Seanad Éireann debate -
Wednesday, 8 Nov 2023

Vol. 297 No. 1

Electricity Costs (Emergency Measures) Domestic Accounts Bill 2023: Second Stage

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Public Expenditure, National Development Plan Delivery and Reform (Deputy Ossian Smyth)

Having regard to the continued high energy costs for households, I am pleased to commend the Electricity Costs (Emergency Measures) Domestic Accounts Bill 2023 to the House. This Bill will establish two schemes to give further support to households with their electricity bills, following the success of the previous two electricity costs emergency benefit schemes, in 2022 and 2023. The electricity costs emergency benefit scheme III will see three payments of €137.61, excluding VAT, made to approximately 2.2 million domestic electricity accounts between December and April. Following a review of the previous schemes, this scheme will introduce a low-electricity-usage threshold to ensure payments are not made to households with usage levels below 150 kWh per quarter in four consecutive quarters, which is indicative of vacancy. However, payments will not be withheld where the account holder is a registered vulnerable customer, has a hardship meter or is micro-generating electricity.

Customers can contact their energy supplier for a review if they have not received a payment, and can further appeal to the regulator.

I am also introducing the submeter support scheme, which will ensure payments are made to households whose electricity is supplied through what would be considered a 'submeter', which would be found in a granny flat, for example. These households could not receive payments under the previous schemes, and this measure is being introduced in recognition of this.

While I welcome the price cuts announced by some suppliers in recent weeks, it is important that these schemes be introduced to ensure further support for households is available from the beginning of December. I seek the Senators' support in achieving this.

It is important to stress that these schemes are just part of an extensive package of measures introduced in budget 2024 to support households. Budget 2024 introduced a suite of once-off cost-of-living supports worth a total €2.2 billion to assist families, pensioners, carers and people with disabilities. This includes a lump-sum payment of €300 to all fuel allowance recipients this month.

The Commission for Regulation of Utilities has announced a number of consumer protection measures to strengthen those already in place, including extended debt repayment periods and a reduced debt burden on pay-as-you-go top-ups. These are in addition to the winter disconnections moratorium, which will be in place for all bill-pay customers between 1 December 2023 and 31 January 2024.

I want to draw attention to the vulnerable customer register. Registering as a vulnerable customer ensures further benefits for those eligible, including extended protection from disconnection, and being placed on the most economical tariff available. I encourage all those who are potentially eligible to seek to register to avail of these protections.

I will now outline the provisions of the Bill and how the schemes will operate. There are 14 sections.

Section 1 is a standard provision which provides for definitions.

Section 2 establishes the No. III scheme. It provides the basis for the estimation of the amount required as well as the allocation of the moneys for the scheme, up to €1.007 billion, with the consent of the Minister for Public Expenditure, National Development Plan Delivery and Reform.

Section 3 provides the legislative basis for the transfer by me, with the consent of the Minister for Public Expenditure, National Development Plan Delivery and Reform, to the distribution system operator of the moneys, up to €1.007 billion, for the operation of the No. III scheme. This will be paid to domestic accounts in three payments of €137.61, excluding VAT.

This will paid to domestic accounts in three payments of €137.61, excluding VAT.

Sections 4 and 5 provide for the functions of the distribution system operator and suppliers respectively, for the purposes of the operation of the scheme.

Section 6 provides a mechanism for review by electricity suppliers of a decision to refuse to make an electricity costs emergency benefit payment to a domestic electricity account. Suppliers will have regard to whether the account holder is, or is eligible to be a registered vulnerable customer or has a hardship meter.

Section 7 establishes the submeter support scheme. It provides the basis for the estimation of the amount required as well as the allocation of the moneys for the scheme, up to €2.5 million, by me with the consent of the Minister for Public Expenditure, National Development Plan Delivery and Reform.

Section 8 provides the legislative basis for the transfer by me, with the consent of the Minister for Public Expenditure, National Development Plan Delivery and Reform, of the moneys, up to €2.5 million, to the electricity suppliers for the operation of the submeter support scheme. This will be paid to supplier submeter accounts in three payments of €137.61.

Section 9 provides for the functions of the electricity suppliers for the purposes of the submeter support scheme.

Section 10 provides for the amendment of section 9 of the Electricity Regulation Act 1999 to create functions for the Commission for Regulation of Utilities, CRU, including for the purposes of oversight of the functions of the distribution system operator and suppliers in relation to the electricity costs emergency benefit scheme III and the submeter support scheme and to ensure that the administrative and operational arrangements necessary for the functioning of both schemes are in place.

Section 11 deals with an amendment to the Taxes Consolidation Act 1997. This amendment is to exempt the electricity costs emergency benefit payment and the submeter support scheme payment from income tax.

Section 12 provides for me, in my capacity as Minister of State at the Department the Environment, Climate and Communications to make regulations, with the consent of the Minister for Public Expenditure, National Development Plan Delivery and Reform, for the purposes of the Act.

Section 13 provides that the distribution system operator and electricity suppliers shall bear their own expenses.

Section 14 provides that the Minister shall, within 12 months of the passing of the Act, prepare a report on the application of both schemes and a report on the application of the schemes compared to emergency measures adopted in other EU states to address high electricity costs.

Section 15 contains standard provisions concerning the short Title and commencement of the Act.

I have outlined the key provisions of this emergency measures Bill and additional detail on each section. I hope this will be of assistance to Senators. I look forward to a meaningful debate and to working constructively with Senators on all sides of the House.

Senator Róisín Garvey

I thank the Minister of State for his time. I welcome the Bill and that is being expedited. I thank the Minister, Deputy Eamon Ryan, the Minister of State, Deputy Ossian Smyth and the staff of the Department who have made this happen in jig time as it is badly needed. With the cost-of-living crisis many people are facing, it is great to be able tell people that €150 will be taken off their bills on 1 December, 1 January and 1 March. That is welcome news for 2.2 million householders. It is excellent. It is great that we have learned from last year's €200 grants and that we will not be giving the credit to vacant homes, for example, and that we will ensure that people using submeters through landlords in multi-complexes will also be able to avail of the grant. It is great for people who fell through the cracks the last time that there is a hardship fund for people who cannot afford to pay their bills and people who are not on the list can go to their suppliers directly and make their case, which a simple format. It is great because we often find formats drawn up by Departments quite complicated. This is a nice simple format for people who did not fall into the hardship bracket the last time and are struggling. They can now approach their suppliers. That is important with all the scams going on through text messages these days. Members of my family told me they had to give their bank details to someone somewhere to get something. It is important that people are clear that they do not have to do anything. The credit will be applied to their bills. They should not believe any texts or emails. That is important as we do not want people to get robbed.

It is great that the windfall tax has been secured by the Minister, Deputy Eamon Ryan, to get some money back from those who made all the money from customers. We are now putting the money into customers' pockets, using €167 million of a tax secured by the Minister, Deputy Eamon Ryan, and the Minister of State, Deputy Ossian Smyth to be able to put the money back into everyone's pockets. It is good that we can do things quickly when we have to. People asked for this to be in the budget. We got it in the budget. It is a positive day, if we are allowed to say that in politics.

Senator John McGahon

I will be brief and follow on from Senator Garvey. This is a straightforward Bill. It is part of our commitment, following on from the budget last year and into the budget this year, to mitigate and to try to help to insulate people against the cost-of-living crisis. This time around we are making it as simple and efficient as possible. That is why it is being deducted at source, which we did not do last year. This is a good example. The three instalments will come in January, February and March-April, following the good work of the budget last year. As I said, we are making it more efficient, which is useful. This all goes back 18 months to when Ukraine was first invaded in early 2022 and we did not know how long the energy crisis or the cost-of-living crisis would continue. It has abated somewhat but it is ongoing. We will not be able to insulate everyone against every price increase. No Government can. It would be wrong for anyone to say otherwise, but with this Bill the Government is trying, as it has in the past 12 months, to insulate as many people as possible, including some of the most vulnerable people who are at risk of energy poverty. We are doing so with this Bill. I thank the Minister of State for coming to the House today and wish him well in progressing the Bill through the Oireachtas as quickly as possible.

Senator Lynn Boylan

Cuirim fáilte roimh an Aire Stáit. Anything that helps people in a cost-of-living crisis has to be welcomed.

It is interesting that this Bill incorporates some of the amendments Sinn Féin tabled to last year's scheme. It is a pity - and it is always the case in this House - that when the Opposition comes forward with proposals, they are blankly refused and rejected rather than the Government working with the Opposition when the proposals are good, valid and coming from a constructive place. I am talking about the provisions to exclude low usage accounts that likely correlated with vacant and holiday homes. By excluding vacant and holiday homes, the Government would have ensured, as it is now doing, that the credit is not lavished on people who do not need it. They clearly do not need it if they have holiday homes or properties that are lying vacant. According to the note we got at the committee, the Minister believes this will save up to €40 million, which means it would have saved even more last year because there were more electricity credits. It is disappointing that it was rejected last year when Sinn Féin was trying to design a more targeted electricity credit scheme. The Government dismissed it. While I appreciate that the Government has now recognised the benefit of that policy, it is disappointing because more than €40 million could have been saved and instead of cutting bills of homeowners could have been targeted to create more measures and supports for those who really need them.

The proposed mechanism for excluding households was rooted, as the Minister of State will be aware, in crucial data obtained from the Central Statistics Office, CSO, release of metered electricity consumption which revealed a compelling case for excluding vacant properties. The CSO found that it was possible to identify vacant houses and holiday homes based on low electricity usage. It demonstrated that approximately 10% of residential customers consumed less than 1,000 kw hours in 2020 in stark contrast with the median consumption of 3,658 kW hours. Our proposal was to exclude the houses that could be identified as low demand users.

It is also interesting that the Minister has also adopted our suggestion to ensure that those on submeters receive the electricity credit. Again, Sinn Féin brought forward an amendment on that this time last year. Many ordinary workers and families did not benefit from the credits. This means that a continued strain was placed on ordinary workers and households who live in properties where more than one domestic account holder was connected to a meter for a whole year longer than necessary. The Opposition comes forward with constructive proposals. This is not personal to the Minister of State, but I encourage the Government to work with the Opposition when we bring forward such proposals rather than having a blanket policy of rejecting everything that comes from this side of the House.

Sinn Féin would have preferred to have seen a cap on electricity bills, but we recognise that the electricity credits will bring relief to households. Therefore, as we move through the Stages today, we will seek to amend rather than reject the Bill outright.

We also take the opportunity to say that we all know where we want to go, and the best way for reducing bills for households is to make that renewable energy transition happen. It is deeply disappointing that this week alone, Gas Networks Ireland confirmed to me it is going to continue to connect 11 data centres to the gas grid. Not only does that clearly have an impact on our climate targets on our emissions because we are locking these data centres into gas, but we know that greater gas demand means households are more likely to pay more expensive electricity because we are using up that electricity rather than renewable electricity. It is, therefore, deeply disappointing that the amendments were not accepted last year but, as I said, we are happy to see them now in this current iteration of the Bill. We hope the Minister of State will maybe listen to the amendments we have this time around and work constructively with us.

Senator Eileen Flynn

I thank the Minister of State and Justina for visiting Labre Park on 18 September. He met with families, got involved with the community, walked around people's homes and saw some of the units where the electricity is connected to the trailers. Since his visit to the site, one family has received a new unit that was required for them. I thank the Minister of State and his team for that. I also thank Justina for all her work around the electricity credits for the special measures for 2023 and early 2024.

The one-off measures and short-term fixes, which I speak about this a lot in this House, are not the solution for the future of very poor people. That is something we should look at around what we are going to do next year and the year after that for people who are living in crisis when it comes to electricity credit. A total of 77% of Travellers living in mobile homes are living in energy poverty. Again, we need to be looking at this. I support and welcome the Bill today, and I think anybody living in poor conditions will, of course, welcome the €150 credit that will be rolled out three times over the next year, which is important for people. I am not objecting to the Bill; far from it. However, what I am saying today is that we need to look at future-proofing and insulation in people's homes. Insulation has been around for a long time now and the majority of houses in the country would be insulated, but that is not the case for many people living in trailers and mobile homes or whatever people want to call them. We talk a lot about housing, but for some people, houses are not a choice of accommodation.

I know from meeting with the Minister of State last year that he is interested in looking at how we can warm up trailers for people. That is something on which we look forward to working with the Minister of State in the future. Not to repeat myself, but if a person has run-down windows and he or she is living in a run-down house, it is going to cost that person maybe three times more money than someone who is living in good accommodation. I welcome the Bill and I know many people welcome the supports in this crisis.

An Cathaoirleach

As there is nobody else present to commend the Bill, I will ask the Minister of State to reply.

Minister of State at the Department of Public Expenditure, National Development Plan Delivery and Reform (Deputy Ossian Smyth)

I thank Senators very much. Senators McGahon and Garvey welcomed the Bill. They pointed out the improved fairness and the fact that people who received double payments last time will be excluded if their homes were vacant and many of the people who fell through the cracks last time will receive payments this time around.

Deputy Boylan pointed out that she is happy we are including a submeter scheme and also that we are excluding vacant homes. She pointed out that she tabled versions of these amendments in the previous iteration of the Bill. I do not blanket reject amendments from the Opposition. I absolutely accept them at times, but sometimes it takes a couple of iterations before the wording is right and before they can be practically implemented. The process here, as it should work in any parliament, is that people listen to both sides, take on board their suggestions, listen to the public and the media and work to improve legislation.

Senator Flynn pointed out that these are one-off measures, that there is a longer term problem for people who are short of money and who are trying to stay warm in the wintertime, and that the long-term solution to that has to be retrofit or having a fuel-free supply of electricity, whether that is through wind or solar. We need to do more work on insulation schemes and energy efficiency schemes for the Travelling community and see if we can find somebody who can work specifically on that because there are obviously particular needs. I can imagine that a caravan is very cold in the wintertime and that, in some cases, replacement is the right answer.

In terms of visiting Labre Park, I thank the Senator for hosting me and other officials to look around that day. It was very welcoming of the Senator to bring me to see inside the houses and caravans there. It does allow me to get a better understanding when I can see the meters and how the electricity and power is going in. I understand there is a proposal to upgrade the entire estate with the Department of Housing, Local Government and Heritage. There is a problem with contaminated soil, however. I am working with my Department, which deals with legal landfills and the remediation of illegal dumps around the country and has experience in dealing with contaminated soil. I have asked officials to see if they can have some involvement in resolving and improving that situation.

I thank everybody very much.

Question put and agreed to.

An Cathaoirleach

When is it proposed to take Committee Stage?

Senator John McGahon

Now.

An Cathaoirleach

Is that agreed? Agreed.