. Following significant preparatory work, people are currently receiving this credit.

In March, the additional lump sum payment of €125 of the fuel allowance was paid to approximately 370,000 recipients. In terms of broader cost-of-living policy responses, as part of the February suite of measures, a reduction of €80 in the drug payment scheme was announced, as well as a 20% reduction in public transport fees from the end of April until the end of the year and a reduction in caps for school transport fees.

In addition to the wider package of energy efficiency supports available from the Sustainable Energy Authority of Ireland, changes have been made to the warmer homes scheme, which will see a significant increase in the number of free energy upgrades for those most at risk of energy poverty. That will change from 177 upgrades per month last year to 400 per month.

Moratoriums on disconnections are a critical tool to ensure the protection of the most vulnerable and prevent hardship. However, they must be part of a wider strategy in which we do as much as possible to help vulnerable citizens to avoid getting into this situation. I stress again that the power to impose moratoriums on disconnections is in place, is used by the CRU and will continue to be used. It is important that we consider this matter as part of the urgent work in train to strengthen supports for energy consumers ahead of next winter. However, it is a complex issue that spans a range of areas, from social protection to regulatory independence.

It is my strong view that the objective of the Bill is already being achieved. However, rather than opposing the Bill, the amendment seeks to allow time for the progressing of the measures set out in the national energy security framework that, along with the existing powers to impose moratoriums, will improve protections for financially vulnerable customers and customers in debt, while avoiding unintended consequences relating to accumulation of debt, encroachment on regulatory independence and duplication of functions across government and public bodies.

See this speech in context