Government must act urgently to ensure energy company hedging strategies are transparent and accountable – Darren O’Rourke TD
Sinn Féin spokesperson for Climate Action and the Environment, Darren O’Rourke TD, has called on the government to urgently address the uncertainty surrounding Irish energy company hedging strategies which, we are told, are the primary reason for record high electricity prices at a time when wholesale gas prices are at a 2 year low.
The Meath East TD says the Commission for Regulation of Utilities (CRU) must be specifically mandated by government to monitor and regulate hedging practices, so that customers can be protected from unfair costs.
Teachta O’Rourke said:
“Energy costs are far too high and putting huge pressure on customers. People simply cannot afford the huge bills that are being asked of them. “In Ireland, we pay the highest electricity prices in the EU, adding almost €1000 to the average annual bill, at a time when wholesale energy prices are at a 2 year low.
“Government, the CRU and energy companies blame hedging strategies for the sustained high prices but, in truth, there is no oversight whatsoever of these strategies. Government, the CRU and, by extension, the general public are expected to take it at face value, to trust energy companies to pass on savings when they see fit. That’s simply not good enough.
“The government must act to ensure there is transparency and accountability in the energy market. They must empower the CRU to monitor hedging practices and to tackle anti-competitive practices.
“Sinn Féin, through the Oireachtas Library and Research Unit, has conducted a comparative analysis of the powers of energy regulators across Europe and it is very clear that the CRU is limited in its powers. Compared with Ofgem in Britain, the Bundesnetzagentur in Germany and the Commission de Régulation de l’Énergie in France, for example, it is clear that the Irish regulator needs additional powers and it needs to exercise existing powers more rigorously.
“The CRU should be specifically mandated to monitor and regulate hedging practice. Its powers should be strengthened to monitor anti-competitive behaviour. It should have an expanded role in consumer protection and an increased role in energy poverty monitoring and response – including through the oversight of an expanded Energy Efficiency Obligation Scheme. These are practical measures that would ensure the regulator is fit to hold energy companies to account.
“In addition, to ensure transparency and accountability for the public, an improved reporting schedule should accompany these changes. The CRU should publish, on a monthly basis, the average price of natural gas and electricity supply and the average margin received by natural gas and electricity suppliers. They should publish an annual report regarding the compliance of electricity and gas transmission and distribution operators with an agreed code of conduct and an evaluation of the independence of these networks. They should publish a quarterly report on the functioning of the retail electricity and gas markets. This report should examine the changes in the prices paid by domestic and business customers on the retail market.
“This enhanced reporting is essential and would serve to bring the Irish regulator in line with European counterparts. The Irish public deserve nothing less.
“Sinn Féin has repeatedly raised the alarm bell on rip-off energy bills but the government continues to bury their head in the sand. Where does hedging end and profiteering begin? The reality is we do not know. Hedging as a practice remains completely opaque while workers and families are crippled under the weight of sky-high bills. This urgently needs to change. We are therefore calling on the government to take control of this situation once and for all.”People need a break from crippling energy costs without delay.”
The Library and Research Service report is available to view here: