The energy market is increasingly resembling a cartel, with almost no real choice for customers in switching suppliers, the Dáil has heard.
Social Democrats joint leader Catherine Murphy said the potential savings in switching – it aims to ensure competition in the market – has dropped from between 25 per cent and 40 per cent to barely 10 per cent. Yet customers were not receiving the benefit of reduced prices through switching suppliers when prices were currently the lowest since June.
She said “those who switched their accounts are now missing out on savings of up to €1,000 a year, and that’s coming on top of increases in bills of up to €2,000 a year.” She said many facing into the winter “will be choosing between feeding their families and heating their homes”.
“The result is that the energy market here is increasingly resembling a cartel, with almost no real choice for customers.”
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Raising the issue during leaders’ questions, she asked Taoiseach Micheál Martin what power the Government had to “ensure that energy companies are passing on reduce costs and are not gouging their customers”. She also asked if the Government had acted to give the energy regulator power to regulate the exorbitant charges.
The Taoiseach acknowledged that “today’s price is the lowest since June”. However, he said
most utility companies based prices “on future and forward contracts”, and because of that the “recent drop in spot prices may not immediately translate into lower electricity and gas bills for customers”.
Ireland spent €8.3 billion on imports of energy products in the first eight months of this year, compared with €3.4 billion last year”, an “extraordinary” difference.
He hoped that customers would receive the cuts in prices “but there are other issues”. The drop in costs could be due to temperature “but I also think we need to reflect on the fact that the European Union again working together” has had an impact in creating the storage levels now in place and that has had an impact on the markets.
The work “towards a more sophisticated nuanced approach to price caps and so on is having an impact on the market as well”.
Reduced consumption had also had an effect. “That is because people clearly are fearful of the prices. But it also points to the inadvisability of going for a blanket cap” proposed originally by the UK and also in Ireland. But such a move “would incentivise consumption”.
Yet he said that “no one size fits all”, and markets within the EU were different with different energy mixes “and that’s what makes it very complex”.
In Ireland “we import 75 per cent of our gas from the United Kingdom and 25 per cent we get from the Corrib gas field. So to a certain extent we’re more dependent in terms of what happens on the London market than necessarily across markets within Europe.”
Ms Murphy again asked the Taoiseach to address the issue of the minuscule benefit from switching suppliers, the standing charges and the powers the regulator has “to really deal with this”.
The Taoiseach said this energy crisis surpassed even that of the 1970s so that was also “feeding into the price on the market”. The Government had taken unprecedented moves to provide very substantial payments through social protection, along with the energy credits and other initiatives to try and enable people to get through the winter. “Hopefully this trend will continue beyond the winter, which would be great news.”
