ESB Networks to apologise for error that saw customers hit with higher bills over 12 years

ESB Networks is to apologise for an error that saw domestic customers hit with higher bills over a 12 year period.

Its managing director Nicholas Tarrant is expected to express regret for what happened during an appearance at the Oireachtas environment committee on Tuesday.

It was reported last year that a support measure for more than 1,000 of the largest power consumers in Ireland resulted in domestic households being penalised with higher bills.

The measure – known as the large energy users (LEUs) rebalancing subvention – was introduced in 2009 as the then government sought to safeguard jobs in export-oriented industries such as the pharmaceutical and tech sectors in the aftermath of the 2008 economic crash.

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The plan was to deliver annual savings of €50 million for LEUs, which was to be funded through a recalculation of domestic network tariffs.

Households are due to get refunds averaging at €54 before September this year, though the net benefit of the reduced bills will be about €6 on average due to recent increases in energy prices.

LEU rebalancing was removed by the Commission for the Regulation of Utilities (CRU) in 2022.

Mr Tarrant is to tell the committee how the CRU started a review of the necessity of retaining LEU rebalancing in 2021.

It sought an analysis from ESB Networks and EirGrid on the impact of the measure on different customer tariff groups.

ESB Networks later told the CRU that an administrative error had been found in how the rebalancing had been implemented.

Mr Tarrant’s opening statement says: “This error resulted in a misallocation of the tariffs between different customer groups in a calculation in a complex financial model.

“ESB Networks did not collect increased revenue and did not gain financially from this error in the allocation of the tariffs.”

However, he adds: “this was an error in the calculation process for the tariffs made by ESB Networks.

“We regret that this happened and I would like to apologise to the committee that it occurred.”

He says: “The total cumulative impact of this overadjustment between customer groups covering the period from October 2011 onwards is €100.86 million, which equates to approximately €54 per domestic customer in total since 2011.”

Mr Tarrant’s statement adds: “The reversal of this misallocation is under way and is taking place across one year for domestic customers, over the tariff year October 2023 – September 2024.

“The recovery of the matching amount is taking place over three years for large users.”

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