Is energy credit the best option?

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peemac

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Government seems to be set on more energy credits.
€200+ to every electricity account in the country including A rated homes and holiday homes (I gain from the latter) before and after Christmas.

Would a maximum price per unit not be more beneficial which would be inclusive of any "new customer discount"

Effectively for a 6 month period, market competition is suspended and a rate of 35c per unit is paid by everyone and those with smart meters/ night meters get additional night time benefit.

That means a lot lower subvention for holiday homes and A rated homes, and still expensive enough to encourage energy saving.

Rate would also be applied to many business users (they have different grades, so easily applied to small and medium businesses)

For those who still have difficulty, the normal supports are still there too.


Maybe I'm becoming a little socialist in my maturing age, but getting €400+ free money for a holiday home when I will have very little usage feels wrong.

Similarly, if I had an A rated home, this would probably mean free electricity.
 
The govt has to balance up what it can afford, what it can do with current legislation or minimal new legislation, what it can repeat if needed, future market effects, time/resources required to implement the intervention, time it will take to have an effect, etc. etc.

A potential problem with direct price caps and controls is the consumption paradox (Jevons's paradox) where lowering/freezing cost can increase consumption. This would be dangerous as we need to reduce energy consumption regardless of any price rises.
 
Yes it is the best option, I know there are high profile personalities in the media and ngo's trying to Diss this approach but it is the correct approach. The government is elected and answerable to the public not media personalities or ngo's
 
joe sod said:
Yes it is the best option, I know there are high profile personalities in the media and ngo's trying to Diss this approach but it is the correct approach. The government is elected and answerable to the public not media personalities or ngo's
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It is very much not the best option. The government will never do anything that requires a bit of data analysis or risk Johnny not getting something his neighbour Tommy is. At minimum it should have been a graded offset based on income (Re consumers only, Businesses need a different approach). It's also incredibly short term and setting an expectation of needing to keep that up while prices are up (for years?).

The best option is a targeted set of solutions, and possibly a new financial mechanism that allows bills to be smoothed out over years versus receive and pay. But that would require work and isn't an easy sound bite.
 
ThatNewGuy said:
At minimum it should have been a graded offset based on income
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I totally agree, I’m in the fortunate position that the extra €200 in my case will go towards works on the house, a new car and other expenditure that is just driving up inflation further, madness.

But I suspect it is not as simple as it sounds to implement something that is income dependent in a way that won’t delay the payment months and months? Increasing the Fuel Allowance will miss most of those struggling in the low-middle, increasing tax credits will miss all those who aren’t working, increasing state pension will give it to plenty who do not need it, giving the electricity companies access to income data so they can manage it would be a data privacy nightmare and I’m not sure they have a way to link tax payer data (PPS numbers say) to the names/addresses they live off. Is there an obvious way to do it that I (and the Dept Finance/Revenue) are not seeing?
 
peemac said:
Government seems to be set on more energy credits.
€200+ to every electricity account in the country including A rated homes and holiday homes (I gain from the latter) before and after Christmas.
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There is a big equity issue here it's true and lots of people who don't need it will get it. But it is very difficult to roll out any kind of well-targeted approach at short notice given the need for means testing on a mass scale. And the people who don't need it are the ones paying for it in higher taxes anyway!

I know very little about the energy market but there are many EU and national legal issues with interfering the system for setting prices at retail and wholesale level and it may be simpler to leave well alone. There are big things the government can do here (like support an LNG terminal) but fiddling with price-setting short term is not one of them.

Price supports also have the problem of having an open-ended Exchequer cost. €200 per dwelling is really easy to budget for and implement. It also has the added benefit of being very simple to withdraw compared to other intervention mechanisms.
 
Is it difficult though to just allow one individual receive it once ? This would stop a holiday home receiving it although it may be in spouses name I guess.
 
elcato said:
Is it difficult though to just allow one individual receive it once ?
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Extremely.

Electricity suppliers don't have PPS numbers and can't cross-check against other databases.

Even still you could have a landlord with a few properties in his name who is supplying electricity to tenants as part of the rent.

Then as you say you could have PPR in wife's name, holiday home in husband's name, etc. Another couple with both bills in only one party's name.

A credit on every bill is administratively by far the simplest option.
 
Zenith63 said:
I’m not sure they have a way to link tax payer data (PPS numbers say) to the names/addresses they live off. Is there an obvious way to do it that I (and the Dept Finance/Revenue) are not seeing?
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LPT is linked to PPSNs and - if GDPR allows it - could possibly be linked both to property owner's primary address and annual income. Not 100% foolproof, I grant you, but might be a useful starting point.
 
Groucho said:
LPT is linked to PPSNs and - if GDPR allows it - could possibly be linked both to property owner's primary address and annual income.
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This would be a massive, multi-year project for something that is supposed to be temporary.

Consider a two-story house over basement both parts rented. This will have one ID for LPT, two electricity meters, two eircodes (as two letterboxes), one folio number, two RTB numbers. Matching all of these is incredibly complex and prone to error.

This was all investigated and discarded at length in 2012-14 when LPT and water charges were being brought in.
 
NoRegretsCoyote said:
This would be a massive, multi-year project for something that is supposed to be temporary.

Consider a two-story house over basement both parts rented. This will have one ID for LPT, two electricity meters, two eircodes (as two letterboxes), one folio number, two RTB numbers. Matching all of these is incredibly complex and prone to error.

This was all investigated and discarded at length in 2012-14 when LPT and water charges were being brought in.
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Hence my concluding observation (which you neglected to include in your quotation) that it's "not 100% foolproof but might be a useful starting point." :rolleyes:

Any suggestions yourself?
 
Groucho said:
Any suggestions yourself?
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There is no way to quickly and reliably assess energy poverty for every household and to roll out supports on that basis.

Any short-term approach is going to be quick and dirty. A credit on every bill is the best of a bad lot of options.
 
Pinoy adventure said:
Well if you think of the free €200 credit previous and perhaps another load of credit fairly soon,sure why not go all out and just make it free.
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Because that's a ridiculous suggestion.
€200 is about 10% of an average household's bill.
You're suggesting making the other 90% "free"?
Remember that even the €200 is not "free" and we'll collectively pay for it in some way eventually.
 
Pinoy adventure said:
Well if you think of the free €200 credit previous and perhaps another load of credit fairly soon,sure why not go all out and just make it free.
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That would cost the Exchequer billions every year versus a few hundred million, makes no sense.
 
Pinoy adventure said:
Well if you think of the free €200 credit previous and perhaps another load of credit fairly soon,sure why not go all out and just make it free.
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The biggest problem I would have with this is that everyone would just leave stuff running all night as it would not cost them. The same goes for capping bills. If someone reaches the threshold they'll just continue wasting more.
 
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