Peter Fitzpatrick (Louth, Independent) | Oireachtas source

This week the Government has chosen to increase the carbon tax, which has increased the cost of home heating oil, peat briquettes and natural gas for household use. At times last year, the daily price of generating electricity in Ireland was more than 12 times higher than normal. Annual household electricity bills doubled from a typical €1,000 per year in 2020 to more than €2,000 per year. While other EU countries opted for various measures such as price caps, reducing taxes and fees and giving temporary tax waivers to ease the burden on consumers, our Government shielded homes via a €600 credit. It failed to set a national cap on the unit price of electricity, which resulted in energy spending displacing food spending as the top household outgoing, forcing people to choose between heating or eating.

Although we may not see a fresh round of increases, bills are still high, despite wholesale gas and electricity prices falling, indicating that there has been no effort to pass this reduction on to consumers. Latest figures from EUROSTAT show that electricity prices in Ireland are a staggering 48% above the EU average, behind only Denmark and Belgium. This means the average household in Ireland is paying more than €550 extra a year for their electricity compared to the EU average. It is not an exaggeration to say that households are living in fear of their next energy bill. They are out the door with bills. Dozens of constituents call to my clinics weekly with utility bills that have doubled, often despite the fact that usage over the winter months this year was significantly down on 2021-22. With regard to prices, vulnerable constituents and energy poverty, my office is acutely aware that the exceptionally high wholesale gas prices have led to unprecedented increases in electricity and retail gas prices faced by consumers. This has resulted in a significant increase in the number of people at risk of fuel poverty. The number has doubled over the past year and was reported to be at a record-breaking high of 40% at its peak. Given the energy price crisis households are facing, every line of their bills must be tackled.

Reform of the energy market is needed. We need to pass on any price reduction to consumers and put limits on the profits that huge energy companies are making. Legislation addressing windfall gains was not introduced until late March, despite a European Council regulation coming into effect last October. At present it is still at pre-legislative scrutiny whereby there is no regulation addressing the periods where these companies were at their peak profit in 2022. This needs to be actioned and rectified immediately. It is wrong to receive extraordinary record profits benefiting from war and on the back of consumers but this is where we are at.

On top of this, price caps at pre-Ukraine war levels need to be implemented to provide financial relief and certainty to households. Last September, myself and my colleagues in the Regional Group called for the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, to secure EU-wide agreement for the decoupling of the link between gas prices and electricity prices. Last October, I stated that without a price cap the average energy bill will continue to rise, increasing fuel poverty and causing financial hardship and stress. The CRU indicated that of the 690,000 who rely on gas to heat their homes, 139,785 were in arrears at the end of December, increasing to 152,276 by the end of February this year. That figure only tells part of the story because many more are simply going without gas, self-disconnecting, because they cannot afford it. Vulnerable households must be provided with the support they need to keep their homes warm. I reiterate the need for a price cap on energy along with the decoupling of the link between gas prices and electricity prices.

Finally, there is a strong correlation between those who live in well-insulated homes and those who do not have the same struggles with energy costs. However, families who cannot afford to pay their energy bills are not in a position to invest in expensive retrofitting measures. For example, rental properties tend to have larger numbers of older, low-energy buildings, yet the Government's plan to retrofit 500,000 homes by 2030 excludes many groups and communities who are most at risk of energy poverty. I acknowledge that €118 million of the SEAI retrofit and solar schemes has been allocated to energy poverty schemes, as well as €85 million funding for the local authority energy efficiency retrofit programme. However, there is a significant need to ramp up retrofitting supports to the relevant vulnerable people and remove the red tape to ensure retrofitting is made available and accessible to all households. Overall, we need to reform the energy market by imposing windfall tax on profiteering energy companies while looking after the most vulnerable who are susceptible to energy poverty. This can be achieved through the implementation of all-consuming legislation and price caps to regulate the market while removing any barriers to retrofitting rental apartments and homes, protecting and prioritising households that are most in need. Serious problems with retrofitting and energy-efficiency programmes, including waiting lists of up to three years for the SEAI’s free energy upgrade scheme, as well as a major labour and skills shortages, need to be considered and rectified.

See this speech in context