The country's largest business representative organisation has written to the Government to outline problems with the Temporary Business Energy Support Scheme (TBESS) that are holding back uptake among firms.
In the letter to Minister for Enterprise, Trade and Employment, Simon Coveney, Ibec says it has identified several challenges with the scheme’s scope, design and eligibility criteria.
These include the 12-month reference period because between late September and December of 2021 wholesale energy costs were abnormally high.
"Consequently, many businesses simply cannot show a 50% increase on that reference period, particularly for the first three monthly claim periods," wrote Fergal O’Brien, executive director, lobbying and influence at Ibec.
The employers’ group also seeks the participation of landlords as many small and medium-sized businesses do not have their own electricity or gas meter number and instead pay utility charges directly to their landlord or as part of their overall rent.
"This is commonly seen in properties with multiple business tenants," Mr O’Brien said.
"Because landlords are ineligible, their tenants must still shoulder the energy cost element of their rent. In some cases, the landlord has yet to pass through these energy costs to their tenants and increases can be expected in the coming months."
Mr O’Brien also argued that the €30,000 cap on payments continues to cause problems for several sectors with multiple sites and suggests the hard cap be adjusted "to take regard for threats to viability or reductions in activity or opening hours for businesses."
Ibec also proposed that the window for retrospective application be extended, which would be important to give businesses that were heavily occupied during the Christmas and January sales period sufficient time to apply.
The scheme should also be extended to the end of this year, it suggested, as businesses are expecting further cost increases and market volatility over the remaining 11 months.
Mr O’Brien also wrote that more hands-on-support may be required "to guide and support SMEs through the application process", while further promotion would help raise awareness among businesses that were busy over Christmas.
On Monday, Revenue extended the deadline for businesses to submit claims under the Temporary Business Energy Support Scheme (TBESS) for September because of the low level of applications received by the deadline of the end of January.
By that point 18,700 businesses had registered for TBESS and over 11,200 claims had been approved valued at just €22.7 million, with €18.2 million already paid into business bank accounts, even though the budget for the scheme has been set at €1.2 billion.
Announced by the Government in Budget 2023 TBESS enables companies to claim back 40% of the increase in their electricity or gas bills and will help off-set some of the crippling costs of recent electricity and gas price rises.
Businesses will require their electricity and gas bills to complete the process which will enable them claim up to €10,000 per month depending on their energy usage and costs.
In the letter, Ibec also says the Ukraine Enterprise Crisis Scheme (UECS) is the scheme with the greatest potential to protect vulnerable but viable energy intensive and medium-large firms.
"However, like with TBESS, UECS is experiencing lower than expected uptake," it explained.
"The main reasons for this are the restrictive eligibility criteria and scale of support given to each beneficiary."
"As Ibec’s energy survey shows, of the 39% of companies who reported a doubling of their energy costs in 2022 compared to 2021, only one-quarter would qualify for the UECS scheme."
"We believe changes are needed now to ensure the scheme is aligned with the substantial revisions to the EU TCF."
Overall, Ibec said its recent survey found average business spending on gas rose by 90% on 2021 levels, while average expenditure on electricity rose by 60% on the same reference period.
