Electric Ireland to retain low use charge

Power company Electric Ireland says it will not change its “less costs more” policy despite a backlash against its extra charge for customers who do not use “enough” electricity.

The Consumer Association of Ireland branded the policy “very unfair” after it emerged the company, called ESB up to the start of the year, is hiking up the bills of more than 100,000 domestic customers who are classified as low users.

Low usage is measured at two units of electricity or less per day, compared to average household use of about 14 units per day, and Electric Ireland said the new charges would mainly affect owners of second homes such as holiday homes or unrented investment properties that are vacant most of the time.

Electric Ireland spokes-man Brian Montayne said: “We still have network charges to pay on those premises, as well as the costs of metering, maintenance, billing, customer service and payment channels, and we are not recovering those costs where usage is very low. The new standing charge will simply enable us to recover our costs on those accounts.”

The new charge amounts to an increase of 15.5c per day — a 50% increase on the current standard standing charge. Over a year, that adds up to an extra €56.70 for electricity that is not used.

Dermot Jewell of the consumer association said the charge would be unpalatable at any time but in the current economic climate it was completely unacceptable.

“It is well understood that almost every individual in this country is doing their best not to get into an arrears situation and not to fall foul of a bad credit rating, and is cutting back and cutting down everywhere they can.

“That includes electricity, and to penalise somebody and to charge somebody for not using enough of a service under those circumstances is very, very unfair. There seems to be an assumption that people who have second homes can afford it but that’s not necessarily true, and there is no consideration for those who have low electricity use in their own home.”

Fine Gael senator Catherine Noone said she was shocked by the move. “It would be much fairer to have a flexible billing period for low-usage customers, so a bill would only be generated when they reach a minimum threshold. This would in turn allow the company to save money by issuing fewer bills.”

Mr Montayne said most customers would not be affected as even empty houses where light bulbs were kept on or a fridge was kept running would use up two units per day, but about 10% fall in to the low-user category.

“Our customer base has fallen from 2.2m to 1.3m since Apr 2009 [when the electricity market opened to competition] so it has become a bigger percentage in terms of our customer base.”

He said the policy would not be reviewed despite the criticisms. “We think long and hard before increasing charges to any of our customers but we are a commercial business and if accounts are under-recovering, that doesn’t make good business sense. The alternative was to increase charges for all to make up for the 10% and we did not think that would be fair.”