Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I move: "That the Bill be now read a Second Time."

As we know, the high cost of energy brought on by the volatility in the wholesale gas market has had a significant impact on the cost of living for many people. While the price reductions announced by the main energy suppliers in recent weeks are welcome, the average price of electricity and gas is still significantly higher for households compared to pre-energy crisis levels and support is still needed for households. In this context, I am introducing this Bill, which will establish the electricity costs emergency benefit scheme III, under which a total of €412.83, excluding VAT, will be paid to domestic electricity accounts in three payments between this December and April 2024. This follows the success of the first two electricity costs emergency benefit schemes, which saw a total of €800, including VAT, applied to more than 2.2 million domestic electricity accounts between January 2022 and April 2023.

We have had the opportunity to learn from the previous schemes in 2022 and 2023. While the use of meter point registration numbers, MPRNs, allowed for a broad reach without application or means testing, it also meant some cohorts were not able to access the payment. For this reason, this Bill will also introduce a submeter support scheme to ensure payments reach people whose electricity is supplied via a submeter, who could not receive payments under the previous schemes.

Under the previous two schemes, the use of the single eligibility criterion of an MPRN also meant that credits may have been applied to domestic electricity accounts in vacant houses. Scheme III will see that payments are not applied to accounts which have extremely low usage levels indicative of vacancy. It is critical that the schemes this Bill will establish are put in place so that payments can begin from 1 December. I seek the support of the House in achieving this.

First, I will outline the main factors which affect electricity prices in Ireland. Second, I will provide an overview of the domestic response to the high energy prices. As Deputies will be aware, supporting people with cost-of-living pressures was a key focus of the budget this year. Finally, I will outline the Bill.

I will now turn to the first point, namely factors affecting Irish electricity prices. The war in Ukraine had a severe and immediate impact on energy prices due to sudden volatility in the wholesale gas market. However, prices had been rising steadily since the beginning of 2021, in the aftermath of Covid-19. In recent weeks, price reductions of between 9% and 30% were announced by a number of energy suppliers and this will be reflected in retail bills in the coming months. I acknowledge that electricity prices in Ireland are higher than in many other European countries at present. Retail prices are influenced by a number of factors, including wholesale energy prices and supplier hedging. In June, I wrote to the Commission for Regulation of Utilities, CRU, to request that a review of the pricing and hedging strategies be carried out to ascertain if there have been any market failures, particularly in the case of vulnerable customers. The CRU reported in September 2023 that it found no evidence of market failure in the retail markets and that it will continue to monitor this.

As Deputies will be aware, work is ongoing in my Department to implement the Council regulation to address windfall gains in the energy sector. The proceeds raised by the cap on market revenues will be used to support final electricity consumers, in line with Article 10 of the Council regulation. The estimated proceeds for the market cap are between €80 million and €150 million. It is a key priority of the Government that households are supported during this time of high prices, especially those who are more vulnerable or most at risk of energy poverty.

Turning to the actions the Government has taken to support people, particularly with the cost of energy, budget 2024 introduced a €2.2 billion suite of once-off cost-of-living supports to assist families, pensioners, carers and people with disabilities. This includes three electricity cost emergency benefit payments, paid to 2.237 million domestic electricity accounts; a lump sum of €300 to all fuel allowance recipients in November of this year; lump-sum payments to recipients of the fuel allowance and other social protection payments in November of this year; a double payment of the child benefit in December of this year; and a 100% Christmas bonus in December of this year. This follows the €1.3 billion package of temporary supports announced in the spring.

I want also to draw attention to the additional needs payment operated by the Department of Social Protection. Any person in need of additional support, including support with energy bills, may apply for an additional needs payment. Every effort will be made to ensure qualifying applicants receive an additional needs payment on the same day or as soon as possible where it relates to electricity and heating expenses. The record allocation for my Department in this budget demonstrates the Government's commitment to achieving a climate-neutral, sustainable and digitally connected Ireland.

The energy poverty action plan, introduced in December 2022, set out a range of measures to ensure those least able to afford increased energy costs would be supported and protected to heat and power their homes adequately. The implementation of this is being monitored by a cross-departmental steering group, chaired by my Department. Following the inaugural energy poverty stakeholder engagement forum, a revised energy poverty action plan that will be brought to the Government in quarter 1 of 2024 will set out further measures to support households in and at risk of energy poverty. Our key concern is to protect the most vulnerable. The range of measures introduced in budget 2024 will ensure this support and protection continues in the winter of 2023 and 2024.

The regulator has an important role in consumer protection. In September, the CRU announced that the winter moratorium for all bill-pay customers would be extended to run from 1 December 2023 to 31 January 2024. This follows its announcement of specific customer protection measures for winter 2023 to strengthen the existing protections. The promotion of the vulnerable customer register by the CRU, my Department and electricity suppliers last year led to a 33.3% increase in the number of those registered in January 2023. These immediate actions are vital, but we must also look to the long-term approach for Ireland in the context of energy efficiency, renewable energy and consumer empowerment.

We are committed to leaving no one behind in the move to a low-carbon future. Our budget for next year includes record funding of €380 million for Sustainable Energy Authority of Ireland, SEAI, residential and community energy upgrades, including the solar PV scheme. This €24 million increase on last year means more funding than ever before will be available to make homes warmer, healthier, more comfortable and less expensive to heat. This will be supplemented by additional funding from the European Regional Development Fund to support next year’s programme of energy upgrades for households at risk of energy poverty. The Government's decision in May of this year to apply a 0% VAT rate boosted the installation of domestic solar panels throughout the country, with more than 21,000 households expected to receive support this year.

Turning to the subject matter of the Bill, it will provide for the establishment of a scheme for the purpose of making electricity cost emergency benefit payments of €137.61, excluding VAT, to domestic electricity accounts, to be paid in December of this year and in the January-February and March-April 2024 billing cycles. This scheme is broadly similar to those that operated in 2022 and 2023, with one significant change. As part of the scheme, domestic electricity accounts with very low usage, namely, 150 kW per quarter for four consecutive quarters, will not receive the payment unless the account is held by a customer who is a registered vulnerable customer, who has a financial hardship meter, which is a meter installed for customers who are in financial difficulty, or who is engaging in microgeneration.

I am aware Deputy O’Rourke sought to introduce a similar provision to the second scheme last year but, given the time constraints involved and the emergency nature of the legislation, this was not possible. Following the introduction of the vacant homes tax and engagement with ESB Networks on typical household usage levels, this measure has been developed. The consumption threshold set here closely aligns with the criteria used by Revenue to determine property vacancy. By reducing the limit to 150 kW per quarter, however, we will ensure eligible houses are not inadvertently excluded. I reiterate that where an account holder is a registered vulnerable customer, has a hardship meter or is engaging in microgeneration, payments will not be withheld. We will not prevent the payment from reaching people who need it.

The Bill will provide a review function for suppliers. If contacted by a customer who has not received the payment, the supplier will be able to review this and apply the payment if the customer is a registered vulnerable customer, is eligible to be on the vulnerable customer register or has a financial hardship meter. The moneys for the scheme will be allocated by me as Minister for the Environment, Climate and Communications, with the consent of the Minister for Public Expenditure, National Development Plan Delivery and Reform, out of moneys provided by the Oireachtas. The sum will not exceed €1.007 billion. The Commission for the Regulation of Utilities will provide oversight of the scheme and it will be operated by the distribution system operator, DSO, ESB Networks and electricity suppliers.

The mechanism by which the scheme will operate is as follows. I will, under regulations, provide for a date, to be known as the relevant date, on which the distribution system operator will calculate the total number of domestic electricity accounts in the State, on the basis of meter point registration numbers, MPRNs. The DSO will also calculate the total number of low-usage electricity accounts, including the number held by registered vulnerable customers, people with hardship meters or people who are engaged in microgeneration. ESB Networks will notify me of these numbers and this will allow the estimation and necessary allocation of moneys for the scheme. On the effective dates for each payment period, which will be set out in regulations, ESB Networks will notify each electricity supplier of the assigned MPRN for each domestic electricity account it supplies. They will also alert suppliers of the assigned MPRN for each domestic electricity account with low usage that is not held by a registered vulnerable customer, a customer with a hardship meter or a customer engaging in microgeneration.

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