Durkan: Hargey must issue fuel support payment before next planned gas hike

SDLP Communities Spokesperson Mark H Durkan MLA has written to the Communities Minister, Deirdre Hargey urging her to take serious the plight of people here in the face of yet another price hike.

Gas suppliers have contacted customers this week warning of a 33.57% tariff increase in addition to already record high energy costs.

Foyle MLA, Mr Durkan said Minister Hargey needs to act now to ensure the £55 million Energy Payment Support Scheme is open before the planned timeframe of mid-March.

He said: “If the Minister is serious about protecting vulnerable people and their families she must issue fuel support payments now to allow people to get the best value for money rather than just filling the coffers of energy companies.

“The latest gas tariff increase will mean an average annual increase of over £300 per household and that is in addition to multiple in recent months. Sky-high wholesale gas prices will undoubtedly drive people into poverty. Already struggling households are bearing the brunt of the cost of living crisis and these spiralling costs are completely unsustainable.

“The Minister has a duty to act now to soften the blow of the latest gas hike. People cannot afford to wait until March, they need financial support in their hands now.”

In response, the Department for Communities said that Minister Hargey would be attending a Irish-British Council meeting and will raise the issue, amongst others, of VAT on energy bills.

A spokesperson for the Department said: “The global crisis which continues to see unprecedented energy price rises has meant that those who are already struggling financially are facing added pressures.

“Minister Hargey has announced an Energy Payment Support Scheme which will see a one-off payment of £200 to around 280,000 people who, without additional support, may struggle to heat their homes or pay their energy bills.

“Whilst this Scheme will provide key financial support to those vulnerable individuals who are struggling to pay their energy bills, the scale of this crisis, which is beyond the remit of the Department for Communities, requires a larger government response.

“The Finance Minister has written to the British Government to urge the removal of VAT on energy bills and this week, Minister Hargey will attend the British-Irish Council meeting, to be addressed by Economy Minister Gordon Lyons, whose department has the lead on overall energy strategy.

“The meeting will address the rising cost of energy and Minister Hargey will be making specific asks on VAT and other issues at that meeting.

“In addition to the Energy Support Scheme introduced by Minister Hargey, the Department for Communities provides a Winter Fuel payment, a tax free and non means-tested benefit to help people pay their heating bills. The Payment is made yearly to eligible older people who are born on or before the 26th September 1955.

“The vast majority of Winter Fuel Payments for 2021 have now been issued and to date 290,632 people have received their payment, with a total value of £51.7 million.

“The Department also provides Cold Weather Payments which are payable to eligible persons if the temperature in their postcode area is, or forecast to be, zero degrees or below for seven consecutive days. Support is also available through Discretionary Support and an Affordable Warmth Scheme.

“On December 29, 2021, the Minister also announced the launch of the Emergency Fuel Payment Scheme set up in collaboration with private companies and the voluntary and community sector to provide immediate support to households who are struggling to meet their energy costs and who have a temporary inability to meet their fuel costs. The Department contributed £2million to support this Scheme.”

Meanwhile, Firmus – the North's largest gas supplier – have announced a 33.57% increase to the natural gas tariff in their Ten Towns Network area, one being Derry. This will take effect from February 24, 2022.

Dr David Dobbin, Chairman of Firmus Energy, said: “Unfortunately, due to the sustained high prices in wholesale gas markets we have had no option but to make a further increase in our gas tariff.

“Very low gas stocks; reduced Russian supplies and concerns about the Ukraine situation are all combining to keep European gas prices high. The market crisis has been well publicised, and markets look increasingly like they are going to remain high for some time.

“As we have previously stated this is not just a Firmus issue, but a challenge faced by every local and national supplier of gas and electricity all of whom are affected by the huge upsurges which have taken place in wholesale gas and energy costs.

“Regrettably, we, in Northern Ireland, are at the mercy of the global wholesale gas market and are unable to influence these prices.

“We know this is another unwelcome increase which will have a disproportionate effect on those of our customers who are the most vulnerable.

“We have been providing financial support to the Department for Communities scheme to help those most in need and will continue to do so.”

Commenting on this increase, John French, Utility Regulator Chief Executive said: “In late December 2021, we received a submission from Firmus Energy to undertake an ad-hoc review of their regulated Ten Towns tariff for domestic and small business consumers.

“The review took place against a continuing increase in wholesale gas prices, which have risen significantly since Firmus Energy’s last tariff increase on December 3, 2021.

“We have now analysed and evaluated Firmus Energy’s submission and consulted with the Department for the Economy and the Consumer Council for Northern Ireland.

“This review has unfortunately concluded that a 33.57 per cent increase from February 24, 2022 is needed to reflect the ongoing and exceptional price spikes that have been experienced in the global wholesale market.

“This will regrettably mean that the average annual household gas bill in the Ten Towns license area will increase to £1,293 per year.

“The unparalleled increases in the cost of wholesale energy at a global level have persisted and continue to impact on supplier costs. This has been exacerbated by the overall volatility within the market, with significant price movements occurring on a daily basis.

“Unfortunately there appears to be no end in sight during 2022 for significantly above trend wholesale prices. However, if wholesale prices begin to reduce, our system of regulation in Northern Ireland allows us to act to make sure that reductions are fully passed onto consumers as quickly as possible.

“We are extremely aware of how this further energy price increase will affect consumers in Northern Ireland.

“We established a working group with the Department for the Economy, Department for Communities and the Consumer Council for Northern Ireland to actively explore what practical measures can be brought forward to alleviate the burden of these higher prices on consumers, this winter.

“I am pleased that the Northern Ireland Executive has provided significant funding to support local energy consumers.

“I have written to all energy suppliers and reminded them of their regulatory obligations to avoid customer disconnections and consider other approaches to protecting customers in debt.

“We are also following this up with individual meetings with all energy suppliers, to ensure they are doing all they can to support their customers.

“I would encourage anyone worried about paying for their energy bill to contact their supplier as soon as possible.

“There are also a number of agencies who can provide free and independent advice, including Advice NI, Money and Pensions Service and Christians Against Poverty.”