Bernard Durkan (Kildare North, Fine Gael)
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Question 5: To ask the Minister for Communications; Energy and Natural Resources the extent to which he has been apprised of proposed gas and electricity price increases; the reasons given for such proposed increases; the extent to which an evaluation has been done as to the negative impact of any such increases on the economy with particular reference to job creation, job retention and competitiveness; if he will use his influence with the regulator and the service providers with a view to deferring any such proposals; and if he will make a statement on the matter. [23933/11]

Catherine Murphy (Kildare North, Independent)
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Question 13: To ask the Minister for Communications; Energy and Natural Resources the measures available to him to address the continuing escalating cost of energy; if he has or intends to have discussions with the energy suppliers; if so, the outcome of same; and if he will make a statement on the matter. [23880/11]

Pat Rabbitte (Dublin South West, Labour)
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I propose to take Questions Nos. 5 and 13 together.

I do not have a statutory function in the setting of energy prices, whether in the regulated or unregulated market. Responsibility for the regulation of the electricity and gas markets is a matter for the Commission for Energy Regulation, CER, which is an independent statutory body. Ireland's electricity and gas markets, both wholesale and retail, are characterised by vigorous competition regulated by the CER. Prices in the retail electricity market are now fully deregulated. From 1 October, gas residential consumers will be the only segment of the electricity and gas markets where prices will be regulated. Prices in the electricity market and unregulated part of the gas market are wholly a commercial and operational matter for the suppliers.

The recent CER decision to approve a 21.7% increase in the Bord Gáis tariff from 1 October is the first price increase for Bord Gáis's residential gas customers since September 2008. It follows three successive price cuts approved by the CER. There have also been recent announcements by suppliers of electricity price increases.

The driving factor in these increases, and the point of Deputy Durkan's question, is the trend in international gas prices during the past year, which looks like continuing into the future. Wholesale gas prices for the coming winter will be more than 30% higher than they were last winter. Ireland is a price-taker in the global fossil fuel market and the economy, therefore, is vulnerable to energy price fluctuations and price rises.

Suppliers in neighbouring markets are also subject to similar pressures and price increases. Last May, Phoenix Gas in Northern Ireland announced an increase of 39% in domestic and small business tariffs. The big six gas suppliers in Britain have also increased domestic tariffs by 17% to 18%, following on from increases some months previously.

The Government is committed to competition as a way of exerting downward pressure on prices. Competition is achieving competitive pressure on suppliers. It stimulates them to offer better deals and discounts. Business and domestic customers can, therefore, increasingly avail of the competitive offerings from electricity and gas supply companies active in the retail end of the market. The first step that customers should take to reduce their energy costs is to work actively in securing better value offers in the market and in switching to suppliers delivering lower prices.

Actions taken in the two years prior to the end of 2010 improved Ireland's competitiveness in the gas and electricity sectors when compared with other European countries. Analysis by the Sustainable Energy Authority of Ireland, SEAI, of EUROSTAT data for the second half of 2010 shows that, for large business customers of electricity, Irish prices were between 91 and 93% of the eurozone average while prices for small to medium-sized business customers ranged from 4% below the average to 6% above, depending on the category. Gas tariffs remain competitive with business tariffs at 83% to 90% of the eurozone average. Increased competition has clearly had an impact.

In addition, we must focus on all possible additional actions to mitigate costs where possible for business and domestic customers. This is essential for competitiveness, employment and for economic recovery. I am committed to working with enterprise and with the energy sector to ensure that the costs of energy for business are as competitive as possible through those measures at our disposal. I urge all businesses of whatever size to place a relentless focus on energy efficiency. The SEAI is available to provide advice and, subject to available resources, financial assistance in this respect. In addition, there is extensive tax relief available to businesses.

Bernard Durkan (Kildare North, Fine Gael)
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I thank the Minister for his very comprehensive reply. Notwithstanding that, does he agree that energy price increases are never welcome, particularly in the winter and on foot of the current economic difficulties, which were, of course, not the responsibility of the current Government? Is it possible to monitor the impact of increases on both the domestic and commercial sectors as we approach the time of peak energy use, namely, wintertime? Arising from anything that might emerge, would it be possible at least to enter into dialogue with ComReg to ensure we do not allow circumstances whereby both industry and the domestic sector will be severely punished or disadvantaged arising from the proposals?

Pat Rabbitte (Dublin South West, Labour)
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I agree with the Deputy that the last thing one wants to hear about heading into the winter is an increase in energy prices. I acknowledge that and that some will be more severely affected than others. It is for this reason that I was happy to be able to negotiate with the energy companies an arrangement whereby no family in distress will be disconnected this winter provided it participates in a payment plan or agrees to have installed a pay-as-you-go meter. I hope this gives some comfort to some people who will be in difficulty.

With regard to monitoring the impact, it is a condition of the memorandum of understanding that there be a review of energy efficiency in the economy. This will be conducted by the International Energy Agency and it is likely to commence before the end of September. The agency is a reputable international body.

Barry Cowen (Laois-Offaly, Fianna Fail)
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Will the price be reduced?

Pat Rabbitte (Dublin South West, Labour)
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Let us see. At least conclusions will be drawn as to whether there is an efficient energy sector operating in this economy.

Catherine Murphy (Kildare North, Independent)
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I attended a briefing by the Society of St. Vincent de Paul last week in Buswells Hotel. The society has produced a major report, one of the findings of which points to the significant pressure on people at home all day, particularly the elderly, owing to the cost of energy. We heard about people who are choosing to go to bed at 7 p.m. so as not to have to sit up and shiver.

Those who are least likely to be able to shift from one company to another are those in arrears because the new rules appear to suggest one cannot move from one company to another and leave one's arrears behind. People in this category do not have the scope of those who can pay their bills.

Let me outline my motivation for my question and also the question I really want to ask. Competition between the energy providers is internal. Bearing in mind that this is a very small country, is there any question of a more collaborative approach between the energy providers in terms of purchasing, such as that adopted by the National Treasury Management Agency in negotiating a better currency arrangement? There is no point in telling someone there has not been any increase since 2008 and that there have been decreases, because an increase of 22% is horrific for people under serious pressure.

Michael Kitt (Galway East, Fianna Fail)
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We are very short on time.

Pat Rabbitte (Dublin South West, Labour)
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Yesterday evening I told the Joint Oireachtas Committee on Communications, Natural Resources and Agriculture that I was in the process of bringing to the Government a memorandum on an affordable energy strategy. For some months, very active work has been done by the Department and the Departments of Social Protection and the Environment, Community and Local Government on the question of affordable energy and fuel poverty. I expect to be in a position to make this public this month.

With regard to the question of advocacy by the Society of St. Vincent de Paul on switching, Deputy Murphy is correct that the national figures show 43% of customers switch. However, for the segment which benefits from the home benefits package the figure is approximately 16%. This is one of the matters about which I am speaking to my colleague, the Minister for Social Protection, with regard to the systems in her Department as they relate to the energy companies and the capacity to remove any barriers to allow this category of the population to switch with equal facility as those not in receipt of State aids.

However, I must make a point on arrears. The Society of St. Vincent de Paul, and similar organisations such as MABS, make representations to us to state we ought to address this issue because a significant amount of debt-hopping takes place. Somebody runs up a bill for six to nine months and, as bills are sent out every two months, before anybody catches up with them they switch to another supplier and repeat the performance before switching again. The Society of St. Vincent de Paul wants us to address this issue and I have been in discussions with the Commission for Energy Regulation about it. Moves have been made whereby now a flag is put up and arrears must be declared to a new supplier. However, a new supplier is not blocked from taking on the customer until the arrears are cleared.

Michael Kitt (Galway East, Fianna Fail)
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Time, Minister.

Pat Rabbitte (Dublin South West, Labour)
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I have a final point.

Michael Kitt (Galway East, Fianna Fail)
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Briefly.

Pat Rabbitte (Dublin South West, Labour)
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The Leas-Cheann Comhairle has been very tolerant.

Unfortunately, nothing in what Deputy Murphy stated - I understand from where she is coming - will alter world gas prices and this is the issue. If we were to have the collaboration about which she spoke in purchasing gas on the world market it would be a cartel and anti-competitive and I do not see it being able to run.