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

I welcome our guests in the Gallery and they are all very welcome. I would never judge anyone for their mileage because I live in a county that is only 10 km by 10 km, so I understand that some have a greater challenge than me.

Having regard to the continued rise in electricity prices, I am pleased to commend the Electricity Costs (Domestic Electricity Accounts) Emergency Measures and Miscellaneous Provisions Bill 2022 to the House. I shall open this debate by setting the broader context for the action to be taken on foot of this legislation, which will establish an electricity costs emergency benefit scheme II under which a total of €550 will be paid to each of 2.2 million domestic electricity accounts in three payments between November of this year and April of next year at an estimated cost to the Exchequer of €1.2 billion.

Everyone in this House will be only too well aware of the impacts we are seeing from the continued and unprecedented rises in the cost of energy driven in a very large part by the volatility in international gas markets caused by the Russian invasion of Ukraine. The steep increases in gas prices brought about by the invasion are also leading to windfall gains for some energy companies across Europe, especially those companies involved in the production of fossil fuels and those who produce energy at a much lower cost than the cost of gas.

On 30 September, the Council of Energy Ministers agreed the EU Council regulation on an emergency intervention to address high energy prices and windfall gains. The headline measures agreed include a voluntary overall reduction target of 10% of gross electricity consumption and a mandatory reduction target of 5% of the electricity consumption during peak hours; a temporary solidarity contribution based on taxable profits for fossil fuel production and oil refining; and a cap on market revenues of for specific technologies in the electricity sector which have not seen significant increases in costs, so that includes wind and solar. This is known as the windfall tax. Estimates of the potential revenues that may be realised from a solidarity payment and from a windfall tax are currently being prepared by the Department of the Environment, Climate and Communications. Estimates will depend on policy choices related to the flexibilities that are set out in the regulation and will depend on the wholesale gas price over the coming months. The cap on market revenues must be implemented by the start of December and the solidarity contribution must be implemented by the end of December.

The Government is keenly aware of the impact of this volatility on consumers as a household electricity bill has now increased from an estimated annual average of €1,006 in January 2021 to €2,020 in October 2022. In the face of an impact on this scale, the big advantage of this scheme is that it uses the meter point registration number, MPRN, to identify accounts and ensure payments are made directly and automatically to those accounts without the need for means testing, application or approval. This meant that, under the first scheme, payments could be made directly to 2,138,939 domestic electricity accounts or over 99.36% of all eligible accounts, including pay as you go.

It is important to be clear that this scheme is just one part of a much wider package that includes targeted measures. Particularly important in this context is the €400 lump sum for recipients of the fuel allowance. This is in addition to the €924 people entitled to the allowance receive over the winter and goes along with the broadening of the threshold for this benefit.

I will now outline the Bill's subject matter and how the scheme will operate. The Bill provides for the establishment of a scheme for the purpose of making the electricity cost emergency benefit payments of €183.49 to domestic electricity accounts to be paid in each of the November-December 2022, January-February 2023 and March-April 2023 billing cycles. The moneys for the scheme will be allocated by the Minister for the Environment, Climate and Communications, with the consent of the Minister for Public Expenditure and Reform, out of moneys provided by the Oireachtas. The amount will not exceed €1.211 billion. This figure makes provision for 2.2 million domestic electricity accounts. The Commission for the Regulation of Utilities, CRU, will provide oversight of the scheme. It will put in place administrative and operational arrangements to ensure ESB Networks - ESBN - and suppliers perform their functions under the scheme. It will be operated by the distribution system operator, ESB Networks and electricity suppliers.

The Minister, Deputy Ryan, will provide, under regulations, 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, based on MPRNs. ESBN will notify the Minister of this number, which will allow the estimation and necessary allocation of moneys for the scheme. On the effective dates for each payment period, which will also be set out in regulations, ESBN will notify each electricity supplier of the assigned MPRN for each domestic electricity account they supply and the amount of money they will transfer to them for the purposes of the scheme. The Minister will set out in regulations the payment periods within which ESBN will transfer the funds to suppliers for the sole purpose of making payments under the scheme. Following receipt of these funds, suppliers will then, within the payment periods set out in this Act, credit each domestic electricity account held with it on the effective date with a payment of €183.49. Suppliers and ESBN are required to repay any moneys received by them which have not been used for the purposes of the scheme.

I will provide a section-by-section summary of the Bill, which has 13 sections. Section 1 is a standard provision which provides for definitions, while section 2 provides for the establishment of the scheme. It provides for the allocation of the moneys for the scheme, up to €1.211 billion, by the Minister for the Environment, Climate and Communications with the consent of the Minister for Public Expenditure and Reform.

Section 3 provides the basis for the transfer by the Minister for the Environment, Climate and Communications, with the consent of the Minister for Public Expenditure and Reform, to the distribution system operator of the moneys for the operation of the scheme. This will be paid to domestic accounts in three payments of €183.49, excluding VAT.

Sections 4 and 5 provide for the functions of the distribution system operator and suppliers, respectively, for the purposes of the operation of the scheme. Section 6 provides for the amendment of section 9 of the Electricity Regulation Act to create the oversight functions for the CRU.

Section 7 deals with an amendment to the Taxes Consolidation Act 1997. This amendment is to exempt the electricity costs emergency benefit payment from income tax.

Section 8 provides for the Minister for the Environment, Climate and Communications to make regulations, with the consent of the Minister for Public Expenditure and Reform, for the purposes of the Act. Section 9 provides that the distribution system operator and electricity suppliers shall bear their own expenses.

Section 10 provides for a drafting amendment to section 34 of the Electricity Regulation Act 1999 to include specific reference to the relevant market participants registration framework established under Part IIIA of the Electricity Regulation Act 1999, in the context of terms for connection to and use of transmission or distribution systems, to make it clear that relevant market participants can enter into

Section 11 provides for the amendment of section 35 of the Electricity (Supply) Act 1927 to include specific reference to the relevant market participants registration framework established under Part IIIA of the Electricity Regulation Act 1999, to make it clear that relevant market participants can sell electricity or supply electricity for sale.

Section 12 amends the National Oil Reserves Agency Act 2007 to provide for a reduction in the petroleum product levy, which is more commonly known as the NORA levy. The NORA levy is a charge of 2 cent per litre applied to most petroleum products sold in the market for the purpose of funding the operations of the National Oil Reserves Agency and the climate action fund. The levy will now be reduced to a nominal amount. The reduction will come into effect from 12 October to offset the carbon tax increase on petrol and diesel road fuels which will apply from that date. It will remain in place until the end of February 2023. It should be noted that NORA has a significant financial reserve and that this temporary levy reduction will not impact on its ability to carry out its functions in the event of the occurrence of an oil emergency.

Section 13 contains standard provisions concerning the Short Title and commencement of the Act.

I have outlined the main provisions of this emergency measures Bill.I have also provided detail on each section, which I hope will be of assistance to Senators. I look forward to an informed and meaningful debate and to working constructively with Senators on all sides of the House.