The ESB and Bord Gáis have combined bad debts of €46 million as a result of the growing number of customers facing difficulties paying their bills, an Oireachtas committee heard today.
The ESB has incurred bad debts of €20 million so far this year while Bord Gáis has made provision for €26 million in bad debts, representatives told the Joint Oireachtas Committee on Communications, Energy and Natural Resources.
Bord Gáis chief executive John Mullins said there were now 40 times as many people seriously behind in paying their bills – with arrears of over 120 days – as there were at the start of 2009. In contrast to the 1980s, those in difficulty were as likely to be in middle-class neighbourhoods as more disadvantaged areas.
Some 100,000 customers, from a total of one million, were now “slow” in paying bills. Of these, 26,000 were over €500 in arrears and 20,000 were nearing the stage where they could be disconnected.
Bord Gáis was setting up a new call centre in Clonakilty, employing 40 people, solely to deal with customers’ debt issues.
Not all disconnections were the result of hardship, he said; some landlords cut off the supply to student flats over the summer while some immigrants had left the country, leaving debts behind them.
Mr Mullins said it didn’t make sense to charge the customer the €373 cost of installing a pre-payment meter; he suggested this cost should be “socialised” by sharing the cost more widely.
He said Bord Gáis would do “all possible” to avoid disconnections but needed political and regulatory support to deal with the issue.
Commissioner for Energy Regulation Michael Tutty said electricity and gas suppliers were obliged to operate a code of practice on disconnection and to use disconnection only as a last resort. Expressing concern about the rise in disconnections this year, he said his officials were engaging with the utilities to see what could be done.
He said 22,000 “budget controller units” had been installed in households having difficulties paying bills and another 17,500 had been approved for electricity customers. But he was reluctant to incur extra costs by rolling out pre-payment meters when “smart metering” was in the offing.
Mr Tutty acknowledged that Northern Ireland operated a policy of zero disconnection, but he said this didn’t mean that supply was maintained where people were not paying. In the North, he said, the utilities installed pre-payment meters where bills were not being met and the cost of servicing these paid for the energy as well as offsetting the accrued arrears.
He said the main reason electricity prices were cheaper in the North was because Vat was lower there.
Brid Horan, executive director of ESB Customer Supply, said customers were disconnected only as an absolute last resort when other measures had failed. The number of people going on special payment plans because of their financial difficulties was currently running at 10,000 a month, she said.
Labour TD Liz McManus accused the Government of failing to face up to the issue of fuel poverty. She said she was shocked to learn that €35 million in funds for energy efficiency measures had gone unspent last year.
She also called on the regulator to abandon his “crazy plan” to force the ESB and Bord Gáis to change their brand names. Ms McManus said this would cost the ESB and estimated €40 million while Mr Mullins said the measure would cost Bord Gáis a similar amount.
