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Sinn Féin leader Mary Lou McDonald during Leaders' Questions in the Dáil this afternoon. Oireachtas TV
Leaders' Questions

McDonald calls on Taoiseach to go 'beyond cosy chats' to lower electricity costs for consumers

McDonald said Varadkar has not ‘intervened to ensure the big drop in wholesale cost gets speedily passed on to the consumers’.

SINN FÉIN PRESIDENT Mary Lou McDonald has called on Taoiseach Leo Varadkar to go “beyond polite encouragement and cosy chats” to lower electricity prices for consumers.

The latest figures from the Central Statistics Office, which were published yesterday, revealed that wholesale electricity prices decreased by 13.5% in the month to April and were 42.5% lower than April 2022.

The prices that energy companies bought electricity at last month were at their lowest level since August 2021.

Speaking during Leaders’ Questions in the Dáil this afternoon, McDonald said that electricity bills have “soared by 63% for households” since March of last year.

McDonald told the Dáil that “is it clear that savings aren’t being passed on to consumers”.

Addressing Varadkar, the Sinn Féin leader said: “On the first of March last, when challenged about these costs, you stood here in the chamber and said that you would take action if companies didn’t pass on savings.

“You said, ‘we expect to see electricity and gas companies reduce their prices over the course of the coming months for businesses and residential customers; it will not just be about polite engagement’.”

McDonald noted that in the intervening 12 weeks, “not one energy company has reduced their prices for domestic customers”.

“So what will you do, beyond polite encouragement and cosy chats, to get these savings passed on to customers?”, asked McDonald.

She added that the “real life impact of these extortionate costs” are being felt in many households, and referenced a story that was recalled in the Dáil last week by Sinn Féin TD Sorca Clarke.

Clarke spoke to the Dáil about an elderly woman who was forced to dip into her savings that were put aside to buy a headstone for her late husband in order to pay her electricity bill.

The Sinn Féin leader also claimed that “we saw the same approach when it came to spiralling food costs”.

“What did they get from government? A meaningless encounter between government and food retailers while prices continue to soar and families suffer,” said McDonald.

In response, Varadkar acknowledged that electricity prices “have gone up a lot in the past year or so”.

He added: “Companies buy ahead. They don’t just buy on-the-spot market today and sell that electricity to you.

“They buy ahead six months to a year in advance and that’s the price that they pay, that then gets passed on to consumers and that’s how the electricity market works.”

Varadkar then said that the government is acting in “five ways” to combat electricity costs.

This included energy credits totalling €600 for households, a reduction of VAT on electricity and gas to 9%, a €300 million dividend that has been taken from ESB “which we can use to help homes and businesses over the period ahead, and a windfall tax on the profits of energy companies which will apply rom September.

McDonald said Varadkar has not “intervened to ensure that the big drop in wholesale cost gets speedily passed on to the consumers”.

“I know all about hedging and the process that you’ve described to me,” said McDonald, “but that’s no good to that woman (who’s story Sorcha Clarke recalled in the Dáil last week).”

Varadkar responded: “As you’ve outlined, it’s done through hedging. Companies buy electricity and gas ahead of time.

“They don’t buy it today and sales aren’t used today. They buy to today and sell it onto you today and that is why retail prices will fall but there will be a time lag between when they fall.”

‘Mountains’ of arrears

The exchanges in the Dáil came as TDs and Senators were warned that people could face heading into next winter saddled with “mountains” of energy bill arrears.

In an appearance today before the committee on environment and climate action, the poverty charity St Vincent de Paul (SVP) said they saw a 40% increase in requests for assistance related to energy last year.

Figures from the CSO from 2021 indicate that 8.7% of people in the lowest 20% of the income distribution were in arrears on utilities twice or more in the previous year.

Earlier this month, the committee was given figures from the Commission for Regulation of Utilities (CRU) that showed the number of domestic gas customers in Ireland in arrears had increased from 18% to 23% in 12 months.

This amounted to 160,399 gas customers in arrears as of the end of March – almost 25,000 more compared to the same period last year.

There were also 199,790 electricity customers in arrears.

Issy Petrie from SVP told the committee that without further intervention, people will be going into next winter with repayments “still hanging over their heads”.

“A bill of €600 euros would have been so unusual previously, and now it’s kind of becoming a multiple occurrence for people and that just becomes kind of an insurmountable, sort of mountain of arrears for people, so that’s why it’s so urgent to get this tackled now,” she said.

She added that there was a risk of “really, really significant levels of debt” being concentrated among people who are least able to afford it, be it through health requirements or their homes not being energy efficient.

She also called on more monitoring and data from the regulator, the Commission for Regulation of Utilities (CRU), on the repayment plans being offered to people and how long they are offered for.

Susanne Rogers, of Social Justice Ireland, said that for people on low incomes, repayments are difficult to commit to.

“The energy companies don’t generally let you go past two bills that haven’t been cleared, that’s when you’re pushed into the threat of disconnection and then what they will try and do is spread that out over 12 months – even arrears of €300 is about an extra five, six euro a week.”

She said that if people cannot commit to repayments within the timeframe being offered, they face disconnection from their energy supplier.

“They think that they might be able to manage but all it can take is one little knock somewhere in that 12-month period – Christmas – and they are back to square one.

“So I think the companies maybe do need to get a little bit more creative in how they manage those arrears without two strikes and you’re out, or pushing unmanageable repayment plans on people.”

-With additional reporting from Press Association

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