Households in arrears to get pre-pay meters for electricity
Published 30/09/2010 | 05:00
MORE than 17,000 people who are struggling to pay their electricity bills are to be given free pre-pay meters in a bid to cut the soaring number of disconnections.
The commissioner for energy regulation announced the move yesterday as new figures showed that nearly 18,000 people have had their electricity or gas cut off so far this year, while another 20,000 are in danger of losing their gas supply.
There has been a significant increase in disconnections recently, with 2,000 to 2,500 customers now having their electricity cut off each month, the commissioner, Michael Tutty, told the Oireachtas Energy Committee yesterday.
Around 22,000 people already have these pre-pay 'budget-controller' meters. Mr Tutty announced the rollout of another 17,500 is at no extra cost to the households affected as the cost will be "socialised", in others words spread amongst all customers probably on their household standing charge.
However, he defended the imposition of disconnection and reconnection charges of up to €200 on struggling customers, arguing they are a real cost which must be met by someone and an incentive for people to keep paying bills.
It would be unfair to expect others to foot the bill by spreading the cost across all customers. Although it might only amount to €3 a year per household, this could increase significantly if it encouraged others to stop paying their bills, he said.
Mr Tutty said that the "zero disconnect" policy in the North, which some critics wanted extended to the Republic, meant that pre-pay meters were installed to allow people pay their future electricity usage at a higher unit rate, calculated to also pay off their arrears.
However, there was a significant cost associated with installing pre-pay meters for all customers in difficulties, which might be too high given more sophisticated meters were also being developed in the longterm, he said.
Regarding Irish electricity prices, Mr Tutty said that while they were higher than the North for those with lower usage, that was mainly the responsibility of the Oireachtas as the VAT rate in the Republic was 13.5pc, compared to 5pc in the North.
The ESB is arranging around 10,000 payment plans each month for customers who are falling into arrears, said ESB executive director Brid Horan.
Disconnection remained an option of last resort and only took place "after months, if not years" of communication with the customer to try and arrange a repayment plan, she said.
Around 1.5pc of their customers were now in arrears which might not sound much but is against a backdrop of very tight profit margins of just 1.3pc.
Bord Gais chief executive John Mullins said that the increasing number of people finding it difficult to pay their bills came from all sectors including the middle classes and "large swathes of south county Dublin", which made it a radically different situation from the recession in the 1980s.
Bord Gais has one million customers, and 100,000 are behind in their payments, with 20,000 in the final resolution stage where disconnection is a real possibility if a payment plan can not be agreed or a pre-pay meter installed.