McGrath says energy companies have not adequately explained delay in passing cuts to consumers

Energy companies have not adequately explained the delay in passing on cost reductions to consumers, Minister for Finance Michael McGrath has said. He told the Dáil there needed to be a “faster pass through of the dramatic reductions in wholesale electricity costs to consumers”.

Mr McGrath was speaking during Leaders’ Questions where he was responding to a suggestion by Sinn Féin TD Pearse Doherty that “we live in a rip-off republic”.

Mr Doherty referred to European Commission figures which he said “confirmed that this State is the most expensive place to live in the European Union”. He said energy costs were the second most expensive in the EU, and Irish people were also facing the most expensive health costs and falling living standards.

This was the “economic performance” of the Government and it has brought about a situation where “workers and families are fleeced by the highest prices in Europe, getting less and less for their hard-earned money”.

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He said the “rip-off” was nowhere more evident than in the “extortionate energy bills” people have been paying for months and despite “a drastic fall in wholesale prices energy bills remain sky high”.

Mr Doherty said Sinn Féin had asked the Commission for the Regulation of Utilities (CRU) to carry out an investigation, and asked Mr McGrath if the would support this request. He also asked if the Government had called in the energy companies to discuss the issue with them.

Mr McGrath disputed Mr Doherty’s “central thesis” that Ireland is “some kind of basket case”, pointing to 2.6 million people in work, continued economic growth, budget surpluses because the country’s finances are being well managed and better health outcomes. He outlined how the Government has provided around €12 billion in measures to help with the cost of living, including four electricity credits.

Mr McGrath acknowledged that energy costs were a key issue for households, and said “we do need to see a faster pass through of the dramatic reductions in wholesale electricity costs to consumers”.

He added: “It is my view that we have not to date had an adequate explanation for the delay in pass through of those reductions. We all understand there is complexity. We understand there is a lag. We understand futures contracts and hedging and the instruments that commercial companies enter into but that said there is undoubtedly scope over the weeks and the months ahead now for the energy companies to reduce the prices that consumers are being charged.”

He said Minister for the Environment Eamon Ryan and his department “are actively engaging and meeting with the companies to fully understand those details and to understand those complexities, and to make the case for a reduction in the prices that the consumers we represent are currently facing”.

Mr Doherty asked again if the Government would support an investigation by the CRU.

Mr McGrath said statutory bodies like the Competition and Consumer Protection Commission and the CRU have “extensive powers” and the Government “does not set prices”.

“We, of course, have responsibility in terms of the overall environment within which these prices are being set, and we absolutely have an obligation to call out, where we see it, that there is a justification for a greater pass through to the consumers at a retail level of the dramatic reductions that there have been at a wholesale level.

“I have no doubt they’ll come, but they need to come quickly because it shouldn’t fall on taxpayers to be stepping in and supporting households who are paying higher prices than the market justifies at this time.”