MORE THAN one million Irish households are almost certain to face gas and electricity price rises of up to 20 per cent this autumn, Bord Gáis Energy has warned.
The company also said the number of customers in arrears had grown dramatically over the past year. It said it had been forced to write off more than €26 million in bad debts last year.
Speaking at the launch of the energy provider’s annual report yesterday, chief executive John Mullins confirmed that it would be seeking a double-digit gas price increase from the Commission for Energy Regulation (CER) in July. He expected the increase to be implemented in October.
He blamed a spike in energy prices on international markets and pointed out that wholesale gas prices had doubled over the last year. The company was no longer in a position to absorb such significant price increases and would have to start passing them on to consumers.
He said Bord Gáis Energy, which announced a profit before tax of €120 million, would be seeking a gas price increase of between 10 and 20 per cent. Since 2009, gas prices for consumers had fallen by 25 per cent and he claimed Irish consumers were paying about 26 per cent less than the European Union average for gas.
Mr Mullins warned that electricity prices were also likely to rise by up to 10 per cent over the next six months, news that is likely to dismay a growing number of the the company’s customers who are struggling to pay their bills.
Bord Gáis Energy now has more than 115,000 customers in arrears of two months or more, an increase of 300 per cent on 2010.
Mr Mullins stressed that the company was committed to working with customers in difficulties and said that disconnections were only considered as a last resort. He said more than 90 people were now charged with managing customers in arrears, up from just 12 in 2008,
The company installed 1,400 pre-paid meters in customers’ homes in March. This compares with an average of 40 meters each month last year.
If a person is in “genuine hardship”, the company has said it is prepared to install the meters at no cost and it believes a more widespread use of meters will help customers work through problems with arrears and manage bills more effectively.
Bord Gáis Energy wants to encourage a greater use of meters, which operate with swipe cards. They can be topped up at Payzone outlets around the State, but the company said acceptance of the system remained weak among consumers.
Mr Mullins also highlighted the issue of “debt hopping”, which sees consumers move from provider to provider leaving unpaid bills behind. The company wrote off €26.4 million in bad debts last year as a result of customer arrears.
He said last year 24,000 Bord Gáis Energy customers in arrears had switched provider and called for a protocol that would allow companies to raise an objection if a customer in arrears of more than €200 decided to switch to an alternative firm without first clearing their account.
The company would like to see the rules governing switching changed to allow energy companies see the credit history of customers, but any such move would have to be sanctioned by the CER.
Mr Mullins also called for Bord Gáis Energy to be deregulated for gas prices. “Another key challenge facing the company this year is that Bord Gáis is the only regulated provider in the gas sector, and as such, faces considerable constraints in terms of its ability to compete on a level playing field. This needs to be addressed urgently,” he said.
