Energy Action
Fuel Poverty Conference
Dublin Castle
6 February 2012
Energy Affordability Policy Challenges
Michael Culloty
National Social Policy and Communications Officer
MABS 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
2
Credit card
3
Mortgage
4
HP loan
5
Causes of Energy Poverty
Strategy 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 Poverty
Strategy 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 Poverty
Strategy 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