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Independent

ESB under pressure over ban on cheap rates for people in arrears

 

By Charlie Weston and Aine Kerr 
Tuesday April 05 2011

ENTERPRISE Minister Richard Bruton last night piled pressure on the ESB to change its plans to exclude customers in arrears from availing of new price cuts.

Mr Burton backed calls by the National Consumer Agency for the ESB to allow all customers to benefit from new discounts worth up to €190 a year per household.

"I think the ESB should reconsider this position," he said.

While he has no powers to intervene, Mr Bruton said a big company like the ESB ought to respond to the consumer agency in a "constructive way".

"I think it's important we see customers who are the hardest-pressed getting access to this relief, as well as the commercial customers who are in a stronger position," Mr Bruton said.

And the ESB admitted yesterday it was powerless to stop people who had run up arrears with other utility firms from switching to it to benefit from discounts because it had no way of knowing if switchers were leaving debts behind them.

Around 800,000 householders have switched between ESB, Bord Gais, Airtricity and Flogas in the past two years as the market for electricity and gas has become more competitive. But many of the switchers are what are known as debt-hoppers -- who move from one utility firm to another, leaving huge bills behind. Debt-hopping adds to the cost of gas and electricity for those customers who pay their bills.

Utility companies say that data-protection legislation means they have no way of knowing if the customers they are taking on have run up debts with their previous suppliers.

And the ESB, which is being rebranded as Electric Ireland, has the additional constraint of being classed as a universal service supplier by regulators, which means it has to take on anyone who returns to it.

One-in-10 of Electric Ireland's customers, or 150,000 customers, are unable to meet their bi-monthly bills, and are on a payments plan. Most of these are in arrears, a spokesman for the company said.

Around 110,000 Bord Gais customers are in arrears, and 20,000 Airtricity customers.

Last year, the ESB was forced to write off €20m on bills it was unable to collect, with this passed on to existing customers' bills, the company said.

Customers who have left Electric Ireland but who return to the firm can get discounts of up to 17pc on electricity and 6pc on gas. Existing customers who have been with the company for a year and are not in arrears can get similar discounts.

Ann Fitzgerald, head of the National Consumer Agency, said it was "unacceptable" that a state company was excluding those in arrears on their energy bills, and older people and those on social welfare -- who get fuel allowances -- from the discount deals.

Comparison

Simon Moynihan of price comparison site Bonkers.ie proposed that the Commission for Energy Regulation should bar those who had arrears from leaving the supplier they owed money to, as they do in Britain.

Meanwhile, it emerged yesterday that Electric Ireland may end up being banned from offering discounts if it ends up controlling more than 60pc of the electricity market again.

- Charlie Weston and Aine Kerr

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