Austerity focus: Householders opting to have power cut off

Householders with large arrears on electricity bills are opting to be dis-connected rather than have pre-paid meters installed.

Thu, 22 Nov, 2012 - 00:00

Sean McCarthaigh

The chairman of the Commission for Energy Regulation, Dermot Nolan, said he was surprised that threequarters of those in serious arrears were opting to be switched off rather than falling into further debt.

He told the Oireachtas Committee on Transport and Communications that 5,000 residential electricity customers had been disconnected in the first quarter of 2012, and 1,600 customers had their gas supply cut off.

However, Mr Nolan said the number of disconnections would fall during the second quarter of 2012.

He said about 10% of all electricity and gas customers were struggling to pay utility bills, representing approximately 200,000 electricity customers and 62,800 gas customers.

He said it was families with children, rather than senior citizens, who are having most problems with falling into arrears.

Mr Nolan said it was hard to understand why people would opt to be disconnected when charities such as the Society of St Vincent de Paul recognised that the installation of pre-paid meters was a valuable tool.

The CER stressed that very clear procedures are in place before energy suppliers can disconnect a residential customers.

Mr Nolan said the price and supply of gas on which Ireland is highly dependent for its energy needs was “highly volatile”.

The price of gas, which accounts for 60% of all energy used in the Republic, had risen 50% over the past two years.

Gas prices are also the biggest factor in the cost of electricity in Ireland.

“We are price takers and have no ability to influence that price,” said Mr Nolan.

Irish electricity prices are now 5% above the EU average, although electricity costs for business customers are below average European levels.

Mr Nolan said Ireland was at a serious disadvantage to many other EU countries due to its high dependency on fossil fuels, which account for 80% of all energy needs.

However, he observed that renewable energy, which accounts for 20% of all energy generated here, predominantly via wind power, acted as a “genuine hedge” against gas prices.

The Government has said that renewable energy sources will contribute 40% of all electricity generated here by 2020.

Meanwhile, the head of the Sustainable Energy Authority of Ireland, Brian Motherway, has said he was shocked at how much energy is wasted by Irish people, and estimated that more than 25% of current consumption could be cut by a range of energy-saving measures.