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

I thank the Senator for raising this topic. One of the most important things the Government does is trying to keep people, particularly elderly, warm in their homes in the winter. First, I will outline the regulatory regime which we operate. There have been movements in global price and this has impacted households and businesses in Ireland. I will then talk about the Government's response.

Responsibility for regulation of the electricity market is solely a matter for the Commission for the Regulation of Utilities, CRU, the independent regulator. The CRU was assigned responsibility for the regulation of the Irish electricity sector following the enactment of the Electricity Regulation Act 1999. It is a function of the CRU to regulate the electricity market. The CRU ceased price setting for electricity and gas in 2011 and 2014 and prices are now set by suppliers. The CRU is accountable to a committee of the Oireachtas and not to the Minister. Officials from the Department of the Environment, Climate and Communications have ongoing engagement with the CRU and the utility companies on the issue of prices, customer protections and related matters.

Russia's illegal invasion of Ukraine and the reductions in energy supplies to Europe have caused unprecedented energy price spikes in European households. In the aftermath of the Ukraine invasion, and peaking during August last year, wholesale gas spot prices were trading at 13 times their pre-pandemic level. This feeds directly into electricity prices paid by households and correlate strongly with the price of gas. Data supplied by the CRU indicates that estimated electricity and gas household bills are 67% and 80% higher, respectively, than in February of last year.

Due to high gas storage and warmer than normal winter conditions and policy efforts to reduce demand, wholesale gas prices have fallen dramatically and they are currently well below the peak values of last year. However, the wholesale price of gas is still about twice the level it was before the pandemic.

These huge increases in costs for consumers have caused real hardship for many people. This is most pronounced over the winter months when energy use is at its highest. That is why the Government has taken sustained action over the past year to support households and businesses to meet the cost of living challenges. Government has introduced considerable supports for households. There are specific measures to help people meet the cost of energy. These include lump sum payments to fuel allowance recipients, and a total of four €200 electricity credit payments applied to all domestic electricity accounts, including those with pay-as-you-go meters.

On 21 February Government announced a further €470 million package of measures to help social protection recipients from April to July and an extension to the reduced VAT on electricity and gas until October. On 13 December 2022, Government approved a new energy poverty action plan. This plan provides for, among other things, the establishment of €10 million fund to further support people who are at risk of energy poverty. The Department will work with suppliers, relevant public bodies and NGOs to provide financial support to citizens experiencing difficulties in meeting their energy costs this winter. This will include a pay-as-you-go gas and electricity customers. This new fund will be available to bolster hardship funds, which most suppliers have in place already.

People are advised to engage with their suppliers directly or to contact the Money Advice & Budgeting Service or Alone. These organisations can advocate on their behalf to suppliers. This is in addition to the existing sources of support such as the supplier hardship fund and the additional needs payment scheme operated by the Department of Social Protection. The objective of the new fund is to provide a further safeguard to help people who may not be able to access other sources of assistance. Again, I thank the Senator for raising this important topic.