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Tánaiste says courts may be able to help customers left with escalating energy bills after exit of Iberdrola

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THE abandonment of 32,000 electricity customers by Iberdrola has been raised in the Dáil, with claims it has been “let off scot free” from the Irish market in return for €160 million in promised investment in Irish renewables.

Michael Fitzmaurice, Independent TD for Roscommon-Galwaym said a small firm in his constituency was being charged 30pc more than its original contract following a transfer to a supplier of last resort, Electric Ireland. Independent.ie has highlighted similar cases.

Mr Fitzmaurice said Iberdrola left the country despite having posted €1 billion in worldwide profit in the first quarter of this year. It had not fulfilled the one-month notice in its contracts for power provision, he sid.

Leo Varadkar agreed that “contracts should be honoured”, even though the step-in suppliers are charging much more than Iberdrola – and transferred customers are locked in until the end of the summer. The Tánaiste wondered aloud if “something can be done through the courts”.

Mr Fitzmaurice gave the example of Black Donkey Brewery in Ballinlough. It only heard in the media that Iberdrola had left Ireland. “The brewery had received no word of this from the supplier. Bord Gáis Energy was the only other company that would provide the cheapest rate, albeit 16pc more. The owners decided to sign with that supplier,” he said.

“But lo and behold, a month later the brewery received a letter from the Commission for the Regulation of Utilities (CRU) stating that Electric Ireland would be taking over Iberdrola's contract - and it would cost 30pc more than the original contract. The brewery could not get out of it until 1 September.”

Customer data had been transferred without consent. “Everything about the company has been given to Electric Ireland and the CRU has done nothing about it,” Mr Fitzmaurice said. “One part of the contract states clearly that Iberdrola would have to give a month's notice but this seems to have been bypassed completely. The brewery is facing close to 200pc of an increase in electricity prices in September [compared to last year].

“Why is this happening and what is the CRU doing?”

Tánaiste Leo Varadkar said the primary objective was to ensure that electricity and gas supply was not interrupted. “All customers are transferred to the standard tariff of Electric Ireland and Bord Gáis Energy as suppliers of last resort,” he said.

“Customers will remain with the supplier until 31 August 2022. The customer will then be free to switch.”

Mr Fitzmaurice pointed out that when Iberdrola left Ireland, it did so voluntarily and did not go bankrupt. It had made a €1 billion global profit in three months. “Some companies have to take the hit in one place while they make money somewhere else,” he said.

“Iberdrola is supposed to be putting €160 million into offshore wind in Ireland. Is it being let off scot free from the Irish market because it is going to make investments? What is the CRU playing at to allow this to happen? The reality is that small business in rural Ireland cannot sign a new contract until September, when the dogs in the street know that electricity is going to be dearer.

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“That is not the way to treat a business. A contract is a contract and should be honoured.”

The Tánaiste said he would speak to Energy Minister Eamon Ryan. “I will ask my office to make contact with the CRU to see if anything can be done,” he said.

Mr Varadkar added: “I suspect what the company did on this occasion was try to buy market share by selling below cost. It did not work out, it lost money and has now decided to leave the State.

“I take the point. Contracts should be honoured. If somebody engages in a deliberate strategy of trying to buy market share by below-cost selling, they should still honour the contract. The difficulty we have is that if somebody does leave, how can we enforce it if they are not here any more?

“Perhaps something can be done through the courts. I do not know. I will follow up on it with the Minister and the CRU.”


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