Energy regulator cuts length of disconnection time for customers in arrears

The CRU said further supports were necessary for customers this year as, even though prices have come down since the peak of the crisis, bills are still at a high level.

The energy regulator has cut the length of time vulnerable customers cannot be disconnected by their supplier as it said a longer moratorium “did not help them in the long term”.

It has also warned arrears were at “historically high levels”, and that if the Government does not issue electricity credits again in the upcoming budget, then arrears levels could increase even further.

In an update this week, the Commission for Regulation of Utilities (CRU) issued its decision paper on measures to help protect customers this winter and announced the shortening of the disconnection moratorium.

It came after the CRU also announced this week households would also be hit with a €100 hike to their bills this year to help pay for the ongoing investment in Ireland’s electricity network.

The regulator said further supports were necessary for customers this year as, even though prices have come down since the peak of the crisis, bills are still at a high level.

“While suppliers’ prices are expected to reduce further due to the continued stabilisation of the wholesale market, there are other issues impinging on customers which may make the payment of domestic electricity and gas bills even more difficult in the forthcoming winter,” it said.

Arrears levels are trending at historically high levels, both in terms of the value of arrears levels and the average value of a customer’s account in arrears. 

In the last two years, suppliers had to offer customers more flexible payment plans to pay back debt up to 24 months. This winter, it will be shortened to 18 months, CRU said.

However, it said the debt repayment level on pay-as-you-go meters would remain at a maximum of 10% as opposed to 25%.

Vulnerable customer register

Furthermore, suppliers will be required to “actively promote” the vulnerable customer register and the protections it offers, how customers can have a “nominated representative” manage their account, and how to sign up for level payment plans.

Having run from October to March for 2023/24, the disconnection moratorium for vulnerable customers will instead run from November 1, 2024, to March 31, 2025.

“The reason for this being that suppliers reported that moratoria periods saw some customers in arrears disengage from their supplier, which meant they continued to accrue debt,” CRU said.

“When the moratoria were lifted, these customers then faced large build-ups of arrears and possible disconnection. This is supported by the figures which show a rise both in the value and number of gas customers in arrears. Therefore, although the extended moratoria protected customers during the winter months, it did not help them in the long-term.” 

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Daragh Cassidy, head of communications at Bonkers.ie, said the move “may raise some eyebrows”.

“But the CRU has to strike a balance between protecting customers while also allowing energy suppliers to effectively engage with those who don’t pay," he said. 

Unfortunately, history shows that a prolonged moratorium on disconnections can end up making the problem worse as some customers simply stop engaging with their supplier altogether and build up even more arrears.

“However, disconnections are very rare in Ireland anyway and under the CRU's code of conduct, no one is allowed to be disconnected if they're actively engaging with their supplier to try pay their bills. So if you’re struggling, don’t put your head in the sand. Reach out and engage.”

Sinn Féin MEP Lynn Boylan said: "The broader public will also see the moratorium cut by 33%, from nine weeks to six weeks. Sinn Féin’s position remains that the moratorium should align with the Fuel Allowance period, extending beyond six months.

"The CRU has failed to adequately account for financially vulnerable customers, especially those on hardship metres. This group should benefit from the same disconnnection moratorium as registered medically vulnerable customers.

"Now is not the time to roll back consumer protections. As the CRU’s own data shows - which I requested - arrears levels are at historically high levels, with almost €150m owed by struggling households.

"At a time when the is CRU hiking the PSO levy on households by subsidising data centre operators' energy bills, lumping €100 on bills to invest in the network to facilitate the connection of data centres, all while acknowledging electricty prices are still 65% higher than 2021 and gas prices are 99% higher, the CRU is watering down consumer protections. With consumer protection like this, who needs enemies?"