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ESB Head Office on Fitzwilliam Street, Dublin Alamy Stock Photo
Electricity Bills
ESB apologises for error that saw customers overcharged for 12 years
ESB Networks did not collect increased revenue and did not gain financially from the error.
THE ESB HAS apologised to an Oireachtas committee for overcharging customers for 12 years.
The “over-adjustment” of customer bills amounts to a cumulative €100.86 million, or an average of around €54 per customer affected.
Nicholas Tarrant, the ESB’s managing director, told the Oireachtas Committee on Environment and Climate that domestic customers will be reimbursed by the end of September this year, while “large users” will get their money back over the next three years.
The ESB invoices each electricity retail company throughout the year, based on their customer mix and numbers. The companies, independent of ESB Networks, decide how to pass on these costs to their customers.
The error was down to a change in the tariff setting process, which determines how revenue is allocated across the different customer segments in the market.
“With the complexity of the calculations together with the way it was programmed in the financial model, it was difficult to detect the error after the second year of implementation,” Tarrant said.
“ESB Networks did not collect increased revenue and did not gain financially from this error in the allocation of the tariffs.
“We regret that this happened and I would like to apologise to the Committee that it occurred.”
He said in future there will be stronger governance and better oversight “to ensure there is a clear record of what, why and how a change was made”.
Tarrant also said greater engagement with the utilities regulator is needed.
Grant Thornton last year audited the governance and operational controls used for the ESB’s tariff setting process.
“The assessment of the integrity of key operational controls attaching to the selection, approval and application of Tariff Model assumptions, changes to the Tariff Model methodology and Tariff Model input calculations, for the in scope audit period (2022/2023) did not identify any material deficiencies,” Tarrant said.
The ESB is “confident” that having conducted these reviews, key controls and governance measures are now fit for purpose.
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