As the economy slowly reopens, the ban on disconnections that has been in place for much of the past year, will be lifted.
The Commission for Regulation of Utilities (CRU) has announced that the moratorium on gas and electricity disconnections which has been in place for much of the past year due to the pandemic is to end from 1st June.
This means from June, gas and electricity suppliers can, as a last report, disconnect those who are in long-term arrears.
Speaking about the decision, the chairperson of the CRU Aoife MacEvilly said: "As the Covid restrictions ease and society and the economy opens up again, the time has come to revert to the standard high levels of protection that exist for customers.”
The CRU has also been concerned about a noticeable upward trend in debt levels that it has seen since the ban on disconnections was introduced, which is only storing up problems for customers to a later date it says.
What protections are in place?
It should be noted that there are already strong consumer protections in place for households who get into arrears and a disconnection is only carried out as a last resort.
All suppliers in Ireland are part of the Energy Engage Code, which means they won’t disconnect a customer who is actively engaging with them.
Under the code, suppliers also have to identify customers at risk of disconnection and encourage them to get in contact. They are also obliged to offer a range of repayment options, such as a debt-repayment plan.
So if you are behind on your energy bills, reach out to your supplier as soon as possible. And if they reach out to you, make sure to engage constructively with them and work on a repayment plan.
Also, if you are disconnected and then need to reconnect, you could be hit with a reconnection charge of several hundred euro, which is obviously something you want to avoid!
Are many in arrears?
According to the CRU, around 12% of residential electricity customers (c. 240,000) and 16% of gas customers (c. 110,000) were in arrears at any given time in 2020, which isn’t an insignificant number.
However, despite this, only around 150 to 200 electricity disconnections and fewer than 100 gas disconnections take place on average each month. So as you can see, it’s only ever done as a last resort.
Prepay energy plans
A lot of people like prepay or pay-as-you-go gas and electricity as they feel it helps them budget.
With prepay, you top up your energy account with credit and therefore have one less bill to worry about. More importantly, it also means you can’t get into arrears, so this may be a solution your supplier recommends if you are behind on your bills.
However prepay energy is far more expensive than normal billpay so this needs to be borne in mind. You’ll pay a higher unit rate for your gas and electricity as well as a daily prepay meter charge (along with the standing charge everyone else also pays).
Consider switching supplier
If you are heavily in arrears it often isn't possible to switch supplier. However, once you have your bills back under control, remember that switching is a really quick and easy way to spend less on your gas and electricity each month as you can get discounts of up to 40% or more for a whole year.
Before switching, you may find it beneficial to read our guide that covers the most commonly asked questions in relation to switching energy.
Also, to help you save even more, check out these 15 simple ways to use less electricity around the home. If you’re prepared to take the time to review all of your household expenses, you could save up to €7000.