Gerald Nash (Louth, Labour) | Oireachtas source

I welcome the opportunity to speak on this motion. We in the Labour Party support it wholeheartedly. After a sustained period of record rises, electricity prices are starting to fall but remain at around double what we might term "normal levels". Citizens are really suffering. They are struggling. I have lost count of the number of occasions during the last two years where people have presented me with their electricity bills or grocery bills expressing their concern about the impact it is having on them and their families.

According to bonkers.ie, it is likely the cost of gas and electricity will fall by approximately another 10% to 15 % over the coming weeks. Wholesale energy prices have eased over the past year or so and this fall is now being passed on, to a point, to consumers, although wholesale prices still remain around double the historical levels.

Since last September all the main energy suppliers have cut their prices twice amounting to a punitive reduction of around 20% to 25% for most households but I add this rider that it is from a very high base indeed.

At the time when the trend in prices is starting to at least edge downwards the CRU is ready to make an untimely and unwelcome intervention with plans, it seems, to introduce a PSO levy of €40 per annum per household. The PSO levy has been set at zero in recent times and for good reason. I do not believe the recent downward trend in prices is enough to see that policy reversed, certainly not just yet. This motion calls for new powers for the CRU but I ask that it exercises a power it already has and delay imposing the PSO levy, at least until prices are much lower.

Most of the high costs shouldered by homes and businesses here are down to regulators which do not have the interests of consumers at heart. They are simply, in most cases, nodding dogs for business. They are signing off on big increases for business and they are letting consumers go whistle. That is an unfortunate reality for consumers in this country. We need to absolutely review and change the regulatory framework and the culture of regulation in this country. Our regulators in this country need to stand up for consumers and that has not been the case across the spectrum of regulated entities and utilities in this country and that needs to change.

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There are other potential obstacles in the road that may prevent electricity prices from continuing to trend downwards, including a possible hike in network fees paid to EirGrid and Gas Networks Ireland for the upkeep of the network. If that happens, no doubt the energy companies will be quick to pass on the cost to households. Almost a third of our energy bills are made up of network costs. The CRU sets the amount that EirGrid and Gas Networks Ireland can charge suppliers and will set a new rate this autumn. The Minister's Department needs to be watchful in this regard.

There is the prospect of a VAT increase or at least a reversal of the VAT cut we saw in May 2022. With prices still around 70% to 80% more than what they were three years ago, I urge the Government to keep the lower rate of VAT on electricity in place for at least one more budget cycle and to keep that under review. Reversing the VAT cut this year could add around €65 a year to the average electricity bill and a further €55 a year to gas bills.

Standing charges have long been an issue in the domestic energy market and frankly they have got out of control in recent years. The most recent trend with standing charges is downwards. I welcome this motion's attempts to impose a more long-term regulatory structure on the charges through the CRU. No one can avoid standing charges, regardless of how little energy householders or businesses use. The main issue with standing charges is that they are, by definition, regressive. They are imposed regardless of the amount of energy used or the income of the household and pay no attention to the principle that the polluter pays. They are a blunt instrument and seemingly set arbitrarily by the energy companies at whatever level suits them. It is right that the CRU be given explicit powers to regulate in this space. To the best of my recollection, Deputy O'Rourke had a Bill in this regard last year.

While Irish households are now seeing cuts in their electricity bills, those bills remain, as we know, the second highest in Europe. There has been an undeniable lag in the passing on of falling wholesale gas prices to domestic electricity customers. This motion calls for the breaking of the link between wholesale gas prices and the setting of electricity prices so that price reductions can be delivered quicker. Right now, the Irish consumer is subject to the vagaries of hedging and is paying the price for electricity that was set by the wholesale rates paid by suppliers months or even a couple of years ago.

Of course, another way to break that link in the longer term is to decrease our reliance on gas to generate electricity in the first place and to invest much more in sustainable alternatives. One of the principal sustainable alternatives we believe Ireland can excel at is offshore wind. To his credit, the Minister has been a significant promoter of not just the concept of offshore wind but of ensuring we have the framework in which that happens. Is that really the moonshot moment that the former Taoiseach, Deputy Leo Varadkar, referred to? Are we really capitalising on that in the way that we should be and introducing the kind of infrastructural supports that are required to service the offshore wind industry when it finally becomes an industry of scale?

I will give the Minister a case in point. The Minister will be aware that the Drogheda Port Company is embarking on a very substantial project at framework at Bremore, between Drogheda and Balbriggan. One of the principal aims of that project is to, in the future, service what we hope will be a burgeoning and expanding offshore wind industry. The Minister knows well that these are the sustainable jobs of the future, but we are not putting the investment in place at the moment, and I do not believe we have sufficient imagination to allow companies like Drogheda Port Company to plan for the future and provide the infrastructure needed to service an industry that is sustainable and can provide the jobs of the future.

Energy poverty is a real crisis in Ireland and working people are really struggling to make ends meet. The disparity between Ireland's apparent economic success on paper and the stark reality faced by households struggling to keep up with historically high household bills is deeply concerning. The lived experiences of families grappling with energy poverty cannot be dismissed or overlooked. We cannot ignore the fact that a significant portion of our population is grappling all the time with the reality of energy poverty. They are making decisions every week on whether to heat the house, feed themselves or clothe their children. They are not decisions that any family in a rich society should have to make. The Government must step up and prioritise measures to alleviate this burden on households and small businesses. We need policies that ensure affordable access to energy for all, irrespective of economic background. I appeal to the Minister this year not to repeat the trick of so-called once-off payments to homes that objectively do not need them. We need to ensure that we target the resources we have at the families who need those resources the most. It is a moral imperative. It is a matter of social justice to safeguard those vulnerable households and businesses from the harsh realities of energy insecurity.

The big energy companies, as has been said by several contributors throughout this evening's debate, have made eye-watering profits in recent years on the back of hard-pressed consumers who are overpaying for energy, but we have not continued with the windfall tax that was imposed some time ago on the excessive, supernormal profits of energy companies. That is something that I think we will need to revisit. There is currently the illusion that normality is returning to the market but the fact is that prices are still close to twice what they were just a few short years ago. I hope the Minister agrees that is anything but normal. It is time for the Government and its regulatory watchdogs to get proper hold of the energy sector with a focus on protecting consumers from price gouging and profiteering, and insulating families in this country from the scandal and scourge of energy poverty.

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