Business Irish

Friday 29 August 2014

Energy quango pays €735,000 bonus to staff as bills rocket

Employees got average of €3,200-plus last year

Nick Webb

Published 13/01/2013 | 08:00

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ENERGY quango, the Commission for Energy Regulation (CER), has paid its staff close to €735,000 in bonuses over the past three years as it oversaw massive price rises for the ESB and Bord Gais leading to a sharp spike in the number of cash- strapped homes having their power cut off.

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Last year alone, the 67 staff shared almost €220,000 under the quango's "performance management scheme" — an average of more than €3,200 each.

These bonuses are controversial coming as the number of homes being disconnected for non-payment of gas or electricity bills has rocketed, hitting 6,000 in the second quarter of last year, according to new figures. This represents a rise of 38 per cent on the previous quarter for gas.

One in six gas customers is now on a special repayment plan as they struggle to meet soaring bills.

The quango is funded by gas and electricity companies who effectively pass on the costs to their customers.

The levy and licence fees from the energy industry contributed just over €9m to the running of the quango last year. The commission recorded a deficit of almost €467,000 last year.

Despite these losses, the commission paid out hefty bonuses.

"The commission operates a performance management scheme as approved by the Department of Finance and Department of Communications, Energy and Natural Resources. Of the total employee costs of €45.01m during 2011, €219,830 represents the costs associated with the scheme," CER states.

The scheme paid out €230,095 in 2010 and a further €281,840 a year earlier.

In 2011 and 2010, the commission employed 67 staff members.

CER has been responsible for setting prices for the semi- State energy companies Bord Gais and the ESB.

Last September the CER approved an 8.5 per cent rise in the price of Bord Gais gas — despite the semi-state seeking only a 7.5 per cent increase.

The CER said Bord Gais needed an extra increase to cover rising costs.

The price rise added an extra €90 per year on to the average annual bill of the company's 433,000 customers. A year earlier, Bord Gais had been greenlighted to increase prices by 22 per cent.

The commission approved prices rises of 12 per cent for ESB customers in 2011. It no longer sets prices for the ESB following deregulation.

"The CER appreciates that any energy price rises are difficult for customers," according to its last annual report.

"We encourage customers to 'shop around' among suppliers to get the best possible deal.

"In accordance with the terms and conditions of their contracts of employment, the majority of CER staff receive some of their remuneration as performance-related pay," states the commission.

"Awards under the scheme averaged 7.5 per cent of the base salary over the past number of years, with the range of payments going from 0 per cent to 14 per cent in 2012," it added. Commissioners and directors in CER are not eligible for this scheme.

During 2012, staff in CER worked on average 42 hours per week. The standard working hours under their contracts is 37.5 hours compared to 35 in the civil service. Overtime or other allowances are not paid, and staff are subject to the pension-related deduction and salary reductions applied to public sector staff.

The commission added that this scheme dates from when the CER was set up in 1999, and was approved by what is now the Department of Communications, Energy and Natural Resources as well as the Department of Finance

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