Members of "Derry Against Fuel Poverty", last month, protest outside the Antrim-based offices of Firmus Energy after a fourth successive gas rise since April 2021.
“Disconnection is a very last resort,” is the message from Firmus Energy's Interim Managing Director, Niall Martindale, to Derry households struggling to pay their gas bills.
Firmus Energy has faced criticism over the last 10 months with gas bills rocketing up by a total 194 per cent over that period – increases that have hit a number of homes in Derry hard with some having to make difficult choices on whether to use what little money they have on heating or to have food on the table to eat.
Choices that have led to local Foyle politicians speaking out and people travelling all the way to Antrim to protest outside of Firmus' headquarters against the price rises.
With no sign that the latest increase will be the last, many are worrying that they could be cut off and left with no heat, no hot water to wash in and no gas to cook food with.
However, Martindale insisted that such a measure is a last resort and advised customers who are finding it hard to pay their bills get in touch to see what can be done.
He said: “The first thing I will say to customers is that if you are struggling to pay, get in touch. Don't leave it – get in touch.
“We have formed very strong relationships and partnerships with organisations who are more 'specialist-placed' in terms of offering support to customers when it comes to specific needs and requirements and helping us at the 'coalface level' understand the challenges around customers such as getting into debt and so forth.
“One thing we make sure of is that our customer service is up to speed, cognisant-aware and trained in these matters. From the customer's point of view, we encourage the customer to get in contact with us in the first instance.
“Anything we can do, and I can assure you and any customer who phones, we will do it. Whether it's a payment plan or something more specific in terms of a particular vulnerability – be it financial or something else – we have partnerships with organisations and we will actively and considerately sign-post customers towards their direction.
“I can assure you that disconnection is a very last resort.”
But why are prices going up so steeply? Firmus has been accused of doing this out of greed but their most recent accounts filed to Companies House show no dividends have been paid out to their directors. So why have they done it?
Martindale explains: “The very first thing to say there is that the drivers behind our tariff increases are absolutely out with our control. They are primarily and fully driven by the commodity markets for natural gas.
“It is traded in the UK and we trade there with all the other suppliers in Northern Ireland on what is known as the NBP – National Balancing Point – as a trading forum in the UK. That is the key driver to all the price increases that we have unfortunately had to put through in the last number of months.
“Back in the summer of 2020, gas was trading as low as ten pence per therm. Today, that's heading up towards the £3 mark.
“From that point in 2020, what we saw happening in Asia (the slowing down of economic growth) and the breakdown of hydro-power in South America. You might think 'my goodness this is miles away' but it has a real impact on global markets.
“So what happened through 2021 was a lot of the demand for gas came if the form of liquified natural gas from the big tankers on the sea. That was primarily redirected towards Asia and that ensured prices were really, really high on the global markets.
“We then saw tensions in Russia and Ukraine creep into the markets and that sent prices to a different place. You had this 'almost perfect storm' brewing across Europe driven as far away from Asia and its post-Covid recovery and South America – particularly Brazil where they had problems with hydro-power.
“So demand was driven away from Europe and drove prices higher.”
Interim Managing Director of Firmus Energy, Niall Martindale
However, the gas and energy markets of Asian and South America seems a world away to Joe and Jane Public of Derry whose combined household income cannot budget for the sky-high rises to their gas bills.
Martindale continues: “Derry has been super-important to us as a location and the customer base we have there. In our ten towns market, Derry covers a third of that. We've worked really hard with our customer base in the last fifteen years and developing that market.
“One of the frustrations we feel is that so much of this is out with our control. We want to bring customers – and support them – on the journey that we are all going through at the minute. As you can imagine, Firmus Energy is not a quiet place to work at the minute. We're in the eye of a storm and we're trying to bring customers through that with us.
“One of the things we would typically get is the fact that we're the only supplier of natural gas in the Derry area. What we are finding difficult is imparting to customers the complete story and that is, we're regulated. So the market in Derry has been open to competition since 2015. The market has been there for any other supplier to come into but with the money that can be made off that market would suggest that nobody else wants to come into it.
“It is a very tight market for us to operate. We are doing our damndest as we see it to support customers through what is a really challenging time.
“I hear of the 'heat or eat' situations and it's not just Derry where its happening either. We are conscious of it.”
Currently, Firmus are the only game in town regarding gas but if, in the near future, a rival firm moves in and offers a lower tariff, doesn't Firmus run the risk that people have long memories and will remember how badly their pockets were stung with the price rises over the last 10 months?
Martindale said: “We absolutely accept that if a rival firm does move into the Derry market, we could lose customers who not only might like any special offers the new firm may offer but because they remember the prices rises they had when they were with us.
“What's happening is very frustrating for us. Maybe I'm stating the obvious but we don't want to put our prices up – it would be a much easier place for us to put our prices down.
“We've demonstrated that in the past. As soon as prices come down, we've been the first to react to those movements in prices – that will not stop. We will not be backwards in doing so.
“But where we are at the minute, I will say it again, we are subject to the global prices on the markets and our tariffs are reflecting that. They are constantly kept under review
“It is complex and our sympathies are with all our customers right across our ten towns – particularly in Derry. We are a regulated business and the regulator ensures transparency of price. For every increase we do in the ten towns, we are subject to scrutiny from the DfE (Department for the Economy) and the Consumer Council for Northern Ireland. You've got them assuring people that the increases are market and cost-reflective. So our hands are tied in that respect.”
The Department for Communities recently unveiled its Emergency Payment Scheme – administered by the Bryson Charitable Group – where those in need and fit the eligibility criteria would receive £200 to help them with their energy bills.
Firmus in particular drew attention to themselves making a contribution to the Scheme.
But how much is that contribution and wouldn't they have been better advised to skip the middleman – the Department for Communities – and pass this contribution directly to their own customers themselves?
Martindale continues: “There are eleven companies that contributed to that scheme. I'm not going to disclose the figure that we contributed but what I would say is that we contributed higher than what is our market share.
“If you took the eleven companies and divvied up their number of customers in Northern Ireland, we significantly punched higher than our weight in terms of what we contributed.
“The reason the Government and the DfE are keen for Bryson to be involved, is because of their ability to access information that we ourselves don't have access to – such as which households have people on benefits and so forth.
“No supplier would have that information and therefore, it would provide a layer of challenge that would make that scheme (for the suppliers) much more difficult to administer. Bryson has the tools to access a customer's legitimacy for the scheme. So that works.
“Over and above the monetary contribution, we have had two and a half people every week, since that scheme was announced, monetarising vouchers. We have a customer service set up of approximately eight people and we have had to dedicate twenty per cent of those people strictly to administer the vouchers.
“What Bryson brings to the party is an ability to better get the money to where it is believed it is better best used.”
An election for the Assembly in Stormont is coming. Some that are campaigning to get elected, such as Derry Councillor Shaun Harkin of People Before Profit, say they will – assuming the DUP don't throw their toys out of the pram again – be pushing for the Executive to introduce a Hardship Fund to help people in need.
Would Firmus decide to work with the Executive if a Hardship Fund is proposed and put into place?
“There would be no deciding,” insisted Martindale. “We would be party to any conversation that supports customers – full stop.
“What we're going through at the minute is absolutely unprecedented. We've never seen anything like the challenges we've seen within the business right now. That's not at all to dismiss the impact that all of this is having on customers – we are fully cognisant of that.
“We are fully prepared to work with anybody to support customers and help them get through to the other side of all of this.
“We would be happy to talk to anybody and we would be fully engaged in those conversations.”
“Also, if the Government were to drop VAT from energy bills, that would help. Any help is good help quite frankly.”
The last set of accounts (for up to December 31, 2020) filed to Companies House by Firmus had a passage about their financial projections for June 2022 which read: “(Projections to June 2022) show that the Company continues to be cash generative”.
Given what has happened since those accounts were filed, is the company still on course to meet that projection?
Martindale said: “Our initial projections for June 2022 has had to be amended significantly. The third increment of increases was done with a lot of pain because we didn't want to do that.
“But, and to be frank, we couldn't afford not to. The level of prices on the commodity market was such that, to be perfectly blunt, we were burning through cash at a rate of knots that wasn't sustainable.
“We are a strong business in a strong place but we want to keep it that way.”
If you are a Firmus Energy customer and are currently struggling with your bills, Firmus advise you to contact them as soon as possible on: 0330 024 9000.
Also, the following organistations offer advice and support:
Advice NI – visit: adviceni.net. Email: email@example.com
The Consumer Council – freephone: 0800 121 6022. Visit: consumercouncil.org.uk. Email: firstname.lastname@example.org
Age NI at Advice & Advocacy – freephone: 0800 808 7575. Visit: ageuk.org.uk/northern-ireland
Christians Against Poverty – telephone: 01159 659570. Email: email@example.com
NI Energy Advice Line – freephone 0800 111 4455
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