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Monday 6 February 2023 Dublin: 5°C
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# Explainer
Disconnection moratorium: How will pay-as-you-go customers be impacted this winter?
The matter has been before the Dáil on multiple occasions in the last two weeks.

THERE HAVE BEEN concerns raised in recent weeks about whether or not pay-as-you-go utility customers would be included in this winter’s expanded disconnection moratorium.

While it was initially highlighted by People Before Profit-Solidarity TD Mick Barry, the concerns spread quickly, with Sinn Féin continually raising the matter in the Dáil over the last two weeks.

Initially, Tánaiste Leo Varadkar told the Dáil that PAYG customers would not be included, saying it was “difficult to know” how the process might work.

Taoiseach Micheál Martin then quickly moved to rule out disconnections for pay-as-you-go customers entirely, however, his message quickly shifted from PAYG customers “could not” be disconnected to PAYG customers “should not” be disconnected.

“First of all, I’ve made it clear, in my view, unless there are extenuating circumstances, [people] will not be cut off”, said Martin. He said a reason may be for example that someone is not engaging with the energy company.  

Given the Government supports provided and the lump sum payments from Budget 2023, “people should not be cut off”, said Martin. 

Despite ongoing pressure from the opposition on the issue, the Government have not indicated that any further support for PAYG customers will be forthcoming, despite meetings between suppliers and ministers. 

So what exactly is the issue?

Currently, any customer on a pay-as-you-go electricity or gas meter is automatically cut off from supply if they use up their €20 emergency credit.

This emergency credit is essentially a buffer, allowing people to still access electricity if they haven’t topped up their meter before it runs out.

This emergency credit was initially €10, but the Commission for Regulation of Utilities (CRU) increased it to a minimum of €20 as part of new protections for PAYG customers over the winter months.

However, despite the winter disconnection moratorium, customers will be cut off if they are unable to top up their meters.

The Journal asked the CRU whether or not pay-as-you-go customers could be disconnected if they were unable to top up their meters.

A spokesperson for the CRU did not directly respond to the question and issued the following statement:

“The metering systems cannot provide the granularity of data required to identify the reasons for certain meters not being topped up or the cohort of customers. The CRU has made the Department of the Environment, Climate and Communications aware of the limitations of the metering systems in this regard.

“While all electricity customers will benefit from the Government electricity credit that was recently announced during the budget, additional credits to PAYG customers would require further subvention or access to a non market-based credit mechanism.”

This essentially means that the PAYG energy companies are unable to determine the reason why meters have not been topped up.

What is the solution? 

Multiple solutions have been put forward by the opposition, with Mick Barry calling for a ban on disconnections for pay-as-you-go customers on “any day with a ‘Y’ in it”.

Currently, automatic disconnections do not take place at the weekend or on Bank Holidays, with Barry’s suggestion calling for this to be expanded for the entire week this winter.

When asked about a potential expansion of emergency credit earlier this week, Barry told reporters that a move on that would be a “step forward” but that it would need to be higher than €200.

There has also been suggestions that the cost of switching to bill pay from pay-as-you-go should be dropped.

However, the Government have repeated that the once off supports from Budget 2023 would help people afford their bills, but have said that additional emergency social welfare payments are available.

“The Money Advice Bureau (MABs) is also a very important organisation”, the Taoiseach said in the Dáil last week.

Protections in place

Currently, there are additional supports in place from the CRU for pay-as-you-go customers.

Alongside the extra emergency credit, the repayment bands for any accumulated debt on pay-as-you-go meters have been changed, with energy providers only able to take a maximum of 10% off debt when a customer tops up.

For example, if a PAYG customer tops up by €20, a maximum of €2 can be deducted to pay any accumulated debt.

There will also be a change to financial hardship meters, with any customers using them set to be placed on the lowest available tariff. 

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