Dáil Éireann debate -
Wednesday, 13 Feb 1952

Vol. 129 No. 3

Committee on Finance. - Electricity (Supply) (Amendment) Bill, 1951—Second Stage.

Minister for Industry and Commerce (Mr. Lemass)

I move that the Bill be now read a Second Time. The principal purpose of the Bill is to raise the limit of advances to the Electricity Supply Board from the Exchequer by £22,000,000—from the present limit of £36,945,000 to a new limit of £58,945,000. It is estimated that that increase in the advances to the Electricity Supply Board will meet the board's requirements on capital account until 1955. Of the £22,000,000 additional capital provided for the board, approximately £12,500,000 will be spent upon increased generation capacity; £4,000,000 upon extensions of the transmission system: £4,000,000 on distribution; and the balance of £1,500,000 on general purposes and contingencies.

While that statement I have made is completely accurate, it is perhaps a rather over-simplification of the financial position of the board. As the House is, I think, aware, it has been the practice of the board to invest its own reserve funds in the undertaking, and in fact at the present time the board's total capital expenditure and commitments on capital account exceed the limits fixed by existing statutes and it is anticipated that by the end of March, 1955, its expenditure and commitments will exceed the limit now being fixed in this Bill. That is mainly explained by the fact that, in addition to the amounts advanced from the Exchequer, there will be a further investment of the board's own reserves, and also by reason of the fact that capital commitments run ahead of expenditure.

In preparing the new generating programme of the board for a period roughly ten years ahead regard had to be given to the board's estimates of the increases in demand for electricity that would occur annually during that period. The present programme now envisaged contemplates that the demand for current will double in the next five years and increase by as much again in the next following five years. It is anticipated that in the present year the board will supply slightly over 1,000,000,000 units. Their estimate is that the demand will reach 1,075,000,000 units. The production anticipated from the board's plant for the present year, that is to say the plant which is now working and some new generating sets which will come into operation during the year, is 1,140,000,000 units.

While that situation appears satisfactory and suggests that the supply of current this year will be ahead of the demand, if not very much ahead of it, it is necessary to qualify that statement in some regards. The estimated output of the board's stations is, of course, based upon certain expectations as to weather and other conditions this year. It is normally the practice of the board to calculate the output of electricity from any plant upon the basis of conditions in an average year. Assuming that this is an average year and that the demand for current is on the scale anticipated by the board, then there will be an adequate supply. But, if exceptional conditions of any kind operate either to increase the demand or to reduce the output of the stations, then some period of difficulty might exist. The position is that the demand for current has grown so rapidly that there is now no question of a stand-by plant and it does not look as if we can make provision for stand-by plant for a considerable number of years ahead.

I do not want to cause any alarm or to lead people to think that there will be any difficulty in securing electricity for any purpose during the present year. The board's calculations are as I have given, but I feel that it is reasonably certain that they have been prepared upon a conservative basis and that, subject to abnormal conditions affecting their productive capacity, they will be able to meet this year and the following year, and in fact if the programme we contemplate is fulfilled to date, in every year the demand for current which is anticipated.

In calculating the output for the present year allowance is made for the coming into operation during the course of the year of four additional generating sets on the Erne producing between them approximately 200,000,000 units of electricity and for the commencement of operation at the Allenwood turf-burning station——

Mr. Dillon

Did the Minister say 200,000,000 units?

Mr. Lemass

Yes.

Mr. Dillon

One-fifth of the entire supply.

Mr. Lemass

——also for the coming into operation of the Allenwood turf-burning station where two generating sets will be in production producing between them 134,000,000 units. In preparing the programme for expanding the generating capacity of the board it is necessary to think a fairly long time ahead. It takes from four to five years to get a new station from the stage of ministerial approval to actual production. I mention that because the expansion of the board's generating capacity during the next four or five years depends entirely upon the completion in time of the new stations approved some years ago and upon which construction work is now proceeding. There is nothing which we can do now, even if it were regarded as necessary, to step up the board's production during that period. The additional stations which are being considered now and on which the board are beginning to take the necessary preliminary steps will only be available to the board from 1956 or 1957 onwards.

The position for the next five years, therefore, is that we are dependent on the board's ability to complete the bringing into production of the stations under construction. These are stations of which, I think, the House is aware because reference has been made to them in previous debates.

Perhaps the best way to illustrate the board's programme to the House is to indicate the position as it is anticipated it will be in each of these next four or five years. In the present year, as I have said, the completion of the Erne and Allenwood stations will give the board capacity to meet the anticipated demand. Next year two additional generating sets at the North Wall generating station will come into production. As the House is aware, the North Wall station was built upon the site of the boiler house originally constructed in connection with the oil refinery project. When that project failed, the boiler house was taken over by the board and a rather small power station was built by the board on the adjacent site. Subsequently, permission was given to the board to extend the station and bring its total capacity to 140,000,000 units. These two new sets will, it is hoped, come into production next year and that will give the board, it is anticipated, an output under average conditions, of 1,204,000,000 units against an anticipated demand of 1,220,000,000 units.

Mr. Dillon

At the North Wall, will it be coal or oil?

Mr. Lemass

Coal or oil. In the following year, 1954, the new Cork coal or oil station will come into production. That station, as planned, will have an output of 200,000,000 units. The position in 1954, therefore, is that the board's capacity to generate current in an average year will yield 1,404,000,000 units against an anticipated demand of 1,380,000,000 units.

In the following year, 1955, the coal and oil station that is being constructed at Ringsend will commence production. At least, two of the three sets which it is intended to install in that station will be in production in that year. That will bring the total average capacity of the board to 1,604,000,000 units against an anticipated demand of 1,570,000,000 units. In 1956 the third set at Ringsend will come into production, and, with it, another 100,000,000 units will be added to the board's capacity. That is the last of the stations in the board's programme as now approved involving the use of coal or oil.

All the other stations planned up to 1961 are based either upon turf or water power. In 1956 the Ferbane turf generating station will commence production. Two generating units will be in operation there producing between them 160,000,000 units, and in that year also the first set of the new generating station contemplated at Bangor-Erris, in Mayo, will also come into production yielding 80,000,000 units. At the end of 1956, therefore, the position should be, if the programme works out as planned, that there will be an average productive capacity of 1,944,000,000 units against an anticipated demand of 1,780,000,000 units.

In 1957, the hydro-electric station on the Lee will be in production yielding 60,000,000 units, while the second generating set at the Bangor-Erris station will also commence operation giving another 80,000,000 units, so that the position for five years ahead is that the board will have doubled its generating capacity. It will have then an average capacity of 2,084,000,000 units. It is also expected that the demand will be doubled and in that year will reach a total of 2,020,000,000 units.

Deputies will appreciate that the estimates which I have given for the increase in the production capacity of the board are reasonably definite. If these stations are completed in accordance with the time schedules arranged, then the board will have that capacity and possibly a capacity slightly above the figures which I have quoted, because, again, there has been an element of conservatism in calculating the output of these stations. The figures which I have quoted as estimates of the probable demand for current are much more speculative. A variety of circumstances can increase or decrease the demand above or below the estimates during that period. Again, I want to emphasise that in the programme as it stands there is no reserve, at least no very substantial reserve, for very bad years or against a substantially higher demand. While I think the situation is reasonably secure, we have to take into account the possibility of a repetition of the 1933 experience which was the worst year that the board experienced since it was established. If that should happen, then I think we would be forced to do what we nearly had to do in 1933, and that is to take temporary steps to curtail the consumption of current. But a year like that, according to the records, does not occur more than twice in a century, and it is a reasonable prospect that in these five years the board will be able to meet fully the demand for current, the rapidly expanding demand for current, during that period.

As I have intimated, it is necessary now to take decisions regarding the programme for the next following five years. Although that programme has been drawn up, I intend to avoid giving anything in the nature of firm dates for the completion of individual projects, first, because any such information would be of doubtful value, having regard to the unpredictable things that might happen during the next five years, and second because I have asked the board to consider whether there is any action which they could take which could bring forward any of these new stations in their programme, any action which they could take, and which would permit them, to have them completed and in production earlier than is at present anticipated. Work upon these additional stations is either in preparation or in progress. In the remaining cases, the constructional work must commence within a year or two, and in so far as the programme includes stations which are designed to use turf then the bog development work must begin also within those years.

The programme for the next following five years, as it stands at present, includes the following: there are four hydro-electric stations, at least four new developments based on water power. One is the installation of an additional generating set at Ardnacrusha. The House is aware that an extension of Ardnacrusha was contemplated at the time of its construction, but various considerations in subsequent years made it clear that additional generating capacity could be secured more economically in other directions than by installing a fifth unit at Ardnacrusha. That situation is now changed. In fact, I think it is true to say that, by far, the most economical method of producing electric power at present, and that situation is not likely to change during the years ahead, is by water power. That additional generating set at Ardnacrusha will yield 15,000,000 units. There is a project for developing the Avonmore River in County Wicklow, where two generating sets, producing about 35,000,000 units, will be installed. The board also have prepared plans for the development of the Boyne with an estimated output of about 50,000,000 units. I should, perhaps, say that the board are having second thoughts about the wisdom of proceeding with the Boyne. The inclusion of a station on the Boyne in the programme must not, therefore, be taken as definite. It stands in the programme at present, but the board have intimated to me that there are reasons why they would like to think over the matter again before finally deciding on it.

There is the development of the Clady river in Donegal from which 12,500,000 units are assumed. The other stations in the programme are all steam stations designed to burn turf. I mentioned that the Ferbane station would be in operation in 1956 with two generating sets, but it is contemplated that later, as other bogs in the locality are developed for the production of more turf, two additional sets will be installed at that station, capable of producing between them 160,000,000 units per year. Similarly, it is proposed to extend the present station at Portarlington by the installation of two additional generating sets capable of producing 45,000,000 units per year.

Mr. Dillon

Would the Minister think it convenient to dwell for a moment on the problem of supplying turf to the two extra units at Portarlington, in view of the great difficulty in supplying the requirements of the existing units?

Mr. Lemass

That is not quite an accurate picture of the present position. The board has not failed to delivery to the Portarlington station the quantity of turf contemplated when the station was being built. What has happened is that the capacity of the Portarlington station has proved to be substantially greater than the original estimate, so that a greater quantity of turf is required to get the maximum output, and that created a temporary problem, accentuated last year by reason of the fact that there was a strike of the board's workers at a critical period of the turf-producing season; but the Deputy may take it that all the plans for additional turf-burning stations have been prepared in full agreement with Bord na Móna and they have committed themselves to completing their development in each area in time to ensure the delivery to the Electricity Supply Board of the full quantity of turf necessary to achieve these outputs I am quoting.

Mr. Dillon

I do not wish to ask the Minister a "smart-Alec" question, but he says that the capacity of the station to consume turf was under-estimated. Does that mean that it took more turf to generate the electricity or that the station was found to be capable of producing more electricity?

Mr. Lemass

The station itself was more efficient than was originally estimated. A greater output of electricity is being achieved there than was originally allowed for.

Mr. Cogan

What is the estimated capacity of the Avonmore river scheme?

Mr. Lemass

The estimated capacity of that scheme is 35,000,000 units. I cannot at present give the Deputy much more detail concerning that project. The engineering aspects of it are being worked out by the board and some changes in the rough idea upon which the board is now working may be necessitated by engineering problems that will emerge.

Reviewing the programme involving turf-burning stations, I mentioned two additional sets at Ferbane and Portarlington. It is contemplated also that there will be a further development at Bangor-Erris. The first stage of development of Bangor-Erris involves the installation there of the two sets I have mentioned as coming into operation in 1956 or 1957, but subsequently a further development of that station is contemplated, involving the installation of two more sets, with a capacity between them of 160,000,000 units per year.

Mr. Cosgrave

What will the first two produce?

Mr. Lemass

The first set 80,000,000 units and the second 80,000,000 units. Each set has the same capacity—two 80,000,000 sets, one in 1956 and one in 1957, and two of the same size in subsequent years.

Mr. Dillon

The Minister's mind is not closed against a proposal for a hydro-electric scheme in that area?

Mr. Lemass

No; I am going to deal with that later. There is another turf-burning station to be established in the area of Edenderry-Daingean in Offaly, in the neighbourhood of what is known as Derrygreenagh bog. That also will have a capacity of 160,000,000 units per year and a further station is included in the programme in Mayo, at a location east of Ballina. near Gowlan in that county, with a capacity of 80,000,000 units per year. When all these stations which, subject to what I have said about the Boyne, have been definitely decided upon, are completed, by 1960 or 1961, the total capacity of the board's stations in an average year will be 2,800,000,000 units, but if the board's estimate of the growth of demand in that period is correct, they will not be enough to meet the full demand and they will have to be supplemented by other stations yet to be decided upon.

Mr. Cosgrave

The estimated amount then is 3,000,000,000 units?

Mr. Lemass

Yes, or thereabouts. The board have in mind, however, the possibility of developing a number of smaller rivers. A list of some ten or 12 smaller rivers has been shown to me on which the board think it is possible to establish hydro-power stations of varying capacities. They explained that their difficulty in proceeding with these stations was the burden upon their own planning staff by reason of the heavy programme I have outlined and I have suggested to them that they should consider the possibility of entrusting the development of these ten or 12 smaller rivers to commercial firms —entrusting them in full, from the planning stage to the actual placing of the construction contracts. They have told me that they consider that course to be practicable and are giving it further examination now. If that proves to be so, the construction of these ten or 12 smaller hydro-power stations upon the selected rivers will be proceeding simultaneously with the development of the board's own programme.

One cannot be definite that in any particular case power development will be practicable. The board have done little more than carry out a general survey which suggests that the development of these rivers for power purposes can be undertaken, but of course, when the actual planning of works to ensure the best and most efficient utilisation of the power of the rivers is started, certain difficulties may emerge and on that account I think it perhaps desirable that I should not name the rivers which the board are considering, because it might arouse expectations in districts which may have to be dashed, if, when they come down to deal with the actual engineering problems involved, they find no solution of them.

The board, however, are very keen to develop water-power capacity. It is, as I have said, by far the cheapest method of adding to their generating capacity and it is reasonable to expect that a large number, if not all, of the rivers which they are considering will, in fact, be so developed. These power stations will be comparatively small in size, in relation to the Shannon or Erne. They will not have a very high capacity, but if the full programme which the board considers practicable is completed, they will, between them, add capacity to the board's system equivalent to about 200,000,000 units per year.

There is one further development I think I should mention, although it is not strictly relevant to this matter of the board's generating programme. I have asked the Electricity Supply Board to consider the practicability, from their point of view, of establishing in certain western areas auxiliary generating stations designed to use hand-won turf or turf produced by semi-automatic machines. My hesitancy in mentioning it is this, that the idea of constructing these stations is not so much to add to the generating capacity of the board as to provide a stand-by use for turf in these areas. One of the problems affecting hand-won turf production is that the market for it fluctuates with coal supplies and the price of coal, and I think it would be a good thing if it proved feasible to establish in these areas stations of that kind which could be shut down completely without prejudice to the supply of electricity in a year in which the turf would be needed for domestic or industrial use but which could be brought into operation and kept in operation in a year when there was a surplus of turf in the locality. I do not think there is any technical problem in constructing these stations. From the board's point of view, the difficulty will be largely financial. I have asked them to examine it in every aspect, however, and let me have their views and particularly the extent to which they might be required to be relieved of uneconomic charges arising from the construction of these stations.

I hope to have the recommendations of the board in that connection in the early future and I will deal with the matter again on a Bill which will be before the Dáil in a couple of months, for the provision of additional capital for Bord na Móna. I think it would be more appropriate to deal with it on that Bill, because the idea is more directly related to problems of turf production than of electricity generation.

That is the whole of the generating programme as it has at present emerged. If completed in full within that period, it would be just enough to meet the anticipated demand ten years hence but, as Deputies will have observed, it contains no provision for reserve plant of any kind. We will, I think, have to discuss with the Electricity Supply Board, before the end of this year or early next year, what additions to that programme may have to be made in order to give a greater margin between the productive capacity and the demands at that time. It is, of course, difficult now to make firm plans for a period ten years hence. Whether it will be possible to install an atomic pile and produce electricity in that way at the end of that period is anybody's guess; but there are developments of a technical character proceeding in this industry, as in all industries, which may affect the whole future of the board's programme. So far as it is possible to plan ahead now, upon the basis of present knowledge and expectations, it is clear that at some stage during the second five-year period arrangements will have to be made for the installation of additional capacity over and above the stations to which I have already referred.

The position regarding rural electrification also arises under this Bill. The Bill proposes to increase the advances that may be made to the board for the rural electrification scheme from the present limit of £5,000,000 to a new limit of £8,000,000. That additional £3,000,000 it is anticipated will cover the board's requirements under that scheme for a period of two years. The rate of erection of the rural network is accelerating. The number of poles erected and the number of miles of lines strung and the number of consumers connected in 1951 was the highest yet achieved, but I think the House should be informed that the board is encountering some difficulties in proceeding with that scheme as rapidly as was originally intended. The difficulties which they mentioned to me relate to the supply of materials and equipment and the shortage of technical staff. The scheme is only 20 per cent. completed to date. I will admit that when I introduced the legislation here in 1946 which gave the necessary legal authority and provided the finances for that scheme and told the Dáil that I intended to instruct the board so to plan their activities as to permit of the completion of the scheme within ten years from the commencing of it—that is, from the time when the war-time scarcities would have ended and supplies of materials become available—I realised I was putting upon the board a very difficult task. In fact, I emphasised the difficult character of the task by reference to the rate of construction achieved by the contractors for the Shannon scheme and intimated that if the board was to complete the rural electrification scheme in the time I laid down, they would have to do very much better than the highly competent contractors who handled the Shannon scheme construction had been able to accomplish.

It is quite obvious now that the rural electrification scheme will not be finished in the ten year period, reckoning that ten years as starting in 1948, when work was initiated and supplies became generally available. Only about 20 per cent. has been completed to date, that is to say, of the 800 rural areas to which the scheme will extend the number completed at the end of 1951 was 151. I have stressed to the board the general desire of the House—as evidenced by the number of parliamentary questions, themselves indicative of the pressure upon Deputies—that progress should be as rapid as possible and the board tell me that they are doing everything they can to expedite developments.

Deputies may desire to query the present arrangement of the board for the selection of areas for development. I have told the board that it is desirable that the basis on which the selection is made should be clearly known and unalterable so that no impression would be created that an area might be taken out of its turn because of any local pressure or other improper cause. I had myself some doubts as to the wisdom of proceeding upon the present basis, that is, a calculation of the fixed charge revenue in relation to capital cost of linking up the area and I wondered whether it would not be preferable to proceed instead upon the basis of the actual percentage of residents in each area prepared to accept supply. The board have convinced me, however, that it might be undesirable to change from the present system to the one I have indicated. The advantage of the alternative scheme which I indicated was that it offered a simpler basis on which local committees could approach residents in their areas to induce them to accept supply, a basis that they would understand without difficulty, whereas the present system involves calculations as to the outcome of which local committees are very largely dependent on the information supplied by the board. However, the board are looking into that situation generally.

One of the considerations which I had in mind in suggesting a change was the desirability of not delaying the poorer areas of the country in receiving the benefit of the rural electrification scheme by reason of the present method of making a selection. The board, I think, consider that if there is to be a change, it should be rather by taking the undeveloped areas, the congested areas, separately and having a separate calculation in relation to them, but they are considering the whole position and have promised to let me have their views.

It is now obvious, of course, that the estimated cost of the rural electrification scheme will be very much exceeded. The estimate was made in 1943 and, as I explained to the Dáil when the Act was before the House as a Bill, we had no basis upon which to calculate cost except pre-war prices and we recognised that these prices were not likely to be restored after the war.

The provision in the original scheme under which the board is recouped as to 50 per cent. of the capital cost by a State grant was always subject to review in the light of experience gained. It is now obvious that the original estimate of cost must be increased by about 75 per cent. and, on the basis of present prices, the total cost of the rural electrification scheme will be about £24,500,000. The scheme under which the State is committed to make available to the board grants equivalent to 50 per cent. of the capital cost has not been changed. It is not proposed to change it in this Bill. It is obvious, as I said, however, that a 50 per cent. capital grant is insufficient to enable the board to sell current on the present terms and that, without higher fixed charges, a subsidy of more than 50 per cent. of the capital cost would be needed. In fact, it is quite clear that a subsidy equivalent to 100 per cent. of the capital cost would be necessary to avoid putting any charge on the board's revenue from general sales. The situation is not urgent, however, and the position will be reviewed later in the year. The board is proceeding with the rural electrification scheme and is carrying upon its general revenue the additional charge resulting from the inadequacy of the present State capital grant.

Mr. Hickey

Are we to understand that 50 per cent. of what is given to the Electricity Supply Board as capital expenditure is also added by the State?

Mr. Lemass

No. Of the total capital expenditure on the scheme by the Electricity Supply Board, the State recoups 50 per cent. by way of grant. What I have been explaining is that a 50 per cent. grant is not sufficient to enable the board to carry through the scheme on its original basis and that if there is not to be an increase in the fixed charges, which is not contemplated, then either the proportion of the capital cost met by State grant will have to be increased, increased perhaps up to 100 per cent. or, alternatively, some part of the cost of the scheme will have to be carried on the board's general revenue.

Mr. Dillon

That is not accepted, is it? It is a matter of controversy between the board and the Department of Finance.

Mr. Lemass

It is a position which I will review later in the year and I would not like to commit myself to a definite viewpoint until the review has taken place.

Mr. Dillon

It has been energetically contested when that submission was first made by the board.

Mr. Lemass

If I were to follow the Deputy along that line it would lead me into certain irrelevancies.

Mr. Hickey

Is the Minister in a position to state the amount that has already been advanced to the Electricity Supply Board for electrification?

Mr. Lemass

Oh, yes. The board has already received practically the whole of the £5,000,000 sanctioned by existing law and, in order to meet the position for the next two years, we are proposing to legislate for the advance of another £3,000,000.

Mr. Hickey

I know, but could the Minister say right off how many millions have been advanced to the Electricity Supply Board since it was first started?

Mr. Lemass

For all purposes?

Mr. Hickey

Yes.

Mr. Lemass

Certainly. I do not want to confuse the Deputy. The total which the Exchequer is authorised up to now to advance to the Electricity Supply Board is £36,945,000. The board's actual capital expenditure and commitments to date are roughly £50,000,000 but it has actually received in cash from the Exchequer only £26,000,000. In other words, the advances to date do not reach the existing statutory limit but they will do so in the very near future. It is necessary to get the legal sanction for raising the advances because the board's commitments already take it beyond the limits.

Mr. Hickey

What is the amount that the board have received from the State since 1927, since it was started, up to date?

Mr. Lemass

In actual cash, to date, £26,000,000 but, as I want to make clear, the actual expenditure by the board has been substantially above that because there has been a re-investment to date of £9,500,000 from its own reserves and, of course, there have also been commitments entered into of a substantial character to the financing of which the State is committed.

Mr. Hickey

The Minister said there was a total of £36,945,000.

Mr. Lemass

£36,945,00 is the amount authorised by existing law to be advanced to the board of which £26,000,000 has actually been advanced.

The other provisions of this Bill deal with matters relating to the retirement of, and the pensions payable to, certain of the board's employees. First of all, there is a proposal to give an increase in pension to the pensioners of the board who retired before the relevant dates set out in the Bill, that is to say, September 23rd, 1946, for manual workers and April 1st, 1946, for the general staff, who were not, for some reason, covered by the general Act passed in 1950 relating to increases in pensions.

Section 16 of that Act, which applied to the board's employees, provided only for pensioners whose pensions were on a cost-of-living basis and made no provision for those pensioners whose pensions were on a fixed basis. The House will appreciate that the present position of the board is such that there is not a uniform system for all their staff. They have obligations of varying character to former employees of local authorities who were taken over by the board and are now in its service. Some of these former employees of local authorities had a right to pension on a cost-of-living basis and they got an increase in these pensions by the 1950 Act. Some had a right only to fixed pensions and they did not get an increase under that Act. It is proposed now by this measure to give those pensioners of the board who retired before these dates increases in pensions in accordance with the provisions of the 1950 Act. At least, the increases which they may get will be either the increases authorised by the 1950 Act or the pensions which would be attributable to the actual salaries of which they were in receipt when they retired subject to the revision of those salaries made in 1946. It will be whichever is the lesser of these two increases.

The increases are made retrospective to April 1st, 1949, or to the date of the commencement of the pension. Some of the pensioners affected by the Bill will have retired subsequent to the relevant dates but the practice of the board in regard to its general staff is to relate the retirement pension to the average earnings in the previous five years. A person who is retired subsequent to the relevant dates and whose five-year period for the purposes of the calculation extended behind them would also benefit under this measure. Any disputes that may arise between individual pensioners and the board will be settled by the tribunals which have been established under previous Acts. The 1950 Act, whether through oversight, drafting error or design I am not quite clear, had the effect of authorising the payment of the revised pensions to Electricity Supply Board pensioners only from the date on which that Act passed. In the case of other classes to whom the Act referred the revised pensions were payable retrospectively to the 1st April, 1949. It is proposed to make the revised pensions of those Electricity Supply Board pensioners who come under the 1950 Act also retrospective to the 1st April, 1949.

There is another provision in that regard to which perhaps I should refer. Persons who were transferred from the service of a local authority to the board had the right to continue in the service of the board or, if that service was terminated, to appeal to the Minister for Local Government for reinstatement in their employment. At the time that most of these transfers took place, there was no statutory limit, in respect of age, to employment with a local authority but by the Local Authority Act of 1941 authority was given to the Minister for Local Government to make an Order, which he made subsequently, fixing retirement ages for local authority employees. These former employees of local authorities, however, who transferred to the Electricity Supply Board were not affected by the legislation and they are still in the position that if they are retired from the service of the board at 65, they can appeal to the Minister for Local Government for reinstatement. It is proposed by this Bill to apply the provisions of the 1941 Act to these former local government employees and to give the board power to fix retiring ages. The board intends to fix the same retiring ages as have been fixed for local authority employees—65 years for men and 60 years for women.

There was another provision in that regard which I might also mention. Superannuation schemes prepared by the board under the authority of the Act of 1942 comtemplate a normal retiring age of 65 and, in fact, the actuarial basis of the scheme was calculated on that assumption. It has been ascertained, however, that that provision in the pension scheme is in conflict with the provisions of the Act of 1942. This Bill is designed to remedy that defect by determining the normal retiring age as the age specified in the scheme. If an employee of the board is kept in the service after the age of 65, then that subsequent service will not count for the purpose of calculating his pension. These provisions relating to pensions, retiring ages and superannuation schemes might be more conveniently discussed in Committee but I think it desirable at this stage to give a general indication of the provisions.

Mr. MacCarthy

The Minister stated that the Lee Scheme may not be in production until 1957. Could the Minister at this stage give any indication as to when the construction work on that scheme may be started as some farmers, even though they have got some preliminary notice, have expressed anxiety as to the tillage position?

Mr. Lemass

I shall try to get some definite information for the Deputy, perhaps before the debate concludes. So far as I know the work will start this year. I understand the position is that some farmers are not quite certain whether they should set their land in tillage because of the uncertainty as to whether the land will be taken over before the end of the year. That matter has been brought to the attention of the board and I think they understand the desirability of making the position known in the area as early as possible.

Mr. Cosgrave

I should like to say that I welcome this Bill, particularly in view of a number of statements from the Minister for Finance and some other Ministers in recent months in regard to our economic position. It is good to see that no decision which has been taken will affect the programme of development which the Electricity Supply Board has in hand and that whatever cuts are likely have not been allowed to fall in respect to this very desirable capital expenditure—I might say essential capital expenditure. The Minister gave fairly exhaustive particulars of the proposed rate of development and indicated, so far as the information available to him at this stage could be given as definite, the particular stations which it is hoped to bring into operation in the next five years and the estimated output of each station, on the assumption that supplies of essential raw materials will be available. He mentioned also the estimated demand in five years and in ten years. I got some figures in the House last July and so far as I can gather the estimates which the Minister has given now correspond fairly accurately. There may have been some revision since in respect to individual stations or some change in respect of the estimated demands but any such change is negligible. The proposals which the Minister announced cover hydro schemes and steam stations. In connection with the hydro schemes there is not much to be said except that I should like to impress on the Minister and on the Electricity Supply Board the necessity for proceeding with the smaller schemes.

I note from what the Minister has said that a number of these contemplated smaller schemes that have been surveyed by the board may be handed over for development to private enterprise and that the board will, in time, acquire them. There are objections to that course just as there are objections to the immediate acquisition of these schemes or to their development by their owners at the moment. I think the board should consider agreeing now to the terms of acquisition and facilitating or encouraging the proprietors who have these small schemes at the moment to proceed with whatever work is essential or whatever development may be considered essential rather than wait until the scheme will be acquired in the ordinary way. I think it is better in these cases not to mention the names of individual hydro schemes, but there are small schemes in certain parts of the country which have worked satisfactorily enough up to the present and which, if they are to be operated economically in the future, require some capital expenditure and certain equipment. If these schemes are developed now by the owners it will involve them in greater expense than their resources allow, whether the owners be private individuals or, in some cases, local authorities. On the other hand, if the Electricity Supply Board encourages them to re-equip the sets or to develop them in any way, that, in turn, will result in the acquisition terms being higher when the board come to acquire them. I think it is time that some agreement was reached on the terms of acquisition and that the owners should be helped now either by direct assistance from the Electricity Supply Board or by technical advice, or whatever other way appears feasible.

The Minister said that it is proposed to entrust to private concerns the development of some smaller rivers that are contemplated but have not yet come within the immediate anticipated programme of the board. They are comparable to the few small schemes I have in mind that could be developed either by private enterprise, with a view to ultimate acquisition by the board, or by the present proprietors, in such a way as to be absorbed into the board's general network in the future.

The two really important questions for discussion under this Bill are the proposed additional turf-fired generating stations—or certainly the decision to use milled peat—and the rural electrification scheme. As I understand it, the decision to develop the Ferbane station for milled peat was taken, on the basis of the reply which was given in this House to-day, as a result of some technical information available under the E.C.A. technical assistance programme. Unless there is now some additional information that was not available six or eight months ago, I have grave doubts about the wisdom of the production of electricity from milled peat. This is a highly technical question and not one on which laymen can express an opinion. We have experience of the production of electricity from sod turf. We know what can be accomplished. The Electricity Supply Board and Bord na Móna have experience of the working of the two turf-fired stations at Portarlington and Allenwood. The report which the Minister has mentioned has not yet been published but from information which was available it appeared that milled peat was not an economic proposition on the trials that had been carried out.

It should be established beyond all doubt that the production of electricity from milled peat is satisfactory before any large-scale capital development is undertaken in that connection. The Boora bog was developed on the basis of sod turf. I think it is accepted that if the weather is bad it is possible to win turf for milled peat easier than it is to win turf for a sod-fired station but I do not think there is any information available to show that it is possible to win sufficient turf or to win it economically. I should like to have some information on the results of the experiment which the Electricity Supply Board conducted with the pilot plant. Under the 1927 Act, the Electricity Supply Board have a general power of experiment. I do not think that that power authorises them to experiment with a variety of methods for the production of electricity but they are given a general power of experiment and a pilot plant was in course of erection for the testing of milled peat as a fuel for the production of electricity. I understand that, since then, the Technical Assistance Mission has reported. I do not know why that report is not made generally available. I understand that they have produced an attractive brochure but whether that brochure has behind it results which will stand the tests of economic efficiency—and there is placed on the board the obligation under the parent Act to produce electricity on an economic basis—I do not know. Therefore, I believe it is vitally important that we should satisfy ourselves beyond all doubt that the proposal to use milled peat as against sod turf will prove to be economic.

I think there is general acceptance of the desirability of utilising to the maximum extent native resources. It is difficult to follow a number of figures given in reply to a question but, on the results which have already been proved by Bord na Móna, it would be wrong to assume that there will be the saving which is anticipated in the reply which the Minister gave in this House to-day. It is a fact that Bord na Móna have produced just about sufficient fuel to meet the demand of the existing stations. A variety of difficulties prevented the realisation of earlier estimates but if the scheme which it is now anticipated will be operated in Boora is brought into production, the shortage which occurred in connection with sod turf may manifest itself again. Before embarking on the production of electricity from milled peat the House should be satisfied—on the tests which the Electricity Supply Board are making or have made and on the basis of the report which the technicians of the Electricity Supply Board are capable of giving—that it will prove an economic proposition.

On the general question of turf-fired stations, it is obvious from the figures which the Minister has given on the estimates of the Electricity Supply Board that, allowing for the maximum development of hydro-electric schemes and the development of the turf-fired schemes it is essential as a stand-by that some steam stations based on imported fuel should be maintained. It may be that if fuel prices rise again in any future emergency the output from these stations will either be greatly reduced or will cease altogether, but if that situation arises it will have to be dealt with then. A number of people, I think, are not familiar with the economics of electricity development which involves the use of steam-fired stations as a stand-by. These stations can be eased off when there is a heavy flow in the hydro schemes and, conversely, when the hydro schemes are operating on a light basis in dry weather, steam-fired stations can be brought into production. That of course applies to any steam-fired station, whether a coal, a turf or an oil station. On the question of the development of hydro-electric schemes, it should be borne in mind that every water-produced unit of electricity is a saving to the oil or turf-produced units. Consequently, it is of the utmost importance to realise the necessity not only for developing the major schemes or stations mentioned but proceeding with the rapid development of the smaller sets and stations which the Minister referred to and which have been the subject of examination by the board over a lengthy period.

On the question of rural electrification, there is one aspect of that development which I think has not received sufficient attention, and that is that on the present basis of selection of areas small pockets of areas are excluded from supply and may be excluded for a great number of years. Deputies are familiar with districts in the country selected for development and which have received a supply or will receive it in the near future. In some cases two or three or four areas have received the supply, but in between or on the edge of these areas there are small pockets of people insufficient to qualify under the existing fixed charge revenue and unable to provide the capital cost necessary to bring the supply to these districts or people as the case may be. I believe that if, say, 50 people are prepared to take a supply in an area adjoining an existing developed area—in fact this applies in some cases in parts of urban districts to the general network of the board and not merely to the rural electrification scheme—the local authority should, by a county-at-large charge, or by means of raising a loan on the basis of a county-at-large charge, contribute the difference between the cost which the board will have to meet and the sum which these people are in a position to pay. That is only one suggestion. I do not know whether that suggestion would appeal to the local authorities, but I believe that there is a case to be made for the less convenient areas in counties or the less fortunate districts which are precluded from having a supply provided under the existing fixed charge system.

There is then the general question of the undeveloped areas. The matter which I have referred to will become particularly difficult, say, in parts of Connemara, Donegal, Kerry and Mayo, and even in parts of other counties. But the congested areas or the undeveloped areas are more difficult to supply on the basis of the present fixed ratio of 25 square miles. I think the area for some of these smaller numbers of people should be reduced to, say, five square miles.

Mr. Dillon

Did not the Electricity Supply Board at your direction formulate a comprehensive scheme for the electrification of the whole coastal area from Donegal through Erris and Galway to Kerry?

Mr. Cosgrave

Yes, but no matter how the scheme is operated there is the difficulty in supplying isolated areas or a limited number of people. I think that is a matter which has not received sufficient attention up to the present. The whole attention of the State has been devoted from time to time to providing by different schemes some system of economic assistance for these areas. Here is an essential scheme which the board have planned and have, I believe, taken steps in certain areas to extend to remote groups of people or persons anxious to get a supply if the difference between the present fixed charge and what they can pay could be met by a contribution from the local authority or, in the case of some of these undeveloped areas, possibly a contribution under the Undeveloped Areas Bill. Certainly the present approach to this matter is not sufficient to meet the higher cost involved and some departure from the present rural electrification system will have to be made if a supply is to be brought to these areas. The Minister could mention some difficulties in that regard, but I think a much more imaginative approach will have to be made if a supply is to be brought to such areas, and that applies in particular to the whole western seaboard.

There are a number of other matters which may more appropriately arise on the Committee Stage, but I think some of them should be referred to. One is the question of pensions which the Minister referred to. As I understand it, the proposed increases in subsection (1) only apply to employees who were in the service of local authorities; that persons in the service of the board who were not prior to their service with the board, in the service of local authorities will receive no increase. I believe that the whole question of the persons in the service of the board should be reconsidered on the basis of having a uniform system for all employees. As the scheme is at present operated, there are a number of omissions from it. One is, that this amendment, which really refers to the 1950 Pensions Increase Act, does not include those persons who were not in the service of local authorities, but it applies to local authority employees acquired by the Electricity Supply Board who, notionally, had what is known as a free pension. Some of the board's employees have already retired with ten or 15 years' service and have pensions as low as £1 a week. In fact, I believe it is true to say that the pensions of some are below that. I consider that these persons should be given added years in the same way as, in some cases, added years are given to civil servants who retire without reaching the maximum period of service.

In addition, the 1942 Superannuation Act excluded from the maximum pension a number of persons who were under 40 years of age. Those who are 40 years or over got, in some way or other, credit in the way of added years, so that they could get a maximum pension but a number of employees who had been with the board from the beginning, and were under 40 years of age, will never get the maximum pension even if they served to the age of 65. They will never get the maximum pension to which a person with the full number of years' service is entitled. I think that matter should be reconsidered. If the intention is to provide pensions for services rendered, then the cases of those individuals who, because of their age at the inception of the Electricity Supply Board did not qualify for full pension, should be considered. The board should be given power to give added years in their case so as to make up whatever difference there is.

There is another matter in connection with the general term of office of the board itself which, I think, is worthy of consideration. As the Act stands at the moment, the members of the board have a five year maximum. On a number of occasions, the board was not appointed for a full five years. The present warrants, I believe, do give the members a five year term.

I think it is undesirable that the members of the board should be in the position that they are appointed either from year to year or for an indefinite period. I think it is time to consider whether there should not be a minimum period of, say, three years, and a maximum of five or seven years, inserted in the Act. For a variety of reasons, it is unsatisfactory from the standpoint of the board, of the individuals concerned, of the public and, very often, of the Minister, to have persons on State boards appointed for an indefinite period. If they are on a yearly basis, it certainly leads, or might lead, to all sorts of difficulty, and is not, I think, in the interests either of the particular service concerned or of the State board. There is then the other, and the wider question which the Electricity Supply Act of 1927 has set as a precedent and which has been followed by a similar section in a number of other Acts— that is, the exclusion of persons serving with the Electricity Supply Board from being nominated for, or elected to the Dáil.

Mr. Dillon

Hear, hear!

Mr. Cosgrave

It may be that that actual provision did not exclude any person. However, I am not as familiar with that as perhaps some other Deputies. I certainly think, however, that the time has arrived when the matter should be considered on a different basis from that which was accepted at the time the Electricity Supply Board was set up. Since then, there has been a great increase in the number of statutory bodies established. I think it is desirable that, if a person who is employed in any of these undertakings is elected to either House of the Oireachtas, the question of his resignation or of his being seconded should be considered but while I say that I feel that the employees of State boards should not be in any different position from that of employees of local authorities or teachers. It may be that the employees of local authorities and teachers are entitled to certain benefits or facilities at the moment which they should not get, or which should be revised, but certainly there ought not to be one rule for the employees of local authorities and national teachers and another for persons in the employment of State boards. I think it would lead to undesirable results if people employed by these statutory undertakings were to remain in such employment after they had become a member of either House of the Oireachtas.

Mr. Dillon

Hear, hear!

Mr. Cosgrave

That, I think, would inevitably cause difficulties not only for the individuals concerned but for the Minister responsible for the statutory board as well as for other employees or for the board of the undertaking concerned. While I say that, I think a person should have the right under the law to be nominated for election to either House, but that, if elected, he should automatically cease to be an employee of the board. In fact, I think that some of the sections in other Acts are so phrased. Therefore, in connection with the Electricity Supply Board, I think the time has arrived when the matter might be reconsidered.

Mr. J. Brennan

In common with the last speaker I, too, welcome this Bill, and particularly the statement by the Minister which envisages a vast programme of development for the next ten years.

Mr. Dillon

Hear, hear!

Mr. J. Brennan

I am glad, too, that as regards the various projects which the Minister has outlined or earmarked none of them will have to depend on imported fuel for generating purposes.

Mr. Dillon

That is not quite accurate.

Mr. J. Brennan

So far as I understood what the Minister said, the plants which he envisages in the future, in addition to those already decided upon, will be either hydro-electric or turf fired. I think it is a pity that we should have in the course of construction at the moment three plants which will have to depend on imported fuel for generating purposes. Even though there may be difficulties in the way in so far as turf fired plants are concerned—they may not be 100 per cent. economical in some respects—we must bear in mind the fact that they will provide employment for our people on the bogs. That consideration alone will outweigh any other disadvantages there may be in comparison with imported fuel plants.

I was glad to hear that a river in Donegal, the Clady, was included amongst those to be developed under the programme outlined to us by the Minister. We were hopeful that the Clady river might have been undertaken before now, instead of one of these coal or oil burning stations.

There are a few aspects relating to rural electrification on which I agree with the previous speaker. It is only those who are familiar with the circumstances who will understand the position as he put it. Under the present system of calculating the economy of an area, there are various pockets left out of the network in the area being developed by the Electricity Supply Board. When we contact the Electricity Supply Board—I am sure most Deputies have had this experience—and ask when they intend to extend the network to a particular townland or area, we are told that the economy calculated would not justify undertaking the work. The Minister made some reference to this in his statement and mentioned that he had encouraged the Electricity Supply Board, particularly in the undeveloped areas, to go ahead with development work, irrespective of whether the calculated economy would show it to be justified or not. I understood that from his statement and I want to impress on him very strongly that he should urge that line of policy on the board, so far as it is possible for him to do so. It is unfortunate that, on the fringe of a very fine network, there should be many townlands—in some cases the lines actually pass through them—which have not got the great amenity of electricity which neighbouring townlands enjoy and which have no hope of getting it for perhaps years to come under the present system of calculating the economy.

Mr. Hickey

Because it is not an economic proposition.

Mr. Brennan

Yes. The Electricity Supply Board are inclined to look on it from the point of view of cold figures of economy, and if we can succeed in getting them to change their attitude so far as undeveloped areas are concerned, we will have achieved something worth while.

I want particularly to impress on the Minister the need for doing something with regard to an extension of current to the Gaeltacht. The Gaeltacht is up against exactly the same difficulties as the other areas mentioned. In some cases, a Gaeltacht area comprises a number of small cottages and the present system of calculating the return from a particular area is based on the floor space of the dwellings concerned. On that basis, many of our Gaeltacht areas would not be regarded as an economic proposition and we in Donegal are faced with quite a few such areas, and I should like the Minister to devote his personal attention to them and to urge the board to undertake development work there, irrespective of whether it would be economic or not. The Post Office is a Department in which the uneconomic area is thrown in with the economic area, and, one with the other, the Department is made to run on fairly economic lines.

Mr. Lemass

The Deputy appreciates that every area will be done eventually. The only question at issue now is the order of priority, but the whole 800 areas will all be done eventually.

Mr. J. Brennan

I appreciate that it is intended to have them all done eventually, but time is a great factor and many of these people—even those who are young to-day—may not, under the present system, hope to see it, if something is not done to expedite development.

Mr. Dillon

Remember the Deputy's economy policy.

Mr. J. Brennan

I am talking about the board's economy policy and I gather from the Minister's statement to-day that no effort will be spared to ensure that full scale development in relation to an extension of Electricity Supply Board current will be proceeded with in the next ten years. I am prepared to accept that statement as definite and I am very much encouraged by it.

The Minister made a reference to hand-won turf-burning stations. That is a scheme which would be very welcome in the undeveloped areas and the turf areas. He said that the programme envisaged made no provision for stand-by plant, but in order to bring forward the development of hand-won turf-burning stations I suggest that these stations could be used as stand-by stations and utilised for the purpose he mentioned, of providing an outlet for the sale of hand-won turf during seasons when its sale would be uneconomic for the producer. There is a very serious fluctuation in the sale of turf year by year. It is governed by supply and demand and I could easily visualise many seasons—as happened in the past—when the people who devote their efforts to the production of a good deal of hand-won turf would not be amply rewarded and this would be one definite outlet for it and would ensure that there would be a constant consumption of any amount of turf that could be produced. The stations might be used when necessary and closed when necessary, in accordance with the supply of, and demand for, turf.

If that could be expedited, if it could be brought forward some years and undertaken as soon as possible, these stations might be used as the stand-by stations the Minister referred to as not being provided for, as yet, in the programme. Finally, I wish to compliment the Minister on the very fine programme he has outlined, and I ask him to consider at some stage making special provision for the undeveloped and the Gaeltacht areas.

Mr. Hickey

Everybody welcomes this Bill, and if there is any criticism to be made in regard to it, it arises from the slow development of rural electrification. One thing I want to say is that I hope that, under this Bill, the board will be answerable to this House. We are here providing the money for rural electrification, but if we ask a question about anything in relation to which we disagree with the policy of the board, we are told that the board is not answerable to the House. What is wrong in connection with the slow rate of development is the fact that finances were not available to the board as it wanted them. I should like to remind the House that, for the 20 years ending March, 1950, the Electricity Supply Board got £22,000,000 for electrification purposes. In that same period there has been paid in interest alone over 50 per cent. of the £22,000,000 advanced and less than £1,000,000 of the capital advanced has been paid back. In other words, we have paid in interest on the moneys advanced to the Electricity Supply Board more than double the capital expenditure in these 20 years.

Mr. Dillon

Hold your horses, Deputy. The figures are getting a bit mixed.

Mr. Hickey

We have advanced £22,000,000 over the 20 years ending March, 1950, and, in the same number of years, a sum of £12,107,000 has been paid in interest on that money and less than £1,000,000 of the £22,000,000 advanced has been paid back. If Deputy Dillon wants to check on those figures, he can do so, and if he can prove me wrong, I shall be glad to be corrected. Is that system to continue? The Minister said that he proposes to deal with the financial aspect in another Bill. I suggest that we are developing the resources of this country and that we are shackled to the money system.

Mr. Lemass

It is very hard to get on without it.

Mr. Hickey

I agree with the Deputy on the opposite side who talked about people being denied the use of electricity, although the lines pass their houses. I know some of the pockets he has referred to and when we make inquiries with regard to them, we are told that it would not be an economic proposition to extend current to these areas, even to serve 20 or 30 farmers whose houses are not very far from one another.

Debate adjourned.