Eugene Murphy (Fianna Fail) | Oireachtas source

Gabhaim míle buíochas le the Acting Chairperson for allowing me to come out here to contribute. I was supposed to be in the Chair so I appreciate that and once I am finished here I will allow her to go down to her seat because I am sure she will have something to say about this Bill.

I welcome the Minister to the Chamber and I acknowledge that he makes many visits here. It is nice to see a Minister coming to the Seanad. Fianna Fáil welcomes this debate and we are supporting the Bill as part of the Government. There is no need to outline again to Members what the illegal raid on Ukraine by Russia has done to the world. It has disrupted the supply of energy to the EU and that was all part of the Russian plan. This has resulted in unprecedented price hikes across the energy sector.

In October 2022, a Council regulation set out an emergency intervention in the energy markets to tackle this price rise. The regulation allows, among other measures, for the establishment of a mandatory temporary solidarity contribution from EU companies with activities in the crude petroleum, natural gas, coal and refinery sectors to contribute to the affordability of energy for households and companies. The Minister has done a good job at explaining the Bill and its sections. I have details on all of those sections but I do not intend to go through all of that again because it will be a repeat of what has been said already.

The provisions of this Bill are important, and as the Minister said, it is important to get this enacted quickly. I look at the key elements of implementing the cap and the importance of same. As well as that, tests must be applied to check if windfall gains are being passed on to the final energy consumers. That is important. It is fair to say that the huge shock we all got in our private homes, businesses and sports facilities with the price hike in electricity shook us all up in a number of ways. A large amount of money was taken out of people's budgets, and only for the Government's intervention they would not have been able to keep their bills paid. There is no doubt about that and those measures were welcome. The new measures in budget 2024 are also very welcome to people and people are telling me that. The rise in prices brought a shock to us all.

I mention the importance of reliability and I know this is something the Minister and his officials are switched on to because it is most important for communities and businesses. It is good that a number of suppliers have announced price reductions of between 9% and 30%, and customers can hopefully expect to see this reflected in retail bills for both households and businesses over the coming months. The most immediate factor affecting Irish electricity prices is high international gas prices, as the Minister knows, which have risen and remained high since the second half of 2020. We acknowledge that electricity prices in Ireland are higher than in many other European countries. Retail prices are influenced by a number of factors, including wholesale energy prices and supplier hedging. In Ireland, our location as an isolated island, our low density and widely dispersed population, and our reliance on fossil fuel are also key factors.

Wholesale prices reached peak levels in August of last year, when wholesale gas prices were 706% higher than in January 2021, while wholesale electricity prices increased by a whopping 463%. Due to high storage levels, warmer winter conditions and efforts to reduce demand across Europe, wholesale gas prices have fallen significantly and are now well below the peak values of 2022. However, wholesale prices remain significantly higher than pre-pandemic levels. Based on an estimated annual bill, retail gas and electricity prices were 138% higher for gas and 98% higher for electricity in January 2023 versus January 2021. I know the Minister wrote to the CRU requesting that a review of the pricing and hedging strategies be carried out to ascertain if there have been any market failures, particularly in the case of vulnerable customers.I am very glad to know the report is due to be published in the coming weeks, if I am not mistaken. The CRU has committed to continuing its monitoring of the situation.

Customers who are struggling with their bills are strongly encouraged to engage with suppliers, and I make this point to people I meet who speak about high electricity bills. I advise them to engage. A lot can be achieved by those worried about their electricity bills if they engage with suppliers. Suppliers will not disconnect customers that continue to engage with them. Suppliers also have additional customer support in place, including hardship funds. The Minister recently called a meeting with the heads of energy suppliers who confirmed that the support would continue throughout the winter of 2023 and 2024.

As the Minister said, it is important to pass this Bill as quickly as possible. I am sure there will be other points of view and other amendments that we need to deal with, but it is a very good move and would be welcomed by most people. Sometimes people might ask why it takes so long, but when we consider the level of engagement required with other Departments and the Attorney General, sometimes there is a lot of ground that needs to be covered which even we politicians do not understand. It is not just a matter of having decided a few months ago to bring this in. It takes months and months, as most of us know, to bring forward Bills, get them right and to add amendments if they are needed.

I am hopeful the Bill will be passed quickly. It will provide great reassurance to the public because we all accept that, despite the support from Government, the cost of electricity for domestic and business consumers is extraordinarily high. If our economy is to continue to thrive, we need to ensure our supply is secure and that the price is as affordable as it can be.