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

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following: "acknowledges the Government's response to the significant increases in energy prices for households and businesses due to the Russian invasion of Ukraine;

notes that:

— the European Council Regulation (EU) 2022/1854 provides for a cap on market revenues in the electricity sector and a temporary solidarity contribution based on taxable profits in the fossil fuel production and refining sectors;

— on 22nd November, 2022, the Government announced the decision to introduce measures to address windfall gains in the energy sector through the implementation of European Council Regulation (EU) 2022/1854 on an emergency intervention to address high energy prices;

— a general scheme of this legislation was approved by Government on 21st March, 2023, and the legislation to implement this Government decision is currently being drafted;

— the Government decided to set a cap of €120 per megawatt hour (MWh) for wind and solar, which goes further than the EU Regulation of €180 per MWh in order to fully capture windfall gains, whilst maintaining appropriate future investment signals, and the excess revenue will be collected and used to support electricity consumers;

— the cap on market revenues will operate from December 2022 to June 2023 inclusive, as set out in the Council Regulation;

— the Government has decided to implement the temporary solidarity contribution of Council Regulation (EU) 2022/1854 on fossil fuel production and refining companies that earn unexpected surplus profits in 2022 and 2023;

— the Government has decided to implement the temporary solidarity contribution to apply to taxable profits which are more than 20 per cent above the baseline period from 2018 to 2021, which will be subject to a rate of 75 per cent, and losses from previous years will not be considered in the calculation of the taxable profits; and

— the proceeds to be collected from the implementation of European Council Regulation (EU) 2022/1854 are estimated at circa €280 million to circa €600 million, however the proceeds are highly dependent on the level of wholesale gas prices over the coming winter;

further notes that:

— the Government introduced a €2.4 billion package of supports during 2022, and an additional package of once-off measures worth €2.5 billion was included in Budget 2023;

— in February, the Government announced a €1.2 billion package to help families, businesses, pensioners, carers and people with disabilities, including:

— families with children will receive a bonus Child Benefit payment of €100 per child in June;

— a once-off €100 increase in the Back to School Clothing and Footwear Allowance in July;

— the Hot School Meals programme will be extended to all primary schools in the Delivering Equality of Opportunity in Schools programme from September, benefiting 64,500 children;

— a second lump sum of €200 will be paid in April to people on the Working Family Payment, lone parents, low-income families, carers, those on disability payments, and pensioners among others;

— lower Value Added Tax (VAT) and excise rates will continue to apply on gas, electricity, petrol, diesel and Marked Gas Oil until October;

— simplified application process for the Temporary Business Energy Support Scheme (TBESS) and the level of relief has been increased to 50 per cent of the cost of eligible energy bills; and

— the 9 per cent VAT rate for hospitality is extended to August;

— in April and May 2022, 99 per cent of eligible domestic electricity accounts were credited with the first Electricity Costs Emergency Benefit Payment of €176.22 excluding VAT, with the total cost of this scheme being just under €377 million and this was of benefit to over 2.1 million households;

— under the second Electricity Costs Emergency Benefits Scheme, the first of three further €200 electricity credits was applied before Christmas, the second payment was credited to bills in the January/February billing cycle, and the final payment of support was applied during the March/April billing cycle;

— as of 6th January, 2023, the number of domestic electricity accounts in receipt of their first credit was 2.15 million meaning 99.1 per cent of all eligible customers have now had the credit applied to their account;

— combined with the first Electricity Benefit Scheme, over 2.1 million households will have automatically received €800 of income support through their electricity bill at a total cost of €1.59 billion between Q2 2022 and Q2 2023;

— this is in addition to increased funding for supports such as the Fuel Allowance, reduction of VAT on gas and electric bills, reduced excise duty on petrol and diesel and a total allocation of €267 million (of which €202 million is carbon tax receipts) to Sustainable Energy Authority of Ireland (SEAI) residential and community schemes, including those targeting households at risk of poverty in 2022;

— in 2023, a total of €235 million will be spent on SEAI dedicated energy poverty schemes and Local Authority retrofits, and this funding will target 6,000 free upgrades under the Warmer Homes Scheme and a further 2,400 B2 retrofits of Local Authority homes next year;

— separate to the Fuel Allowance scheme, the Department of Social Protection pays an electricity or gas allowance under the household benefits scheme and a further €203 million will have been spent on the scheme in 2022, and over 483,000 households have been expected to benefit from this;

— in 2022, 4,438 free upgrades were provided to homes at risk of energy poverty through SEAI's Warmer Homes and Warmth and Wellbeing schemes;

— the Commission for Regulation of Utilities (CRU) ended its regulation of retail prices in the electricity market in 2011, and in the gas market in 2014, and given that prices are no longer regulated, they are set by suppliers as entirely commercial and operational matters by them, with each company having its own different approach to pricing decisions over time, in accordance with factors such as their overall company strategic direction and developments in their cost base;

— the CRU further extended the moratorium on disconnections for all bill-pay customers until the end of March 2023, and this is in addition to the strengthened consumer protection measures announced last September which are now all in place, and these measures include a stipulation that suppliers must offer payment plans of up to 24 months; and

— the Energy Poverty Action Plan, launched in December 2022, provides for the establishment of a €10 million fund to further support people in, or at risk of, energy poverty and provide a further safeguard to help people who may not be able to access other sources of assistance such as the supplier hardship funds, or the Additional Needs Payment scheme operated by the Department of Social Protection, while the Department of Environment, Climate and Communications are working to establish this fund in advance of winter 2023/24;

further acknowledges that:

— carbon tax will see an annual increase of €7.50 per tonne each year to 2029, then €6.50 in 2030, and this will raise an estimated €9.5 billion over that period, money to support those at risk of energy poverty, as well as retrofitting programmes, agri-environmental supports for farmers and the Just Transition Mechanism fund, and in particular, the rate of carbon tax went up from €41.00 to €48.50 per tonne on 1st May, 2023;

— analysis shows that the least well off in society would do worse if the carbon tax was cancelled or frozen, for example, the carbon tax has supported increases in and the expansion of the Fuel Allowance scheme which benefitted more than 400,000 households this winter;

— monies raised also support the National Retrofit Plan, to help families permanently reduce their heating bills, and of the €337 million allocated for retrofitting in Budget 2023, €291 million has being ring-fenced from carbon tax receipts, with over half of this being spent on free retrofits for low-income homes; and

— carbon tax receipts also provide funding to support farmers to farm in a greener and more sustainable way (under agri-environmental schemes), and it is being used to support projects under the Just Transition Mechanism fund specifically, supporting new jobs, new green energy, better public transport and community development and enterprise in the midlands;

recognises that:

— the CRU was established as an independent statutory regulator by the Electricity Regulation Act 1999 and enhanced under the Gas (Interim) (Regulation) Act 2002 and the Water Services (No.2) Act 2013, and is responsible for:

— regulation and reform of the electricity market, including the licensing of new entrant generators and suppliers;

— regulation of the natural gas market;

— security of supply, customer protection, upstream and downstream gas and electrical safety; and

— economic regulation of water services;

— the CRU is legally independent in the performance of its functions and is entirely accountable to the Oireachtas for such performance, and is funded by means of a levy on electricity and gas undertakings and income from licensing fees, and the Department of Environment, Climate and Communications will provide €689,000 in Exchequer funding in 2023 to provide for the regulation of district heating in Ireland;

— with regard to resourcing, approval has been given, in full, for the Commission's three-year workforce plan, representing 74 new whole-time equivalent positions, which include an additional director to meet its objectives under the Strategic Plan 2022-2024;

— the most significant factor affecting retail electricity and gas prices in Ireland is the wholesale price of gas, and while wholesale prices have reduced from their peak in August 2022, due to supplier hedging strategies, it may take a more sustained period of reduced wholesale prices before retail prices reduce;

— the electricity and gas retail markets in Ireland operate within a European Union (EU) regulatory regime wherein electricity and gas markets are commercial, liberalised, and competitive, with prices in the electricity and gas retail markets having been fully deregulated since 2011 and 2014;

— price setting by electricity suppliers, including standing charges is a commercial and operational matter for the companies concerned, with each such company having its own different approach to pricing decisions over time, in accordance with factors such as their overall company strategic direction and developments in their cost base;

— as part of its statutory role the CRU also has consumer protection functions and sets out a number of rules for suppliers to follow in the Electricity and Gas Suppliers Handbooks, and these include special provisions for vulnerable customers around areas such as billing and disconnections; and

— the CRU also oversees the supplier-led voluntary Energy Engage Code under which energy suppliers will not disconnect a customer who is engaging with them, must provide every opportunity to customers to avoid disconnection, must identify customers at risk of disconnection and encourage them to engage and are obliged to offer a range of payment options, such as a debt-repayment plan to those in arrears; and

further recognises that:

— in January the European Commission launched a public consultation on the reform of the EU electricity market design to better protect consumers from excessive price volatility, support their access to secure energy from clean sources, and make the market more resilient, and it will involve making amendments to a number of current EU legislation Regulations and Directives;

— the consultation closed in mid-February and the Commission published a suite of legislative proposals on 14th March, and Ireland is engaging with this programme of work with a view to, among other things, maintaining the integrity of the all-island Single Electricity Market;

— the new TBESS will support eligible companies, covering 40 per cent of the increase in their energy bills;

— the scheme was due to expire on 28th February, however, as the impact of higher energy costs continues to be keenly felt by businesses across the country, the scheme was extended to 30th April, 2023, and the monthly limit on aid under the scheme was increased from €10,000 to €15,000 per qualifying business in relation to a trade or profession, subject to an overall cap of €45,000 in cases where a business is carried on from more than one location, and these enhanced limits will apply for claim periods from 1st March, 2023;

— in April 2022, CRU wrote to Eirgrid and ESB Networks notifying them that it would unwind the Large Energy Users (LEU) rebalancing subvention with effect from 1st October, 2022, and the Network tariffs had been rebalanced since October 2010, in favour of LEUs, following a 2009 Government decision;

— the 2009 Government decision was made to help safeguard jobs in some of Ireland's most-critical and export-orientated industries, at a time when unemployment was rising at a fast rate;

— the impact of the decision to unwind the rebalancing is estimated to reduce an average domestic customer's annual bill by €40; and

— following the introduction of Network Tariffs for the period October 2022 to September 2023, including the unwinding of the LEU rebalancing, and the CRU decision to bring the Public Service Obligation levy to a negative value, domestic customers and small commercial customers are expected to see a small decrease in overall network costs when compared to last year."

I thank all Deputies, particularly Deputy Joan Collins. I welcome this debate on support for energy bills. One question that came up a number of times related to the timetable for introducing a windfall tax on unfair profits. The legislation is currently with the Oireachtas joint committee for pre-legislative scrutiny. It will be enacted by the summer recess. This timetable is in line with those of other EU member states.

I acknowledge the pressure that has been put on people and businesses by unprecedented high energy prices. The most significant factor affecting retail energy and gas prices is, of course, the wholesale price of gas. The Commission for the Regulation of Utilities was established as an independent statutory regulator by the Electricity Regulation Act 1999. It ended its regulation of retail prices in the electricity market in 2011 and in the gas market in 2014. Consistent with the European energy regulation process, the electricity and gas markets in Ireland are commercial and price setting by electricity suppliers is a commercial and operational matter for the companies concerned.

Providing supports to alleviate high prices is a priority for this Government and intensive work has been undertaken, and will continue to be undertaken, to address the challenges faced by consumers. Energy prices are being monitored and Departments are working to support households and businesses to meet their energy costs. As my colleague, the Minister, Deputy Eamon Ryan, outlined, the Government introduced a suite of measures worth €2.4 billion in 2022. These were to assist households with their energy costs. Budget 2023 provided a further €2.5 billion in once-off measures to support households with the rising cost of living. The measures in budget 2023 included a €400 lump sum for fuel allowance recipients and a €200 lump sum for pensioners and people with a disability who were getting the living alone allowance. A €500 cost-of-living lump sum payment was made to all families getting the working family payment and a double payment of child benefit was made to support all families with children. A €500 cost-of-living payment for people receiving a carer's support grant was paid in November and a €500 lump sum cost-of-living disability support grant was paid to all people receiving a long-term disability payment. In February, the Government announced a further €1.2 billion package to help families, businesses, pensioners, carers and people with disabilities to cope with the cost-of-living pressures.

In April and May of last year, 99% of eligible domestic electricity accounts were credited with the electricity costs emergency benefit payment of €200. The total cost of this scheme was just under €377 million. This was of benefit to an extraordinary number of households. Under the second electricity costs emergency benefit scheme, the first of three further €200 electricity credits was applied before Christmas. The second payment was credited to bills in January and February and the last payment in the March-April billing cycle. In January, the number of domestic electricity accounts in receipt of their first credit was 2.15 million, meaning that 99.1% of all eligible customers had the credit applied to their account. Combined with the first electricity benefit scheme, more than 2.1 million households will have automatically received €800 of income support through their electricity bill at a total cost of €1.59 billion between the second quarter of 2022 and the second quarter of this year. The Government has also reduced VAT on gas and electricity bills and increased funding for supports such as the fuel allowance. It has reduced excise duty on petrol and diesel and allocated a total of €267 million, of which €202 million comprises carbon tax receipts, to the Sustainable Energy Authority of Ireland residential and community retrofit schemes. These measures targeted households at risk of energy poverty in 2022.

The energy poverty action plan was published in December 2022 in response to rising energy prices and sets out a range of near- and medium-term income, social protection and consumer protection support measures. This plan provides for the establishment of a €10 million fund to further support people in or at risk of energy poverty into 2023. Officials are working to ensure this fund is operational in advance of the winter of 2023-24.

The temporary business energy support scheme was due to expire on 30 April. However, as the impact of higher energy costs continued to be felt by businesses across the country, the scheme was extended until the end of May 2023. The monthly limit on aid under the scheme was increased. It was €10,000 but went up to €15,000 per business in relation to a trade or profession, subject to an overall cap of €45,000 in cases where a business is carried on from more than one location.

The Government will implement Council Regulation (EU) 2022/1854. This seeks to address windfall gains in the energy sector by collecting excess revenues from those companies that have unexpectedly benefited from high energy prices and redistributing those revenues to alleviate pressure on affected energy consumers. I confirm that any money raised out of windfall taxes will be ring-fenced for energy customers. The proceeds from the implementation of this Council regulation, including the temporary solidarity contribution from fossil fuel companies and the cap on market revenues in the electricity sector, can be used to provide financial supports to households and companies heavily affected by soaring energy prices.

I will now move on to carbon tax. Where do the revenues from carbon taxes go? Half of the money raised from carbon taxes goes to targeted retrofitting programmes aimed towards those in energy poverty. One third of the money that comes from carbon taxes goes towards increasing welfare payments. Those welfare payments have been selected to target people living in energy poverty. The remainder of the money is used to support agricultural schemes for farmers and the just transition.

Every penny raised from the carbon tax is then redistributed according to those ratios.

In summary, providing support to people and businesses affected by the unprecedented high energy costs remains a key priority for Government. I welcome this debate and I thank Deputies from all sides for their contributions.

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