Households to get €50 compensation for overcharging, according to ESB

Households to get €50 compensation for overcharging, according to ESB

A body of work is under way to identify a final figure owed, the committee was told.

Every household in the country is to be compensated to the tune of €50 after being overcharged for more than a decade.

The Government's policy of making consumers subsidise the energy costs of big business over that period is now coming under the spotlight and Commission for Regulation of Utilities (CRU) chair Aoife MacEvilly told the Oireachtas committee on the environment that "absolutely that money will be paid back” to customers and a body of work is underway to identify a final figure owed.

While the CRU has admitted it can't say how many households were overcharged, ESB Networks later said it "anticipates that it will result in the reduction of a domestic electricity bill in the order of €50 in total".

Ms McEvilly said the overcharging of customers above and beyond the €50m in annual network charges that was added to domestic users' bills on foot of the Government policy may have come from an “administrative error”.

Sinn Féin senator Lynn Boylan said that households that paid “at least half a billion euro” over the course of the decade want answers.

She accused the CRU of failing to provide those answers to the committee.

€600m paid by households

Details of the at least €600m bill paid by households to subsidise the energy bills of big business such as large manufacturing companies, pharmaceuticals, and data centres were first reported late last year.

Details were then released to Ms Boylan under Freedom of Information on both the original decision and CRU’s decision to reverse the measure.

According to a 2009 Government memo, a Cabinet committee had determined that large energy users “should face no increases in their electricity bills” given that they were “major employers” at a time of economic turmoil.

It also conceded that changing electricity tariffs to pile more on households in favour of big business “may prove unpopular”.

Other documents released under FOI from 2022 show civil servants in the Department of Enterprise saying CRU’s new proposals could amount to additional tariffs of around €70m on the likes of data centres, large pharma, and tech firms.

At the committee on Tuesday, CRU said €50m a year was designed to be added to household bills under the measure.

However, the committee heard that ESB Networks implemented this measure in a manner that ended up costing households more than €50m.

“We said absolutely that money will be paid back," Ms MacEvilly said.

The benefit didn't go to ESB, it went to large energy users.

CRU director of Networks and Economic Regulation Karen Kavanagh said work is under way to understand the specifics of the error and “how it happened, why it happened”. 

She also said that a mechanism for how to return the money to customers must be decided.

Ms Boylan said it was “damning” that it took so long to both reverse the measure where customers paid to subsidise big businesses, and that customers were being overcharged within that mechanism.

CRU indicated in November that reversing the measure could save domestic customers around €41 a year on their average bills.  

“Was there no due diligence by the regulator?” she said, adding that a full breakdown of why customers were charged more must be provided.

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