Joe McHugh (Donegal North East, Fine Gael) | Oireachtas source

I thank Deputy Sheahan for raising this timely issue, especially in light of the publication of a new climate change Bill this month. If and when enacted, it will become the first climate change Bill this country has ever had. We are looking to 2020 and 2050, at our energy mix and our reliance on fossil fuels. It is important that we begin this conversation.

The Government is acutely aware of the financial challenges faced by families and businesses from high electricity prices. However, it is important to note that the electricity and gas markets are commercial, liberalised and competitive and they operate within national and European regulatory regimes, supported by legislation.

Responsibility for electricity and gas market regulation is a matter for the Commission for Energy Regulation, CER, which is an independent statutory body. The CER is focused on actions to mitigate costs for business and residential consumers, such as rigorous scrutiny of network costs, deeper integration with European energy markets and the delivery of a truly competitive market in the interest of customers. The commission continues to monitor the electricity and gas markets to ensure that competition continues to develop and that customers benefit from competition. The Department liaises with the CER on these matters on an ongoing basis.

At a national level, electricity and gas prices are no longer regulated by the CER. The competitive energy market results in choice for consumers and businesses in terms of suppliers, products and prices, and this exerts downward pressure on prices.

The reduction in wholesale gas prices since the beginning of 2014 has led to a reduction in the wholesale electricity price. It should be noted that wholesale electricity prices tend to reflect the price-setting fuel in the market, which is natural gas, not crude oil. It is worth noting that only 1% of electricity was generated from oil in 2012. Lower wholesale gas prices in 2014 compared to 2013 should have a knock-on impact on retail prices, and that is reflected in the latest EUROSTAT figures published by the Sustainable Energy Authority of Ireland, SEAI, on 9 December last. However, I should caution that wholesale gas prices have been rising since the summer of 2014 and this rise is likely ultimately to feed through to retail electricity and gas prices.

The SEAI report shows that all business consumption bands in electricity and gas experienced reductions in average prices in the first half of 2014, ranging from 0.7% to 4% for electricity and 6.7% to 12.9% for gas. Similarly, in the first half of 2014, EUROSTAT figures show a reduction of 5.7% in the average price of gas in the residential consumption band with the largest share of the market. The average price of electricity in the residential consumption band with the largest share experienced a reduction of 1.3%.

Electric Ireland, the larger supplier of electricity in this country, reduced its unit rate for domestic customers by 2% in November 2014. Consumers can, and in many cases have, mitigated electricity and gas prices by shopping around to get the best possible price and service deal from suppliers. I encourage people to continue to do so. Measures such as comparison websites, approved by the regulator, are there to assist people in this endeavour. Even if customers wish to remain with their existing supplier, they should contact that supplier and insist that they be placed on the best possible offering.

I realise that energy supply companies have not automatically passed savings on to their customers, but I expect that savings will feed through to domestic prices in due course.

However, all supply companies offer competitive deals to customers who switch or engage with their suppliers. For example, a customer can go online today and achieve a discount of approximately €150 per annum by switching from the standard rate electricity offering. A customer can achieve a discount of more than €150 on gas by switching from the standard rate. That equates to a saving of more than €300 a year by switching electricity and gas suppliers. However, I fully appreciate that some customers, particularly older and more vulnerable people, are reluctant to switch or feel unable to do so . In this situation I urge all stakeholders, including the energy companies and the regulator, to make the more vulnerable customer categories aware of the most competitive offerings available and to facilitate their transition to the best value deals in the market.

The Minister for Communications, Energy and Natural Resources is scheduled to meet the chief executive officers of the various energy supply companies next week to outline the Government's concerns regarding these matters and to impress on them the need to offer their customers the best value available in a competitive, liberalised market. I will convey the Senator's observations and suggestions to the Minister in advance of that meeting which will provide an opportunity to have a broad-ranging discussion. As the Senator correctly pointed out, if prices in certain sectors are going down there has to be a knock-on effect for customers. I thank the Senator for raising this matter.