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July 2020

Jun

CRU implements COVID-19 supply suspension scheme

Josephine Lord
Josephine Lord
19 June 2020

On 1 May, the CRU set out the details of its decision to implement a temporary supply suspension scheme for eligible SME electricity and gas customers due to the impact of the pandemic.

It said that the unique and extraordinary circumstances of the current situation require a modification to the current approach to network charging. The objective for the scheme is to:

  • Avoid unnecessary disconnections and reconnections for SMEs.
  • Reduce the charges incurred by SMEs whose premises are temporarily closed due to COVID-19 restrictions.
  • Facilitate SMEs rapidly returning to operation once the COVID-19 restrictions are lifted.
  • Support energy suppliers who would continue to be liable for related use of system and energy charges during COVID-19 restrictions.
  • Mitigate the risk of bad debt and liquidity constraints for the energy sector during and post the COVID-19 period.

The regulator considered that it is appropriate to facilitate SMEs be able to have the financial advantages of a physical disconnection where such disconnections are not possible during the current travel restrictions.

Any customer that avails of the scheme will have no energy or network charges billed for their business premises supply point for the duration that the measure is in place. In effect, the consumption for their supply point would be estimated at zero and their fixed network charges suspended.

All but one of the eligibility criteria that an electricity or gas business customer must fulfil are identical for both fuels:

  • The customer is not an essential provider, as defined by the government in the context of COVID-19.
  • The customer was trading before 13 March 2020.
  • The customer’s premises have been closed as a result of the COVID-19 restrictions and will remain closed for a continuous period from 28 March and the date the relevant COVID-19 restrictions are lifted.

In addition, electricity customers must be in the DG5 or DG6 use of system charging categories, while gas customers must be Non-Daily Metered (NDM) Industrial & Commercial customers.

As part of its decision, the CRU separately directed ESBN, GNI and EirGrid to finalise the processes to implement the scheme. The regulator said ESBN and GNI proposed different methods that can be implemented quickly, will not require changes to the market systems and can by unwound at the end of the current COVID-19 restrictions. It set out the key requirements in both the electricity and gas processes. These include that suppliers are to maintain records of the request and be responsible for communications with the customer. To manage and track the scheme other market procedures, such as change of supplier, will not be carried out at a site while it is in place.

Where the supplier or network operator becomes aware that a customer in the scheme was operating during the period or is otherwise ineligible, the relevant charges will be applied. If a customer who was eligible but becomes ineligible due to a change in circumstances, the customer must inform the supplier within five days.

Under the principles set out for the scheme, the CRU said the network companies will subsequently recover all costs that have not been recovered during the period of the COVID-19 supply suspension, through the regulatory approved network tariff process in “subsequent tariff years”.

The scheme is due to be in place for three calendar months but may be terminated before this; it will be reviewed and evaluated while in operation.

This was a timely decision that will help businesses that have been temporarily closed by the crisis. However, it was also a practical recognition of circumstances. In the aftermath, the CRU will need to determine the scale of the costs to be recovered, how to implement it and over what timescale.

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