Energy companies experienced a significant increase in the number of customers who were unable to pay their gas and electricity bills last year and the situation is expected to get worse in the months ahead.
"Bord Gais wrote off €3m worth of bad debt in 2009 and the figures for 2010 will show a very significant increase," a spokesman for Bord Gais admitted last week. He added that with customers receiving large winter gas bills allied with reduced pay packets this month, further defaults are expected.
A large portion of the bad debts come from so-called 'debt hopping' in which customers run up large bills and then switch to another supplier without paying the bill. "This is a major issue for the whole sector and one that the energy regulator appears unwilling to address," the Bord Gais spokesman said.
A spokesman for the ESB said that there had been a significant deterioration in the company's bad debt provision in 2010 which, at €20m, was twice that recorded in 2008. But the spokesman added that there had been a good response from customers getting into difficulties, with 150,000 now on budgeted payment plans.
Airtricity said that around 21,000, or 5% of its customers, were in arrears.
"Airtricity also has serious concerns over debt hopping, particularly as customers who pay their bills end up paying for those that don't. We are currently in discussion with the other companies and the regulator to address this issue," said an Airtricity spokesman.
After a moratorium on disconnections from the middle of December over the cold spell and Christmas, disconnections have recommenced but only for those who are unwilling rather than unable to pay.
The ESB said disconnections were running at about 900 per month last year and it had managed to keep it at that level so far. Many disconnections were as a result of people leaving their home or emigrating, the spokesman said.
The Bord Gais spokesman said there were currently about 20,000 customers facing the threat of disconnection.
"The company will only disconnect as a last resort. This is a sensitive issue, but it is also a business issue," he said.
Bord Gais said it made every effort to work with customers who had got into difficulty and that like all the other companies it worked closely with St Vincent de Paul and Mabs.