Big increase in the number of households in arrears on their energy bills, according to CRU

Irish households have been hit with huge energy price increases over the past two years and currently pay among the highest energy prices in all of Europe.  

So it's unsurprising that some households may be struggling to stay on top of their gas and electricity bills.  

However a new report from the Commission for Regulation of Utilities (CRU) underlines the scale of the problem.  

Looking at the numbers 

According to the CRU, in the second quarter of this year (April to June) just under 256,000 households were in arrears on their electricity bills. 

This represents 12% of all households and is a huge jump of over 55,000 compared to the previous quarter and an increase of almost 39,000 compared to the second quarter of last year.

A likely reason for the jump is the recent end of the energy credits. In March of 2022 the Government paid a €200 electricity credit to all households. And this was followed by three more €200 credits between November 2022 and April 2023. And some suppliers, such as Electric Ireland, paid further credits to their own customers. On top of this the Government reduced the rate of VAT to 9%. While those in receipt of the fuel allowance got an additional €500.

All these measures undoubtedly helped households stay out of arrears over the past 18 months or so despite electricity prices reaching record levels. But as the credits have been paid and used up, the numbers in arrears are now creeping back up.   

For gas, just under 168,000 households were in arrears in the second quarter of 2023. This represents a fairly hefty 24% of all gas customers and is a jump of over 7,500 compared to the previous quarter and an increase of over 27,000 compared to the second quarter of last year.

Should we be worried?

Although the number of households in arrears is increasing, the numbers are still close to longer-term averages believe it or not. For now at least. 

For example, at the start of 2022, over 283,000 households were in arrears on their electricity bills. So the most recent number is still well below this figure. It's also only slightly ahead of the 253,880 who were in arrears at the start of 2020, before the energy crisis even began.

And traditionally around 11% to 12% of households have always been behind on their electricity bills - the same percentage as now.    

With gas it's a bit more worrying.

The number in arrears is now at a record high of almost 168,000 - equating to 24% of all households that use gas. This is up from just over 136,000 or 20% of households at the start of 2020. The lack of Government credits for gas customers has clearly been a factor in the numbers struggling. 

And with energy prices set to remain at extremely high levels until at least next spring, it's highly likely we'll see thousands more households fall into arrears over the coming months. 

Help in the upcoming Budget?

The energy credits and extra fuel allowance payment have been instrumental in keeping tens of thousands of households out of arrears over the past two years as energy prices reached record levels. So it’s unsurprising, but still worrying, to see the number in arrears creep back up following the end of their payment.

These figures will no doubt put pressure on the Government to provide further support for energy bills in the upcoming Budget seeing as prices will remain at extremely elevated levels this winter. 

Although all suppliers have announced moderate price decreases over the past few weeks, energy costs this winter will still be around DOUBLE what would be considered normal levels. 

Disconnections 

The latest CRU report also looks at disconnections.

Over the past few years there has been a ban on energy disconnections for non-payment of bills during the winter months. There was also a ban during the Covid lockdowns.

But disconnections are very uncommon in Ireland anyway and are only carried out as the last resort.  

So far this year, just under 300 electricity customers have been disconnected or around 0.013% of all households. This compares to just over 2,000 customers (around 0.09%) for all of 2022. 

Avoiding arrears and disconnections

There are a number of supports available to help you manage your energy bills and avoid going into long-term arrears and then being disconnected. You can read about these here.   

But really the most important thing is to engage with your supplier. 

Energy suppliers offer a range of supports to help customers who are having trouble paying their bills. And by law, no supplier is allowed disconnect a customer as long as they're constructively engaging with their supplier. The last thing a supplier wants to do is disconnect a household and this is only ever carried out as a last resort.