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Sunday 4 December 2016

Energy regulator in bid to block 'debt-hoppers'

Charlie Weston Personal Finance Editor

Published 21/06/2011 | 05:00

CONSUMERS who run up arrears on their electricity or gas bills and then switch to another operator before settling their accounts could find it harder to change provider under new rules.

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The energy regulator last night confirmed it had decided to bring in a new system of "flagging" any gas or electricity account where there were arrears.

This is likely to put a stop to so-called debt-hopping by customers who switch to other providers before settling their existing bills.

If someone runs up a bill with one operator and then tries to change supplier before paying the arrears, the operator they want to switch to will be able to refuse to take them on, the regulator said.

This is because the new "debt flagging" system will make it obvious to all utility companies if someone has run up arrears on their electricity or gas account.

Ireland has developed an active utility switching market with around one million utility accounts switched in 2009 alone, the Commission for Energy Regulation said last night.

But the new regime falls short of industry demands.

Up to now energy companies have not been allowed to discriminate against customers who are in arrears with another supplier.

They wanted this changed to a new system of "debt blocking" where they could stop anyone switching who has unpaid debts.

But the regulator rejected that plan and told utility companies yesterday that it was now bringing in "debt-flagging" measures aimed at highlighting consumers who jump from one utility provider to another to avoid debt.

A spokesman for Bord Gais, which offers gas and electricity, said the company was disappointed that debt-hoppers would still be free to change supplier if they were accepted for a switch.

The company was forced to put aside €24m last year to cover unpaid utility bills.

Unpaid

The ESB has also had to hire a specialised debt-collection agency to handle debts arising from its existing accounts and to recoup monies from thousands of closed accounts where bills remain unpaid.

The firm has negotiated specialised payment plans with some 200,000 of its customers in the past 15 months as households struggle to pay their bills.

Consumers Association of Ireland chief executive Dermott Jewell welcomed the regulator's decision, which he described as "reasonable and balanced".

The issue of consumers in arrears is a sensitive one. ESB was forced into a climbdown in April and had to extend its range of discounted electricity tariffs to consumers in financial difficulty who were making efforts to clear their debts.

Customers with existing arrears on their ESB bills or those who are having difficulty paying can now avail of a minimum 4pc discount by signing up to a Household Budget Price Plan, whereby they commit to an agreed weekly payment via An Post's Household Budget Scheme.

Irish Independent

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