Energy ActionFuel Poverty ConferenceDublin Castle6 February 2012

Energy Affordability Policy - Challenges

Michael CullotyNational Social Policy and Communications OfficerMABS National Development Ltd.

Outline Agenda

• About MABS

• Objectives

• Utility debt - MABS Statistics

• Affordable Energy Strategy

MABS – Free, Confidential and Independent

Objectives:

1. The provision of money advice to people in debt or in danger of getting into debt

2. Empower them by providing knowledge and skills

3. Promote change in policy and practice 4. Focus on low income families

MABS Statistics

Statistics:• In excess of 26,000 new active cases in 2011

• 52% increase in clients approaching MABS since 2009

• 15% increase in Helpline calls in 2010/11 (125% increase since 2009)

•70% of clients are social welfare recipients

• 47% of clients have a mortgage

Energy Utility/MABS Operational Protocol

Basic Principles:• is designed to improve operational effectiveness of the energy

suppliers/MABS engagement• enables and commits the suppliers and MABS to work together

effectively to help clients address debt problems in an effective and realistic manner

• accepts that each supplier adopts a different approach to debt recovery and each case of indebtedness is unique

• recognises the concepts of full disclosure and debt settlement• commits energy suppliers and MABS to work together to

formulate a mutually acceptable, affordable and sustainable repayment plan

Note: Protocol focus is on process – but obviously the goal is to avoid disconnection

MABS Statistics contd.

No. Of Clients Approaching with Energy Debts

• 2007 to 2011 Increase of 150%

Client indebtedness approaching MABS with Energy Debts

• 2007 to 2011 Increase of 145%

MABS Statistics contd

• Budgeting Weekly:

Year Quarter Weekly AV usage as % of Weekly Av Income 2007 Q1 9% €445  

2011 Q1 11% €489

MABS Statistics in Context – EU SILC

MABS Stats contd.

Personal loan 1

Utility 2Credit card 3Mortgage 4HP loan 5

Causes of Energy PovertyStrategy for Affordable Energy – three factors/drivers Identified

1. Household Income

• Income adequacy – enough income to participate in society

and exercise choice - Persistent Income inadequacy –

provides recurrent household budgetary management

problems.

• Lack of savings/ access to credit - for contingencies

• Creditor Pressure - Lack of Prioritisation

• Lack of money management/budgeting skills

Causes of Energy PovertyStrategy for Affordable Energy – three factors/drivers Identified

2. Price of Energy

• Price Fluctuation

• Unbanked – no access to cheapest tariff – poor energy credit

history

• Prolonged cold spells

Causes of Energy PovertyStrategy for Affordable Energy – three factors/drivers Identified

1. Energy Efficiency of the Building

• Reduction in demand essential

• Thermal efficiency is basic

• Capital Investment not income support the priority

Affordable Energy Strategy – Key Tasks

Vulnerable Consumers and Codes of practice -(19 , 23, 24 & 45) • A definition: MABS recognises a vulnerable consumer to be someone

who for reasons of age, health or disability, the disconnection of gas or electricity presents a clear threat to their or a member of their household’s health or wellbeing.

• Codes Supervision – More proactive

• Code for non- regulated suppliers – supervision vital

• Reporting – verification – will the Energy Utility/MABS Operational Protocol be included

Affordable Energy Strategy – Key Tasks

Fuel Switching (12 & 20 & 21) • System switching – Local knowledge, capital investment

• Price Switching - Low tariffs available to low income consumers • - Available through the proposed BPA – standing

orders

Aligning income supports (14) – Energy efficiency and demands on income• This demands individual energy and income/ expenditure audits

Affordable Energy Strategy – Key Tasks

Metering: (16)• Acceptance of metering• Self Disconnection• Access to payment methods

Avoiding disconnection (29)• Arrears agreements to be affordable and sustainable• No disconnection for Domestic ‘can’t pay’ consumers• Permission for third party involvement before disconnection

Affordable Energy Strategy Key Tasks

• Strengthening consumer protection (CER) (17)

• Sharing of Data (15) (29) – possible clusters - tailored responses

• Single Points of Contact (37 & 38 & 39) a Local central point for

information and advice

• Information and education (33 to 36) – a Local central point for

information and advice

• Developing local responses (42) – strong working partnerships

MABS

Thank you