AROUND 125,000 Electric Ireland customers have fallen behind with their energy bill payments, executive director Pat Fenlon told an Oireachtas Committee today.
Addressing the Joint Oireachtas Committee on Environment and Climate Action, Fenlon said over the past month or two, the number of people who have not paid their bill on time has reached around 125,000.
He said pre-Covid, about 150,000 of their 1.1 million customers did not pay on time, but that dropped significantly in the pandemic.
The company’s hardship fund of €3 million which is there to aid customers struggling to pay bills will be reviewed into the winter, Fenlon said.
“We will review how we can help customers over the winter period,” he added.
The hardship fund recently had an additional €3 million added.
Over the past 18 months, the previous €3 million fund that was “used up”, said Fenlon, “so we are now starting into the new fund of €3 million”.
“We will keep that under review, that’s managed directly with with St Vincent De Paul (VDP) and the Money Advice Bureau (MABs). We will work directly with with VDP and MABs to monitor how that fund is being drawn and we will review that as this winter progresses in particular,” he said.
Fine Gael TD Alan Farrell said the €3 million fund “is a drop in the ocean” in comparison with ESB’s €390m profit for the first six months of the year.
He said consideration should be given to increasing the hardship fund.
“I think that should be done promptly, if I’m quite honest,” he added.
Vulnerable customers
A number of TDs asked about the classification of what is a “vulnerable customer” in which the disconnection moratorium this winter will apply.
Social Democrat’s TD Jennifer Whitmore said it should be made clear that a ‘vulnerable customer’ is classed as such for health reasons, rather than those who are financially vulnerable.
TD Bríd Smith asked Electric Ireland representatives about what is being done to protect the most vulnerable, including those who are financial vulnerable, which she said will be many in the coming months.
What can be done beyond the €3m “which is really pittance”, she said.
The onus should be on companies to inform people that they can register as vulnerable, said Smith.
Electric Ireland said vulnerable customers are encouraged to inform the company if they are vulnerable.
The committee was told that customers are not written to to tell them this, but Electric Ireland said it is something they will “look at absolutely into the future”.
Payment plans
Suzanne Ward, financial controller of Electric Ireland, said payment plans are in place for 9,000 customers already.
She said the company works closely with St Vincent De Paul, stating that the moratorium on disconnections for vulnerable customers for the winter period is coming into effect soon.
Fenlon was also questioned about the remuneration and bonus structure to top executives today, stating that they are linked to profits made by the company.
“The bonus is impacted by profit but up to a cap so increases in profits do not have any impact. It is a percentage as opposed to being linked specifically to the profit level.
“We are in the process of recruiting 1,000 people in what is a very competitive marketplace. Overall, it is important that we have market-based pay for our staff and to attract new talent to the company,” he said.
Fianna Fáil Senator Timmy Dooley asked Fenlon if he would provide a document setting out the scale of payments.
As a semi-state company, Dooley said Electric Ireland should supply it to the committee.
“It’s yes or no,” Dooley said. Fenlon told the committee “we can consider that request”.
Price increases
The energy supplier’s pricing and trading manager, David Vickers, said much of the increase in wholesale gas prices had already been passed on to customers, adding that it was “difficult” to say what will happen to the market.
He made the comments in response to questions from Social Democrat TD Jennifer Whitmore who asked when customers will see the impacts of hedging expiring in their bills.
“We’ve mostly hedged against that but not all the way,” Vickers said.
“I would say a large portion of the movement we’ve seen in the markets over the last 18 months have already been passed through to customers.
“And the reason why the whole amount hasn’t been is through hedging.”
“The markets moving, it’s reacting substantially to announcements from Ukraine, European gas supply concerns,” he said.
Whitmore questioned Vickers about what it would mean for the average bill.
He told the committee the market is up about 300% in electricity, not gas.
“Electricity usually makes up about half a bill so half a bill will be 150%. And prices have gone up by about 120% of the 150% at this point,” he said.
Asked by Whitmore whether that means customers could face a 30% rise, Vickers replied that was a “function of the market” at present but added he could not say whether it will definitely happen.
“The markets moving, it’s reacting substantially to announcements from Ukraine, European gas supply concerns,” Vickers added.
“I can’t say it will happen. In fact over the last number of days, it’s fallen a little bit. The previous week it had gone up a little bit, so it’s really difficult to say.”
Electric Ireland, the retail division of ESB, is the State’s largest electricity supplier. It has around 1.1 million residential electricity customers and around 170,000 residential gas customers.
The energy provider announced three price increases this year. The most recent, an increase in residential electricity bills by 26.7% and gas bills by 37.5%, came into effect on 1 October.
Fenlon told the committee that the price increases Electric Ireland have announced over the past 18 months have been “as a direct consequence of the unprecedented increases in international wholesale gas prices”.
“As we operate as a standalone energy supplier in the market, we have no choice but to increase our prices given the quantum of increase in our costs,” he said.
He told the committee that the significant increases in customers’ bills over the last year “have been driven by extraordinary and sustained increases in the wholesale price of electricity”.
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