Dáil Éireann debate -
Tuesday, 13 Jul 1971

Vol. 255 No. 7

Electricity (Supply) (Amendment) Bill, 1971: Second Stage.

Minister for Transport and Power (Mr. B. Lenihan)

I move: "That the Bill be now read a Second Time."

The purposes of this Bill are to provide statutory authority for the payment of £10 million Government subsidy to the Electricity Supply Board in respect of a programme of expenditure of £18 million on rural electrification during the four years ending 31st March, 1975, and to increase the limit of authorised capital expenditure by the board for all purposes, including rural electrification, from the existing combined limit of £340 million to a new figure of £450 million.

As Deputies are aware, rural electrification has been in progress now since 1946, a period of 25 years, and the time has come for an all-out effort to complete the programme. A brief review of the situation is, therefore, not out of place.

The original programme for rural electrification was on the assumption that, given a subsidy of 50 per cent of the capital cost, supply could be offered at standard rates to about 86 per cent of rural homes and that about 70 per cent of the total rural households would accept supply on these terms. Among the 14 per cent to whom standard rates could not be quoted, because of the high cost of connection, there were many who wished to have supply and the ESB programme provided for connections to them if the persons concerned were prepared to pay an extra charge, over and above the standard charge sufficient to bring the return up to the minimum acceptable as sufficient, at the time, after taking account of subsidy. This was, in fact, the origin of the special service charges. The distribution networks for the scheme were designed with a view to connecting the maximum possible number of consumers with the money available and expenditure on distribution capacity unlikely to be used for many years ahead was avoided.

By the time the original rural electrification scheme was nearing completion in 1962 about 75 per cent of total rural households had already been connected compared with the original target of about 70 per cent. The Government at that time decided that a second comprehensive scheme, known as the post-development programme, should be carried out to give a further opportunity to obtain supply to all those houses which, for one reason or another, were still without electricity. Since most of the households qualifying for standard charges had by then been connected, the post-development programme required relatively greater capital expenditure to connect houses to the system. Consequently, under the Electricity Supply Amendment Act, 1962, the rate of subsidy was increased from 50 per cent to 75 per cent with a limit of £75 per house for domestic connections. This financial limitation had the effect of increasing substantially the level of special service charges for the very high cost connections while qualifying a greater number for standard charges. To cater for such households, a scheme for the payment of grants of up to £10 for the installation of bottled gas as a more economical alternative source of power for lighting, cooking and heating was introduced.

The rural electrification programme was reviewed prior to the introduction of the Electricity Supply Amendment Act, 1968. This Act extended the limit of capital expenditure on rural electrification to £50 million which then was considered sufficient to complete the post-development scheme by 31st March, 1973. At the same time as the Act was enacted, arrangements were made to effect substantial reductions in the higher special service charges to be effective from 1st June, 1968, the cost being borne by the ESB. In addition, the maximum grant for bottled gas installations was increased from £10 to £35.

At the time of the commencement of the original rural electrification scheme in 1946, only about 14,000 rural households had electricity installed. At the 31st March, 1962, when the original rural electrification scheme was virtually completed, a total of almost 280,000 rural houses were connected to the supply. At the end of March, 1967, 325,000 houses had been connected and the estimate then made was that a further 26,000 connections only would be required to complete the scheme, bringing the total estimated number of rural connections to just over 350,000 houses. It was planned to achieve this total by March, 1973.

The 1967 forecast of 350,000 rural connections proved in practice to be an under-estimate. The substantial reduction in special service charges in 1968 made electricity supply a much more attractive proposition for many households and this added up to a considerable increase in demand for connections. Increasing prosperity and a growing demand for TV reception increased the numbers seeking supply. As a consequence, progress on the completion of the programme in the different areas fell well behind schedule, and the backlog was increased by new houses constructed in the meantime and seeking connection. The position was aggravated by the need to allocate an ever growing proportion of the capital provided for rural electrification to system improvement, that is to strengthening the distribution network in order to improve the standard of supply sufficiently to keep up with increased demand. The rate of growth in consumption of electricity in rural areas is now about 13 per cent as compared with an increase rate of about 9 per cent in urban areas. This growth in demand which is continuing at a high rate has necessitated considerable investment in strengthening the distribution system to maintain adequate supply. The development of rural industries and the growth in rural areas of new hotels, registered guesthouses and new homes built by existing consumers as well as new installations for the mechanisation of farms have all added to the problem of completing the scheme of rural electrification within the programme planned from 1968.

The 1967 estimate of the number of further rural connections required to complete the scheme was 26,000. In fact, in the period from April, 1967, to March, 1971, about 34,000 connections had been made under the scheme and as Deputies are very well aware, the rural electrification programme is still far from complete in many areas.

I, therefore, requested the ESB to carry out a further detailed study of the position, district by district, throughout the country so as to be able to forecast as accurately as possible not alone existing requirements for electricity connections, but to take into account also new house building programmes and developments likely to require priority connections for new rural industries, guesthouses, et cetera, as well as farming developments. The ESB have recently completed this review and they have proposed a four-year programme designed to achieve by 31st March, 1975, connection of all outstanding connections at the present time, estimated at 14,000, together with other demands for new connections, estimated to amount to a further 14,000 likely to arise in the four-year period. The cost of these 28,000 new connections is estimated at £7 million. At the same time, the ESB realise the necessity to improve substantially the whole rural electrification network and they will need to spend £11 million on system improvement in this four-year period. The total cost of this programme is, therefore, £18 million from 1st April, 1971, which will bring total expenditure by the board on rural electrification to £67 million.

The Government have accepted this programme and the provisions in the Bill are designed as, what I might term, a crash programme to enable rural electrification to be completed within the next four years. The capital provisions for expenditure by the ESB on rural electrification in each of these four years have already been determined and notified to the board so that there should be no obstacle to the ESB achieving success in completing this scheme as planned. The board are already planning on this basis and I earnestly hope that all parts of the plan can be achieved according to schedule. This should eliminate entirely the unfortunate situation we have had for some years past where the commencement of work in particular areas has had to be deferred time and again because of the heavy work programmes developing in areas getting prior attention.

For comparison purposes I might mention that the total expenditure on rural electrification in the 25 years of its operation up to 31st March last was about £49 million, including Government subsidy of £17 million. We are now proposing expenditure in the next four years totalling £18 million, including subsidy of £10 million. In the past four years annual capital expenditure on rural electrification has ranged from about £2 million in 1968 to £3.1 million in 1970-71. The new programme envisages expenditure of £3.7 million this year, £4.1 million next year, £4.7 million in 1973-74 and no less than £5.5 million in the fourth and final year of the programme.

Our existing level of rural connections to the electricity supply system is very high by international standards, more particularly when account is taken of the very many scattered households in rural Ireland—a position that does not obtain in most other countries where rural households are concentrated in small villages or townships. By the time the new programme is completed, we expect to have total rural connections of about 386,000 houses or something approaching 98 per cent of total rural households. Such an achievement is something that I think we can be proud of.

In the new programme of bringing supply to those households not yet connected it is not intended to make any change in the existing reduced rates of special service charges which will continue to be calculated on the same basis as has obtained since the Government arranged for a reduction in these charges in mid-1968. This reduction was designed to reduce particularly the highest special service charges and electricity is now available to rural dwellers at very reasonable terms. While special service charges are necessary in some form or another in every electricity distribution tariff I can assure the House that those who are asked to pay these special charges are, in fact, paying very much less than the cost of the service they are getting. The availability of grants of up to £35 for the installation of bottled gas equipment for lighting, cooking and heating is an alternative available to those liable to very high special service charges. I might mention that in the past three years, that is, since the new rate of subsidy was introduced over 1,600 bottled gas grants have been given, so far, at a total cost of about £46,000.

I should make it clear that the new programme of rural electrification which we are introducing is not a mere continuation of the scheme which has been proceeding on an area-by-area basis for some years past. This is a scheme to complete the original programme once and for all by provision of the increased finances which I have mentioned. Under the existing planned post-development scheme, something like 520 areas have been completed out of a total of 792 rural areas. It is planned not alone to re-canvass and re-develop the remaining 272 areas, but also to offer electricity again at subsidised rates to all unsupplied households in the 520 or so areas where the post-development scheme has been completed. There will not be an individual canvass in these 520 areas. Supply will be offered by way of local advertisement and it will be a matter for householders in the areas concerned to apply immediately for connection.

As I have said already, the four-year plan which this Bill is intended to finance is aimed at completing the massive task of rural electrification on which we embarked in 1946. It is aimed at bringing electricity to all rural homes which it is possible to connect at any kind of reasonable cost. To keep down costs the ESB propose, as I have explained, to tackle the job area by area. After each area is completed the connection of rural homes for electricity in such area will have to be made on an economic basis without the benefit of subsidy. Rural dwellers, concerned to ensure that they are connected for electricity, should apply immediately for connection whenever the ESB announce the provision of supply in each of the 520 areas in which the rural electrification planned post-development scheme has already been completed.

It is not possible to deal with non-domestic connections such as industrial consumers, registered hotels and guesthouses and farming activities requiring supply on commercial or industrial tariffs on the basis of completing the programme in each separate area. Subsidy will be available, therefore, in respect of such connections up to the end of the four-year programme. After the end of the programme we will have achieved one of the highest levels of rural electrification to be found anywhere in the world and it should then be possible to provide and extend the supply of electricity on the same self-supporting basis as in urban areas and, indeed, the growth of the economy throughout the country which has itself been fostered by the spread of electricity supply should help to put rural electricity supply on a sound financial basis.

Completion of the proposed programme will require an additional £18 million over and above the above £49 million expended by 31st March, 1971. This means a total provision of £67 million as compared with the existing statutory limit on capital expenditure by the ESB on rural electrification of £50 million. It is necessary, therefore, to increase the limit of expenditure by £17 million to £67 million. Because of the acceleration of the programme and the very considerably increased expenditure on system improvements now being provided, a new approach is being made to the amount of subsidy to be made available. Instead of the old arrangement of 75 per cent with a maximum of £75 per house the Government have agreed to make a global £10 million available as subsidy in respect of this programme and the ESB will complete the programme with this amount of subsidy but will maintain the 1968 terms to householders for new connections. Total subsidy payments up to 31st March, 1971, amounted to £17 million so that the total Government provision by way of subsidy towards the cost of the £67 million programme will amount to £27 million in all.

I wish to make one more comment before I leave rural electrification. The ESB now have firm plans to offer electricity in all rural areas over the next four years. It is essential that they plan their programme on an orderly basis in order to keep costs at the lowest level possible as well as achieving the maximum progress on the scheme. Any departure from the planned scheme can only increase costs and delay progress. It is clearly impossible to connect at once all who are seeking supply. Some areas must be at the end of the board's plan. I would ask Deputies, therefore, not to be impatient if some areas in their constituencies are not high up in the board's timetable. The longest any householder should have to wait will be the 31st March, 1975, but the great majority of rural households will have connection long before that date.

I now turn to the provision of capital for general purposes for the ESB. Under existing legislation, the ESB are entitled to incur capital expenditure for all purposes other than the electrification of rural areas up to a limit of £290 million as fixed by the Electricity Supply Amendment Act, 1970. At present, the board have approved expenditure under this head amounting to £240 million and the balance remaining would be sufficient to cover general expenditure likely to arise for approval up to about March, 1973. In order to avoid coming back to the Dáil again within such a short time, it is now proposed to extend the statutory limit to cover expenditure likely to arise for approval in the period to 31st March, 1975, that is for the period covered by the programme for completion of rural electrification now proposed.

During the next four years, the ESB expect to approve of expenditure for purposes other than rural electrification amounting to about £140 million. Of this total about £85 million will be required for additional generating plant. The plant to be commissioned will comprise two 120 megawatt plants at Pigeon House B, another 120 megawatt plant at Great Island, the pumped storage plants totalling 280 megawatts at Turlough Hill, the 40 megawatt extension to Shannonbridge milled peat plant and then the erection of the first 250 megawatt units to be installed in our system. Two of these will be at Tarbert and the third at Pigeon House B. A small 25 megawatt extension to the Erne Station is also planned. This plant programme will be necessary to meet increased demand for electricity which has been growing for some years past at between 10 per cent and 11 per cent. Deputies will note that no provision is made in this programme for the construction of a nuclear generating station. As I explained recently in this House, on the Second Reading of the Nuclear Energy (An Bord Fuinnimh Núicléigh) Bill, 1971, no final decision has yet been taken to build a nuclear station. The ESB have for some time past been training engineers in nuclear work and have got together a special project team to examine in detail all the technical, economic, social and financial problems connected with the installation and operation of a nuclear station. The board will need to consider all aspects of the project before coming to a decision to recommend such an installation to the Government. The advice of the new Nuclear Energy Board will be required by the Government before any decision is taken on this project. If a decision is taken to proceed with the commissioning of such a station which, as I have already indicated elsewhere, could cost up to £70 million at current cost levels then additional capital will need to be provided for the ESB but, of course, such expenditure would not arise for some years to come.

In addition to expenditure on generating plant, a sum of about £55 million is estimated to be required for other essential items, mainly transmission and distribution networks. The total required for approval by 31st March, 1975, will, therefore, amount to about £380 million.

Increasing the limit on ESB capital expenditure will not involve demands on the Central Fund. Since 1955, the board have raised their own capital without recourse to the Exchequer, except, of course, for the State contribution to the capital cost of rural electrification. The board's programme for capital expenditure within the statutory limit is required to be submitted in detail for my approval from time to time.

At present, the ESB maintain separate rural and non-rural accounts and separate provision has been made by statute from time to time for the capital necessary for rural electrification and for other purposes. Now that well over 90 per cent of potential rural customers have already connection to the electricity supply and that we are making provision for accelerated connection of the remaining rural households, I consider that the time has come to integrate the two separate accounts and to make one general provision for total capital expenditure. Integration of the accounts and of the statutory provisions will not affect rural subsidy arrangements, but it should help to simplify ESB account procedures and thus to some extent at least reduce costs. As I have already stated, expenditure on rural electrification by the ESB is expected to reach £67 million by 31st March, 1975, while expenditure required for general purposes by the same date is expected to be £380 million. The combined total of requirements is, therefore, £447 million and the Bill proposes to fix the limit of £450 million.

One of the main difficulties of any electricity supply authority is the variable rate of demand for current arising during any 24 hour period. In Ireland, so far, due to the absence of any substantial three-shift industrial base, the daily load curve has had a high peak and low valley. The erection of pumped storage plants of the type being commissioned at Turlough Hill will enable cheap electrical current from the valley period to be used to pump water to the upper reservoir which will then be available to generate current during the high cost peak demand periods. This operation is, therefore, obviously designed to flatten the demand curve to some extent. An electricity authority has to have available sufficient plant to meet peak demand together with sufficient reserves to cope with plant outages. This means at any one time an electricity authority must have far more plant capacity than is necessary to meet average demand. I might illustrate the point by stating that in the year ended 31st March, 1970, the ESB had total plant capacity of 1,410 megawatts to meet a peak demand of 1,128 megawatts, while the average demand during that year was just under the equivalent of 600 megawatts. It is essential, therefore, that the ESB should do all in their power to increase valley hour usage while reducing peak hour usage. In recent years, there is definite evidence of progress in this regard by the board. In the year ended March, 1967, for example, peak usage was 5.21 times valley usage. This figure was reduced progressively each year in the next four years so that the peak in the year to March, 1971 was reduced to 3.78 times valley usage.

It is because of the need not alone to meet peak demand, but to have a reserve or security margin in addition and because it is not practicable to store electricity in large quantity that such very large capital investment is necessary in an electricity system. Ireland is not unique in having peaks and valleys in the daily demand curves for electricity and, indeed, neither are we unique in having to invest an ever growing proportion of our national resources in electricity generation. Electricity has, of course, become the most acceptable of all types of energy and the ever growing demand for it is evidence of increased national prosperity and an index of our continuing industrial and commercial growth.

I think the capital expenditure figures I have given should bring home to Deputies the extent of the growth of this our largest industrial unit and the extent to which this industry has grown and requires to grow in order to supply power to our growing industrial, agricultural, commercial and domestic needs. Expenditure of £157 million by one semi-State body in the short period of four years is very heavy expenditure, indeed, which poses very considerable problems for the Government and for the board. The sums of money now involved are such as to require the ESB to have recourse to foreign borrowing to an increasing extent. Common prudence apart, resort to borrowing from financial institutions abroad requires that the affairs of the ESB be managed as efficiently and as economically as possible. It is essential that the board be enabled to balance their accounts taking one year with another as any action to unduly depress prices or force the board into a position where they are not able to recover their costs could be disastrous not alone for the ESB themselves, but for the success of any development programme we may wish to undertake over coming years. I am, of course, very concerned that the ESB continue to supply electricity at the cheapest possible cost and in the most efficient manner possible. I have already indicated that I am personally quite satisfied that the ESB are in the forefront of electricity authorities throughout the world in supplying cheap electricity, but to ensure that the affairs of the ESB continue to be conducted efficiently, I am, as already announced, arranging to have a special investigation made into the efficiency of the board's operations.

I commend the Bill to the House.

Dr. O'Donovan

Booh to the last bit.

Mr. O'Donnell

This Bill reflects the continued growth and development of the ESB and highlights in a dramatic way the tremendous progress that has been made, particularly in recent years, in relation to the extension of rural electrification.

This Bill has a number of purposes. The most interesting development here is the fact that the Government are now proposing to make an extra £10 million available to the ESB in respect of a programme of expenditure of £18 million on rural electrification during the four years ending March 31st, 1975. The Minister devoted most of his speech to the history of the development of rural electrification. It is no harm that attention should be directed to the manner in which the extension of electricity has transformed rural Ireland in recent years. The statistics given by the Minister for the number of households which have been connected and also the rate of increase in the consumption of electricity in rural Ireland—it is running at an average rate of 10 to 11 per cent as compared with the urban increase of 9 per cent —indicate the tremendous economic and social transformation that has resulted from the extension of electric current to rural Ireland.

I am very conscious of this fact by reason of my former very close association with that well-known rural organisation, Muintir na Tíre, and particularly by virtue of the number of years apprenticeship I served to the founder of that organisation, the late Canon Hayes. I recall the tremendous field work that was done and the co-operation that was given to the ESB by Muintir na Tíre in its earlier days. I remember, in particular, and I think it is only right that we should acknowledge outstanding contributions by public servants, Mr. William Rowe, who was a deputy chief engineer in the ESB and who was the man who spearheaded the rural electrification programme and who was also a member of the National Executive of Muintir na Tíre, a man whom I had the pleasure of knowing and whose friendship I enjoyed for a number of years.

The transformation that has been effected in rural Ireland by the advent of electricity has been colossal. As a person who has had a keen interest in rural Ireland, one thing that strikes me is the fact that despite the arguments put forward by sociologists and economists prior to the advent of rural electrification that one of the reasons for the high rate of depopulation was the drudgery and darkness of rural life, despite the fact that electricity has brightened up rural Ireland and has effected a tremendous transformation in rural industry, agriculture and domestic life, unfortunately, the rate of rural depopulation has not slowed down. There is no doubt that whatever progress has been achieved in agriculture, particularly in the dairying industry, has been made possible, to a large degree, by the availability of electric current to farmers.

The other advantages to rural Ireland following the extension of electricity have been outlined by the Minister. He has referred to agriculture, rural industry and the development of the tourist industry in the rural areas and the role which electric power has played in all these developments. It is also well, when we look at the ESB as it is today and look back on the history of the ESB and see the tremendous contribution it has made to national development and to social progress, to recall and pay tribute to the great men who pioneered the development of electrical current in this country. I refer in particular to what must have been the colossal undertaking in the 1920s of the harnessing of the River Shannon and the establishment of the hydro-electric power station at Ardnacrusha and particularly the two men whose names will be ever synonymous with the ESB—our former very distinguished colleague, Deputy Paddy McGilligan, and the late Dr. Tommy McLaughlin. As one who comes from a constituency adjacent to Ardnacrusha, I feel it is only right, now that we are approaching the 50th anniversary of many great happenings associated with the foundation of this State, that apart from the securing of national freedom the men who built this State and laid the foundations for economic and social progress should be recalled to mind.

The Minister is providing £10 million more for the ESB to complete the job of rural electrification. I understand that about 90 per cent of households are now connected and whatever part of the remaining 10 per cent as can be connected at what the Minister calls reasonable costs will be completed by the end of four years from now.

The Minister referred to the special service charge. Because of my background and association with rural development generally I cannot but say that my great desire is to see every household in rural Ireland with electricity. I think the Minister wants that also. I do not believe in making political speeches in relation to highly technical matters such as are involved in this Bill. I realise very fully that there are difficulties. I welcome the decision to accelerate completion of the rural electrification programme but I have grave doubts about it because the Minister has suggested in relation to the special service charge that the price quoted for connection is reasonable. I know, and I am sure so does every Deputy including the Minister, of cases where completely unrealistic figures have been quoted to householders seeking connection. I do not know if the Minister can supply the figure but I should like to know the total cost of abolishing the special service charge altogether particularly when only 10 per cent of households in rural Ireland now remain to be connected.

I have seen what appears to me to be outrageously high figures. In one case recently £200 was quoted to a widow living in a very small house. Perhaps, at a later stage the Minister by way of question and answer, might be able to furnish information to me on the cost of abolishing the special service charge or considerably reducing it. I know it was reduced in 1968 and that that reduction resulted in a considerable number of households being connected but as we move towards completion of the rural electrification programme we shall be dealing more and more with isolated households which are more difficult to reach and the cost per house, therefore, will be greater in view of the fact that the number of houses remaining is becoming smaller all the time. I wonder would it be possible to introduce a special low rate which would enable almost 100 per cent connection to be effected.

Despite the Minister's optimistic forecast in regard to the final mopping up operation in relation to the extension of rural electrification, I cannot see this being achieved if the ESB continue to quote the prices they are, and have been quoting, judging by instances I have come across.

Many of my colleagues have complained about this and questions have been asked here about it, particularly by Deputy Murphy whose constituency, because of its geographical location, has, perhaps, more scattered households than any other part of Ireland. This special service charge is a bone of contention. Perhaps, now that the Minister is making a special effort to complete this colossal programme of electrification it might be possible to abolish this charge. I have already acknowledged the tremendous transformation effected in rural Ireland by electricity, apart from the economic advantages in regard to modern agricultural development, development of rural industries and tourism and the growth of hotels and guesthouses and so on. Most of this development would not have been possible without electricity. A special case can now be made to ensure that the remaining 10 per cent, or whatever the figure is, of households in rural Ireland would be connected with the electricity supply.

People frequently do not appreciate the tremendous difference electricity has made in the lives of people in rural Ireland. I was very conscious of this some years ago when the Galtee area of east Limerick was in the constituency I represented before it was transferred to the west Limerick constituency before the last election. In my time as a Deputy for that area we had a number of isolated pockets there and I was personally involved in negotiations to secure electricity and about 35 or 36 households were connected there at that time. With electricity came modern agricultural methods such as milking machines and cooling equipment which are now so necessary for the dairying industry, domestic equipment and television. I have studied this very closely as a student of the sociology rather than of the economics of rural Ireland. I have been tremendously interested by the way in which the whole way of living of the people in this rather isolated, semi-mountainous area was transformed by electricity.

Therefore, in the interests of the remaining households which the Minister now proposes to have connected in a massive operation, I hope this aim will be realised but I am prepared now to forecast that the Minister will have to come back to the House again if he and the Government are serious in ensuring that everybody gets an electricity supply. Some scheme will have to be devised to make it financially feasible for every household to be connected. This must be the aim within the limits of reason. I could not quantify it at this stage and give the number of houses that it would be physically impossible to connect to an electricity supply but there are such houses.

The Minister also proposes in this Bill to effect what I would call perhaps, in my ignorance of accounting procedures, an integration of the two accounting systems. I think that that is the best way to describe it. Up to now rural electrification capital was separate from general purposes capital for accountancy purposes and it is now proposed to integrate the two. The Minister used the word "integrate"; he said he considered the time had come to integrate the two separate accounts and make one general provision for total capital expenditure. Rural electrification is desirable on social grounds and, therefore, the community will be asked to pay the cost. I have said here before in discussions on Bills relating to other State or semi-State bodies, CIE, the air lines and so on, that there should be a more realistic system of accounting and presenting accounts.

I am in favour of a system that would separate what might be called the true economic cost of a development from the community or social cost. A classic example of this is the railways and the cost to the community of maintaining uneconomic transport services. In regard to the ESB, there have been developments during the years, particularly with regard to the peat fired stations and a number of two or three megawatt stations around the western seaboard which, if assessed solely on an economic basis, would not be justified in comparison with alternative sources of power. The cost of generating electricity through the peat fired stations and the smaller stations in the west is greater than by using other types of generating stations.

I should like to see a system whereby the cost of providing electricity by means of what could be termed the less economic forms—such as peat fired generating stations which are justifiable for community or social reasons— would be spelled out. I have also been advocating that the cost of maintaining the railways should be stated clearly and in relation to the airlines their contribution to the tourist industry should be assessed. It is unfair to a State-sponsored body, such as the ESB, to judge their performance solely on commercial balance sheet returns. Some assessment should be made of the social contributions of these bodies through the provision of services which are desirable on social grounds. However, the cost should be identifiable in the annual reports.

The Minister spoke about the general capital requirements of the ESB. It is not inappropriate that the Dáil should have an opportunity at this stage of looking at the ESB in toto, particularly having regard to the recent public outcry following the announcement of increased charges. This led to my calling, on behalf of my party, for an inquiry into the performance of the ESB and in reply to a parliamentary question recently the Minister stated that he had decided to carry out an independent investigation in this connection. The Minister repeated this in his speech today, although Deputy O'Donovan is totally opposed to it.

Dr. O'Donovan

What good will it do?

Mr. O'Donnell

We will hear the Deputy's reasons when he speaks.

Dr. O'Donovan

Let us hear the Deputy's reasons. It was he who proposed the inquiry. He has not given any reasons yet.

Mr. O'Donnell

The situation has been that the ESB recently announced substantial increases in charges and they indicated that there would be further increases before the end of 1971.

Dr. O'Donovan

They are nearly as high as are the increases in the prices for cattle.

Mr. O'Donnell

I may have been a student of Deputy O'Donovan for a few years but I should like to remind him that I am not a student of his any longer. I have paid tribute to his tuition on many occasions but I cannot agree with his statements in Parliment. However, we will agree to differ. I think the Minister is a former student of Deputy O'Donovan?

Mr. B. Lenihan

Yes.

Dr. O'Donovan

I do not agree with them on this issue.

Mr. Coogan

Has the Deputy no influence over them?

Dr. O'Donovan

Not any longer.

Mr. O'Donnell

Since I have been elected to this House I have always tried to be in a position to stand over any statements I make and fortunately I have rarely been caught out. In the latter part of his statement the Minister gives a general review of the ESB. When I advocated an independent examination of the ESB I did not say that they were an inefficient organisation—I have not said so at any time, I am not saying it now. However, there was general consternation among the public when the ESB announced their recent increases. It is the duty of a public representative to reflect the views of the people, not to propound his own theories.

In view of the fact that charges were increased some months ago it was extraordinary that a second increase should be made out of the blue and a third increase is pending. The necessity for the increases is difficult to understand, particularly when one takes account of the continuous growth in the consumption of electricity. The Minister referred to the fact that the average annual increase in the consumption of electricity in recent years is higher in Ireland than in any other country in western Europe. The man in the street would take the view that as consumption of electricity is increasing, revenue to the board is rising also and therefore costs should be stabilised.

I took the trouble to investigate the situation. Last week in reply to a question which I tabled in regard to the investigation of the ESB, the Minister stated that the ESB were an efficient organisation but, for the purpose of convincing the public that the ESB are efficient, an independent investigation should be carried out. This is a desirable course to adopt. State-sponsored bodies are accountable to the taxpayers and this is as it should be. Not merely must they be efficient, they must be seen to be efficient. It would be a poor reflection on the intelligence of the people if they did not question the recent announcement of increased charges. It is foolish to pretend to the public that we will allow this to go without making any comment. A public representative who does not take notice of what the public are saying is falling down on his job. Since I called for an investigation, and since the Minister announced that he had decided to have an independent investigation carried out, I have taken the trouble to study the ESB's performance. I have been given every facility by the ESB from the chairman down. They were prepared to open any door, answer any question, or place any information at my disposal that I looked for. I could not carry out a comprehensive investigation of the type for which the Minister will pay £7,000 a week or a month to McKinsey. From the point of view of satisfying myself as a public representative I got every facility from the ESB. I looked into it fairly thoroughly.

I am a bit surprised that the Minister did not avail of this opportunity to spell out some of the figures which I secured over the past week in relation to the performance and efficiency of the ESB. The demand for electricity has been increasing at an enormous rate in recent years. In 1966-67, the increase was 8.6 per cent. In 1967-68 it was 10.3 per cent. In 1968-69 it was 11.8 per cent. In 1969-70 it was 10.5 per cent. The average annual increase in the OECD countries was 5 to 6 per cent only. The sales graph shows a corresponding pattern. Of course, sales are related directly to the consumption of electricity. The public have been puzzled by this. Sales are going up all the time and, at the same time, it has been found necessary to increase charges. When I looked into the reasons for the increased charges I found a rather interesting situation. I found that the increased charges were necessary for three main reasons. One is the colossal increase in fuel charges. The second is the increase in the cost of capital and the third is the higher salaries and wages which had to be paid within the guidelines of the national pay agreement.

The public are not aware that in the past two years the increase in the cost of oil was more than 50 per cent. On an annual fuel bill of £4.3 million, which was the figure for 1969-70, this represents a colossal increase in costs. It serves to emphasise what was said here a few weeks ago in the debate on the Nuclear Energy Bill about the vital importance of looking for alternative sources of supply to fuel supply. The ESB are dependent to the tune of 50 per cent for the generation of electric current on imported oil. As I have just said, one of the factors leading to increased charges was the colossal increase in the cost of fuel—50 per cent in one go, so to speak.

The cost of capital was a very important factor also. Heavy capital borrowings have been necessary to meet the ever-growing demand for electricity. The ESB have borrowed from many different sources: from the International Bank for reconstruction and development, and from Irish, German, Swiss, and United States banks. The cost of servicing borrowed capital has also increased. I understand that loans from the World Bank are available for the specific purpose of increasing generating capacity at 6½ to 7¼ per cent. Capital requirements for network extensions have to be met by the issue of stocks at about 9 per cent. From what I have read about the capital requirements of the ESB and how they have been met one striking thing emerges, that is, that it is estimated that additions to network are now costing the board nearly 12 per cent per annum in interest and sinking fund provisions alone. As I said, the third factor was the increase in wages and salaries. I think £13 million or 28 per cent of the board's operating costs went on wages and salaries last year. Therefore, wage and salary increases will have an impact as well.

Those three factors, the increased cost of fuel, the cost of capital, and wage and salary increases, were absorbed by the ESB up to comparatively recent times. Of course, the board are compelled by legislation to equate revenue with expenditure. The aim has been to absorb increased costs by higher productivity. Here is the point, and here is the catch, and here is where the real key to the recent increases can be found: due to the generally higher inflationary tendencies, increased productivity is no longer sufficient to meet increased costs. This is the key to the whole thing. Increased inflationary tendencies and this insidious spiral of inflation have been with us for quite a while and have hit the ESB as well as everyone else. They could not equate revenue with expenditure without increasing their charges.

The question still remains—and, perhaps, here is where the Minister's idea of an investigation into the ESB might be useful—can productivity be improved or increased? As a result of the independent investigation which the Minister is carrying out it may be found that at the moment there are certain areas where efficiency might be improved. I do not know. I am not competent to judge and I have no intention of making pronouncements or judgments of this nature. The only thing I can take is the general situation in the ESB. It would appear that there is little scope for increased productivity. I have found a very interesting set of figures which show the comparison between ESB electricity tariffs and the tariffs of a number of electricity boards in the United Kingdom. I got a list of 16 of them. I suppose the Minister has it as well. I think I am doing the Minister's job today.

Mr. B. Lenihan

The Deputy has done very well to get that. It is very interesting.

Mr. O'Donnell

These are very interesting. I have commented publicly on the recent increases and I have called for an investigation but, at the same time, I want to be honest and fair and say at this stage what I have found from my investigations and then see can we arrive at an answer to whether an investigation is called for. As I said it is possible that there are certain areas where efficiency might be improved, where productivity might be improved and so forth. I want to compare the ESB tariffs with the tariffs of various electricity boards in the UK. I will quote from the Electrical Mail, which is the journal of the Electricity Supply Board, for July, 1971. This was sent to me by the ESB after I had my discussion with them. Out of 16 boards in the United Kingdom there are only two which show more favourable tariffs than the ESB. One of the two is the Belfast Corporation and the other is the North Western Board. The more favourable terms they show are in respect of certain categories in the 1,500 to the 3,000 units. Electricity charges here compare very favourably. The figures I have got—I assume they are accurate—reveal a very striking situation. Electricity here is cheaper than it is in the United Kingdom.

Mr. B. Lenihan

A lot cheaper.

Mr. O'Donnell

As we know, the ESB is compelled by law to equate revenue with expenditure and the board had no option but to increase charges recently. However, these increased charges have an implication, in my opinion, more for the Government than for the ESB and blame for the increases must be shouldered to a very large degree by the Government because of a policy which has led to the serious inflationary situation we have, an inflation affecting all spheres of national life.

As I say, the ESB charges compare more than favourably with those of similar boards throughout the United Kingdom. I have not got the figures for the Continent—I was supplied with them but I did not have time to analyse them—but I am sure that the ESB compares favourably with Europe as well. The significant aspect, in my opinion, in relation to my seeking an investigation, and the Minister announcing he would carry out such an investigation, is the importance of properly informing the public and any such an investigation should convince them that the ESB is as efficient as it can be and should be and is doing a good job. What kind of investigation should the Minister carry out? I do not know. I would hesitate to recommend the employment of the famous McKinsey people again, remembering the fees they charge.

We have had a number of debates here in the past eight or nine months on the relationship between State-sponsored bodies and Parliament and the public accountability of such bodies. Deputy O'Donovan moved a Private Members' Bill some months ago on this very matter. If there were a proper system of parliamentary accountability introduced much of the ill-informed and, in many cases uninformed comment and criticism in regard to State-sponsored bodies from the public generally and from Members of this House could be avoided. This was brought home to me very forcibly the other day when I was having a discussion with the chairman of the ESB. If there were a proper system of accountability we would not have to go around seeking information. The executives of the board could meet a parliamentary committee; in that way there would be parliamentary control and we would also know what the situation was in the ESB and, more important still, the public would know.

The Minister for Transport and Power has more State-sponsored bodies under the aegis of his Department than has any other Minister and it is becoming an impossible task for Deputies to keep abreast of developments and to make a proper assessment of the performances of these companies, most of which deal with highly technological and highly sophisticated developments. If we had this system of parliamentary committees to examine the performances of State-sponsored bodies it might not be necessary to employ foreign consultants to the same extent that we have been employing them up to this and the public would be better informed and would have a better understanding of the problems involved. From my experience of State-sponsored bodies I believe they would welcome a situation in which we could be properly informed of their progress.

The ESB has made tremendous strides. It was the first State-sponsored body to be established. Its history has been one of continuous growth, development and expansion. We had a debate a few weeks ago on nuclear power and obviously the next decade will be a period of tremendous development. The Minister referred to the financial difficulties involved. I believe the ESB will more than adequately meet the challenge of the future and I believe the staff will prove equal to whatever challenge may be presented technologically. The development of nuclear energy is inevitable and it is vital that we get away now as quickly as possible from our very dangerous over-dependence on fuel oil as a source for generating electricity.

One point in relation to the ESB which I want to mention in passing is that of safety. I was rather alarmed to read that over 600 accidents, including two fatal accidents, affecting ESB employees occurred in the last year.

I am also concerned about the question of safety in relation to the general public. It is essential that the public be properly informed about the dangers which can result from faulty communications and from the improper use of instruments or machines powered by electricity. Scarcely a month passes by without one hearing of somebody being electrocuted.

I understand the ESB are tackling the problem of safety. They have appointed a special officer and established a special section to deal with it. I am very conscious of the dangers of electricity because a member of my family, who was using an electric drill which was live, was saved by the quick action of a workman. I am sure others are aware of personal experiences of this kind as well. I would urge on the ESB the desirability of ensuring that the public are fully informed of the dangers of faulty connections and so forth and that proper standards will be introduced in the matter of electric installations in private residences and particularly on farms. I understand strict standards are applied in relation to industrial installations and hotel installations but I am concerned about people on farms where rough and ready jobs have been done and where there are electrical appliances which are connected to plugs which have not been properly wired and so on.

I hope the ESB will continue to progress. I am confident the ESB will continue to play an important role in the national development of social programmes. I am confident in the likelihood of our entering the EEC that the ESB will prove their worth and show themselves to be as efficient as electricity boards on the Continent. I hope the ESB will be able to provide electric current for industry and agriculture at the lowest possible rate and thereby enable our industrial and agricultural exports to be competitive.

Dr. O'Donovan

I should admit straight away that I have not applied the same energy to the affairs of the ESB as Deputy O'Donnell has. I have given some thought to the affairs of the ESB. The last increase in charges was made about a fortnight ago and certain comments were made through the news media about these increases. I made no comment because I could not be found. The Minister was at the launching of a boat and I was on the bogs with Bord na Móna on that day. I do not think they thought the day was all that suitable but it was all right as far as I was concerned as the only new engine which they had brought into the place was able to work. I had seen all the others previously.

I am going to start in reverse and talk about the Minister's suggestion that he is going to have a new inquiry into the ESB. Different Governments approach things in different ways. There was one Minister who thought he had solved a problem when he made a nice rotund statement about it. There was another Minister whose speciality was setting up companies. He would set them up in a hurry and if something went wrong he would pass a new Bill through the House to fix it up; it did not bother him a thraneen that the whole thing turned out to be ill thought out.

If there is any particular facet of the Government's operation that is very apparent to people it is their desire to set up consultancy bodies to look into various affairs. I do not disapprove absolutely of consultancy bodies but I should like to be sure that they know something about what they are investigating. I have no great belief in American consultancy bodies in relation to a country the size of this country which is about the size of the State of Maine. The State of Maine is situated in the north-eastern corner of the United States and it is hardly ever mentioned except in connection with Presidential elections because the first primaries occur there. That is almost the only time that one hears Maine or New Hampshire mentioned.

I do not know whether the Minister saw the programme about MIT on television last night; I only saw part of it. When I was in the United States 40 years ago MIT was a very interesting place. It was nothing compared with what it is today. I was shown over it at that time by a student and it was then rather like our engineering schools are today, almost entirely technological. The programme last night showed it to be an entirely different kind of place. It was just fabulous, with miles and miles of huge buildings and an expenditure of hundreds of millions of pounds mentioned off the cuff, £100 million for this and £100 million for that.

I do not think consultancy bodies who are accustomed to that kind of territory are much good to us. I do not think the appointment of a businessman from inside the country to act as chairman of a committee or commission to inquire into the public service is very much good. I like people to know what they are inquiring into. The words of St. Augustine which I used recently in this House were: "I measure it, Oh my Lord, my God, but I know not what it is that I measure". He was talking about "time". As we all know nowadays we go in for measuring much more complicated things than time. These words written by St. Augustine 1,500 years ago are very apposite. If one is going to get people to measure the efficiency of the ESB one must be sure that they know what it is that they are measuring.

Mr. O'Hara

They will get a shock.

Dr. O'Donovan

Indeed, they might get a shock. Very often they might catch the wrong switch or something like that. The fact is that I am extremely sceptical of this kind of thing. When an organisation of this kind is set up it very often takes on decided elements of being an organism, that is to say, it takes on a life of its own and develops in a certain way. It has been said about political parties that men may join and think they can change but they find out in fact that that party have a certain kind of life and it is not that easy to push them around. Therefore, I would refer again to the Minister's statement:

I have already indicated that I am personally quite satisfied the ESB are in the forefront of electricity authorities throughout the world in supplying cheap electricity——

OK, what else is it there for? What other purpose is it supposed to be there for?

—but to ensure that the affairs of the ESB continue to be conducted efficiently, I am, as already announced, arranging to have a special investigation made into the efficiency of the board's operations.

The Minister did not announce that. He announced that he was considering it. This is the first time he has announced it. He did not announce that he was having a special investigation. He announced that he was thinking of having it. Now he obviously has come down in favour of having it. I do not mind being quoted quite categorically as saying that there have been enough investigations into the ESB in recent years. Any organisation like the ESB which is continually being investigated loses elan, loses impetus; the people who run it inevitably become discouraged. It is rather like the other angle which affects people and which does not affect the ESB at all but which is affecting too many of the other State bodies—a much more serious matter—that is to say, having big losses year after year. That affects their efficiency and they get upset and public opinion comes out very strongly against them.

I notice Deputy O'Donnell said the public should be convinced that the ESB is as efficient as it should be. What good is that going to do? What difference would it make? Suppose there is an investigation and the investigators all come out and say: "Very good. The public are now convinced that the ESB are as efficient as they should be," what difference does that make? The ESB is a monopoly organisation. It has a monopoly of the market. It fixes its prices for current, as a matter of fact, at, appropriately, just sufficient to cover its cost. It does this, so that to use the phrase, year to year, taking one year with another, it will pay its way and, unlike 90 per cent of the other semi-State bodies, it does pay its way. That is the difference and we have had it admitted here today both by Deputy O'Donnell and the Minister, both of whom are so keen on this new investigation into the affairs of the ESB, that electricity is just as cheap here as it is in England.

Mr. O'Donnell

It is getting dearer.

Dr. O'Donovan

With that Government over there how could it be getting anything but dearer? They believe in inflation. They pretend they are going to deal with inflation and every time the Minister for Finance speaks he shows he believes in inflation.

Mr. Coogan

He is a bit inflated himself.

An Leas-Cheann Comhairle

Deputy O'Donovan to resume his contribution.

Dr. O'Donovan

I will not run with that ball in his absence. If he were here I would. The Minister said:

... to ensure that the affairs of the ESB continue to be conducted efficiently, I am, as already announced, arranging to have a special investigation made into the efficiency of the board's operations.

This investigation will not ensure anything of the sort.

Mr. O'Donnell

Why not?

Dr. O'Donovan

Has the Deputy ever heard of an investigation that increased efficiency? Give me an example. Admittedly, it is answering the Deputy's question by asking another but there is a point in it. The proof of any organisation is simple. There are certain proofs that the public like to see: is it paying its way and are the charges it is making for its services reasonable? On both these tests the ESB passes with first class honours, whereas a large number of the semi-State bodies would not pass at all. They fall flat on their faces.

I was thinking about this problem last week, apart altogether from this Bill. To the best of my knowledge the ESB, the Sugar Company and the Dairy Disposal Company are almost the only State bodies that are really paying their way. If the Minister disagrees he can give me an example. If he does I will deal with it because I know these bodies fairly well. Can he give me an example other than the Sugar Company and the Dairy Disposal Company, which is relatively small? The others do not pay their way.

Mr. B. Lenihan

The airlines.

Dr. O'Donovan

Ah, come off—the airlines—would you take a jump in the Liffey? The airlines, my foot. The airlines, for aerodromes alone, are costing this country £5 million every year. There are £5 million being put into aerodromes every year. There is an item in the Estimates for it every year. Are we supposed to pretend that that expenditure is not incurred?

Mr. B. Lenihan

Irish Shipping— substantial profits.

Dr. O'Donovan

On the contrary. Perhaps in and out. Occasionally it has had a profit. Very often it has a loss, like all shipping companies. Per person employed the capital of Irish Shipping is shocking. It gives employment to about 400.

Mr. B. Lenihan

Double that.

Dr. O'Donovan

What purpose was it set up for? The cost per man employed in Irish Shipping is about £30,000 and if I could not make better use of the capital I would go off and drown myself. It would be appropriate. I am surprised at the Minister. Are the airlines on his mind at present? It would not surprise me a bit if they were. It would not surprise me one bit if all the transport companies were very much on the Minister's mind at present.

Mr. B. Lenihan

The Deputy is incorrigible.

Dr. O'Donovan

The Deputy is well informed about transport companies. I know what their losses will be like this year. We will have the Minister back in the House wearing sackcloth and ashes by the end of the year, if the Government are still in office, because of the extent of the moneys he is going to ask for for the upkeep of these transport companies. Will the Minister make a bet with me that as things are at the moment the losses on the semi-State transport bodies this year will not be £20 million?

Mr. B. Lenihan

That is nonsense.

Dr. O'Donovan

It is not nonsense.

Mr. B. Lenihan

It is utter nonsense.

Dr. O'Donovan

It is not. I happen to have good information about it and the losses on the lot of them will be very close to £20 million. Why does he not set up a body to investigate these? Of course, he has already set up a body to investigate CIE. I lay a good bet with him that they will come up with nothing worth a damn. Is it not some American company that is investigating the affairs of CIE?

Mr. B. Lenihan

We are talking about electric power now.

Dr. O'Donovan

The Minister gave me the text. I have not really developed it. I have been speaking for only about a quarter of an hour. I have not really got into the subject. There is no question about it that if the Minister wants to set up bodies to investigate Departments of State, or this or that, they would be much better employed than directing their attention to the ESB. This is much the same as people who talk first and think afterwards. There are lots of them around.

Mr. B. Lenihan

Indeed.

Dr. O'Donovan

On my right hand side, up on the right bank. It is interesting. I want to say one more word about Deputy O'Donnell. I did not hear what Deputy O'Donnell said about this increase in the ESB charges. Unfortunately, I was away. I gather he said it was deplorable. It did not take him long to change his mind. This is an example of talking first and thinking afterwards. The evening he was asked by the news media what he thought of it he said a lot of things. As I say, I am vulnerable. If Deputy O'Donnell says to me: "I did not say any such thing; look, I said it was inevitable—that with inflation these increases in charges were inevitable," I would have to admit that I did not hear them; but what I suspect he said was that this was outrageous, that it was not good enough. This is the kind of thing I would expect him to have said. It did not take him very long to change his mind because here this evening, having gone to a good deal of trouble and having worked very hard on the matter as far as I can gather, he now says that these increases were all justified, that they are due, from what we have heard from the ESB announcement, to increases in the price of fuel oil, due to increases in the price of capital—and of course in this country the rates are higher than anywhere else in the world; we have the highest interest rate in the western world—and due to increases in wages and salaries. Of course, wages have been put up when men are at rockbottom rates and at the ordinary cost of living rates, the subsistence level becomes different in different times and the rates have to go up with an inflation of 10 per cent per annum. It will be better of course than 10 per cent this year.

I amused myself by making some calculations. If the Minister would like to hear about electricity generation, I want to give him a few calculations I made while he and Deputy O'Donnell were speaking. It interests me greatly that all that was given for the installation of these gas units in the 1962 Act was a grant of £10. There are cases where it costs many hundreds of pounds to bring electricity to certain rural users and of course this was an altogether wrong approach—let me say post factum and having looked at it— stringing miles of wire to bring electricity to a couple of families instead of using other methods that might have been used. The oldest approach was to put in an internal combustion engine and generate electricity for these three or four houses. It could be done at a lower cost than the cost of putting up the poles and stringing the wires, but there was yet another method of doing it. There are two forms of gas available —kosangas and calor gas, which are both much the same, and the only answer one gets when one suggests the use of kosangas or calor gas is that they could not run their television or radio sets on that. Of course they can run their radio or television sets on ordinary batteries and the only trouble would be to get these recharged periodically or get new ones.

There is an element in this that "everybody must have everything", but the trouble is that everybody cannot have everything and the person who, whether by being born there or by choice, decides to live on a distant mountain will have to do without electricity. Mind you, he may have other compensations for living on the distant mountain that may appeal to him but he cannot have it every way and this is one of the well-known facts of life. As was said by a professor of metaphysics on one occasion, if you marry one woman, you cannot marry another, which was not a bad comment from a professor of metaphysics.

Mr. Desmond

A questionable assumption.

Dr. O'Donovan

It is not so questionable here in the Republic of Ireland legally—it is true all right here. This grant was increased to £35 in 1968 and that showed an element of common sense coming into the Government when they increased the grant for these gas units to £35. Mind you, it should be increased still more because the further you go in trying to fill in all these little bits and pieces electrically, the more expensive it is going to be.

I come now to my own calculations which amused me arithmetically. I found that on an expenditure of £49 million, there was a subsidy of £17 million, which is about 33? per cent, and on an expenditure of £27 million in respect of the present development, there is to be a subsidy of £17 million. The subsidy was 33? per cent on the earlier expenditure up to now and it is going to be 60 per cent from now on. The subsidy element is to be £10 million on the £17 million as against £17 million out of £49 million. If you twist the figures around what is amusing about it is the arithmetical aspect that the £49 million is going up to £67 million—that is going up 33? per cent as well—and strangely enough the subsidy is going up from £17 million to £27 million. That is going up by 60 per cent also, the amount as distinct from the ratio of subsidy. This happens to be an arithmetical trick. The figures from their nature have come out that way—they agree with one another and you get these kind of peculiar—it is like fiddling with figures —things happening. You get this kind of coincidence.

There is no question about it that when we consider that it was only in 1970, that we had the last limit— a year and a half ago we had the ESB Bill which fixed the previous amount, to the best of my knowledge, at £340 million. Am I right?

Mr. B. Lenihan

General capital.

Dr. O'Donovan

But the general capital will now be £450 million.

Mr. B. Lenihan

That is right.

Dr. O'Donovan

It is only about a year and a half ago——

Mr. B. Lenihan

As I explained here, I am really anticipating the future.

Dr. O'Donovan

I appreciate this, but there is no reason why the Minister should not have anticipated it a year and a half ago as well as now.

Mr. B. Lenihan

In the ordinary course of events I would not have provided it together—I used the occasion to kill two birds with one stone.

Dr. O'Donovan

I will not disagree with the Minister but I am justified in pointing out that even if it is going to cover us for a longish period of time, it is an extraordinary increase in relation to a job which in effect was already done.

I then come to expenditure on electricity in which we have indulged in this country. The Minister points out that we have an increasing demand for electricity of 13 per cent in rural areas and he now says that urban areas are 10 per cent at the moment.

Mr. B. Lenihan

9 per cent.

Dr. O'Donovan

There was a period in the middle sixties when the rate in urban areas was going up at a higher rate but this would be expected. What I do not understand in connection with this matter is why the State, or the ESB, will not face up to something which I mentioned, I think, to the Minister on the last occasion the Bill was before us, that in England time and again they have had excessive use and had to have blackouts. Blackouts are not the worst things in the world. If you are paying 10 per cent for capital and you have an excess of power installed, it might be a great deal worse than having an occasional blackout. The Minister has said:

It is because of the need not alone to meet peak demand but to have a reserve or security margin in addition and because it is not practicable to store electricity.

We all know about its not being practicable to store electricity, but as to the reasons for security margins in addition, I am one of these strange people who see nothing wrong with having no reserve for peak demand. Let me also say this—as I said already —that I am informed that our Electricity Supply Board are meticulously careful to observe the limit the manufacturers set and not to go over the limits in the use of the generators set by the manufacturers, whereas I am again reliably informed that in Germany and in England, they push these generating sets far beyond the limits set by the manufacturers because the manufacturers naturally allow themselves a wide margin of safety for their own good names. I am told that one could, with safety, push these generators to a greater capacity than they are being pushed at present. This would reduce the massive capital costs involved. My only criticism of the ESB is that they are too careful about safety standards. There may be many people who would not agree with me on this but I am aware that in both Germany and Great Britain these generators work to a greater capacity than ours.

It has taken much longer than envisaged originally to complete rural electrification. This project was to have been completed by the year 1960, but 11 years later it is still uncompleted. Of course, in the world of today people want everything but it would be impossible to provide them with everything they want. Before reaching this stage at all it might have been better if the Government had not paid so much attention to certain rural Deputies who came here and asked, for instance, "When will electricity be supplied to Ballylickey?" Ballylickey is a hamlet which is very much isolated but they have electricity. The nature of democracy is such that people representing such an area make the best case possible. In the words of Deputy O'Donnell this is not rural economics, but rural sociology. I might say that there is no such subject in reality as sociology. Subject to these comments I approve of the Bill.

Mr. Coogan

I rise to stress the importance of rural electrification. This question affects my constituency very much. In particular, it affects that part of the constituency from outside Galway city extending to the coast and, further, to the Aran Islands. Deputies such as Deputy O'Donovan would not have many people calling at their doors inquiring about when electricity will be supplied to their area but I have many people calling at my door making such inquiries and it is not mere hamlets that are involved.

Dr. O'Donovan

Carraroe and the whole of Connemara was supplied years ago.

Mr. Coogan

I am afraid the Deputy is talking about the main roads. I could take him along by-roads where there are many people who have no electricity supply. I could take him to many places in my constituency where people still depend on the paraffin lamp or the candle. Indeed, I might say that it is hardly possible now to buy a globe for one of these lamps. People come from Dublin and buy the lamps as antiques.

Dr. O'Donovan

I was about to say that they would be able to obtain them in the antique shops in Dublin.

Mr. Coogan

In the past some old people would not agree to have a supply connected to their homes and the result is that the younger people are deprived of this very necessary amenity. All over the countryside new houses are wired for electricity but supplies are not available to them. Central heating units are installed in many of these houses but they are useless because of the non-availability of power. It is time that we made life worth living for these people. I would stress the priority of west Galway because the people in that area depend to a large extent on tourism. Many farmhouses and other houses provide accommodation for visitors but the tourists who come are not prepared to accept a paraffin lamp or a candle as a means of lighting. Supplying electric power to this area would be a very definite way of helping the west.

There is a real need for the laying of a heavy line from Rahoon, through Furbo and further along the coast. It is galling for people out there to look down on Galway city and see the lights flooding the sky while they themselves have no supply. Apart from domestic lighting and heating there are people in these areas who rear pigs and it would be very helpful to them to have electrification. It is important that anyone in an area such as west Galway or in any other area for that matter who is anxious to start a small home industry, should be encouraged to do so, so that emigration might be stemmed. Service charges are crushing in some areas and I am sorry there is nothing in the Bill to indicate that these charges may be reduced. However, it is the bill that comes from the ESB which interests these people. Perhaps the Minister will give an indication of some hope in this respect. All of this is a far cry from the time that the proposed Shannon scheme was referred to as a white elephant. Of course, it is not very popular to mention that point in the House.

Mr. O'Donnell

It was Mr. MacEntee who said that.

Mr. Coogan

Regardless of whether it was a white or a pink elephant, we must get on with the job. I have mentioned here previously the question of nuclear energy. This seems to be on the long finger. The Minister mentioned Turlough Hill where, I understand, water is pumped all day to the top of the hill and then let run down at night. I wonder what are the economies of such a scheme. Previously, too, I referred to the harnessing of the tides. There is a continuous supply from the tides. Time and tide wait for no man and I hope that something will be done towards harnessing the tides——

Mr. O'Donnell

In the Shannon Estuary.

Mr. Coogan

I do not mind where it comes from. The Shannon is a dirty word as far as some of these people are concerned in relation to electricity. I should like the Minister in his reply to say what the hopes are. I think it could be done at a very low cost. I have mentioned the question of electricity for the Aran Islands. I mentioned it many years ago. I should like to know whether the Minister has anything in this Bill; he has not mentioned it but they are at the talking stage about the provision of electricity in that area. Aran is one of the greatest tourist areas in the west and I should like to know what they are doing. Are they getting on with the job and seeing that people will have this amenity to cater for tourists?

I do not propose to hold up this Bill one minute. In fact, it is many years late. The spending of this money is to be spread over four years. People have already been told they will not get electricity until 1975 in my area. These people are catering for farmhouse holidays. The Minister has said they will get priority.

Mr. B. Lenihan

They will get priority.

Mr. Coogan

They will but you cannot offer your house to a person unless you have electricity. There is no priority in the case of a man who has nobody coming in his door. He has to prove himself first. There are many people in this area crying out for electricity. Hardly a week goes by that I do not have people calling about it. I have pressed it in this House and I will continue to press it and to question the expenditure of this money.

I welcome the extension of rural electrification because it plays a very important part in the life of my area.

Mr. Kavanagh

The success of the rural electrification scheme can be gauged by looking around this House today and seeing the number of rural Deputies who are prepared to contribute to this debate. I should imagine that on a similar debate some years ago quite a number of extra Deputies would have come in to contribute. Perhaps, the problems of rural electrification exist only in the west and in Wicklow. I hope that is so. I hope all the other counties are now more or less up to date.

Mr. Coogan

We might get priority then.

Mr. Kavanagh

Difficult counties such as ours, mountainous areas and the like, are being left until last. County Wicklow on the eastern side of the country has undoubtedly been left until last.

One of the first speeches I made when I came into this House was on the Estimate for Transport and Power. On that occasion I raised the question of special charges. It was obvious to me from the number of complaints I had received from rural areas that the ESB never refused anybody electricity. They just sent out an estimate which was so high as to be impossible for the ordinary rural householder to meet. I produced three letters which on that occasion had been sent to me by three householders in my constituency. The estimates for the special charges were something like £68 in one case, £170 in another and £350 in the third case. It was simply a way of saying "No". It was a polite way, perhaps, but it meant that these people were put off indefinitely.

As far as I can see, there are three types of household remaining to be connected. There are households in the more remote areas which have never been canvassed. These are the households which the Minister says will be connected in the next four years. These are in the more difficult areas. They are the most costly connections, the more scattered houses and, therefore, I must admit that possibly they should have been left until last.

The second type of household which remains is in an area which has already been canvassed. For one reason or another the people refused or were not in a position to avail of the service when they were canvassed. There are quite a number of such cases outstanding. The situation has changed in a number of these households. Perhaps, the head of the family on the occasion of the initial canvass was not in a financial position to accept the extra burden. Perhaps, there is now some extra prosperity in the household, more wage-earning individuals in the household and they are in a position to afford electricity. Perhaps, simply after seeing the advantages of it they have decided they want the service. These people, I think, are in a majority in Wicklow because it is from this type of case that I get most complaints and this is the type to which I have already referred who have got very high estimates for connections.

In some areas I believe people were not canvassed at all. I wrote last year to the ESB area office at Brewery Road, Stillorgan. I made representations on behalf of three in the Tittour area of Newtownmountkennedy which is only 22 or 23 miles from Dublin. They were never canvassed when the area got its service. They state categorically that they were never approached even though they were willing to have service.

Mr. B. Lenihan

They will get a chance now under this.

Mr. Kavanagh

I wanted to say that I pointed this out in a letter last October or before that and I never received a reply from Brewery Road. I wrote again a month ago pointing out that if I did not receive a reply I would raise the matter in this House because this seemed to be the only way to draw attention to it. I still have not received a reply.

Mr. B. Lenihan

That is not good enough. If the Deputy will give me particulars of that——

Mr. Kavanagh

I shall certainly give the Minister the particulars. I do not regard myself as anybody special or requiring special treatment but I think that sort of treatment of public representatives——

Mr. B. Lenihan

I agree.

Mr. Kavanagh

——is downright shabby. A mistake could have been made on the first occasion but I cannot understand it on the second occasion when I left them in no doubt that I was rather annoyed with the treatment I have received. It makes me feel that these people were, perhaps, left out and that there is no excuse for it. Since there is a team now working in the Calary area of Wicklow, perhaps, they could do the job in the Tittour area of Newtownmountkennedy.

The third group are people with new houses. There are too few of these in rural areas in Wicklow. The house building programme by the local authority there is downright disastrous. In the past few years there have been only 46 houses built by the local authority so it has not been a great problem for the ESB to service them. There has been quite a lot of building by individuals with SDA loans et cetera.

The Minister pointed out that in 1967 the estimate was 26,000 new installations required. I do not know what period that covered, whether it was to be done immediately or in the four years. He went on to point out that 34,000 installations were made in the last four years leaving a balance of 14,000 households still to be connected. It appears to me that the estimate was out by 22,000, although I may be in error.

Mr. B. Lenihan

New houses, the rate of new house building in the rural area.

Mr. Kavanagh

Surely there would have been some estimate of the number of new houses built annually that would have been included in the original estimate? The new estimate is now 28,000. Is this a sort of mirage figure that will continue receding as the rural electrification proceeds?

Mr. B. Lenihan

We anticipate that 14,000 houses will be built in the four years in addition to the 14,000 that have yet to be connected.

Mr. Kavanagh

I still think that is a low figure judging by the demand for houses in my own area. We would certainly need to build 1,000 houses almost immediately to meet the demand in rural areas.

Mr. B. Lenihan

This is only rural areas.

Mr. Kavanagh

Half of that would certainly be in the rural areas. Perhaps, my estimate is wrong but judging by local demands, 3,500 houses annually for the next four years seems a low figure for rural areas in the whole of Ireland.

I wanted to make those comments about Wicklow in particular. We have a problem which, perhaps, is solved in some of the surrounding counties such as Kildare, Dublin and Wexford. I suppose when the ESB begin to complete some of the more inaccessible areas in Wicklow, comfortable people in this city will object to the ESB stringing wires across the countryside. We find this happening in Wicklow for various reasons time and again; people from outside are inclined to object to either house building or wiring installations. The ESB spend a good deal of money trying to make their installations blend with the surroundings. The storage scheme at Turlough Hill, which will help to even out the peak and valley periods in the use of electricity, will be a great advantage to the ESB and possibly this type of venture will have to be repeated if consumption continues to rise by the 9 to 14 per cent annually which the Minister says is the present rate.

I would not go as far as Deputy O'Donovan in saying there is no need for some reserve. There is need for a reserve and, with consumption expanding at the present rate, the reserve will be narrow enough and spending of money on generating plans will continue for years to come. There seems to be no abatement in the use of power. To some extent this is a measure of prosperity and to some extent it represents a change from traditional sources of energy. If this is to continue I welcome the Bill and I hope it will solve the problem of the outstanding households. The Minister has almost guaranteed that households not already connected will now get an opportunity of getting a supply. It will be a blessing to all who come from rural constituencies that at the very worst it will take four years to meet outstanding demands from rural dwellers for electricity. I think nobody in the House would wish to deny the few remaining thousands the benefits of electricity in their homes.

Minister for Transport and Power (Mr. B. Lenihan)

I should like to take first the final point emphasised by Deputy Kavanagh about the people in the 520 areas completed who did not apply for connections under previous schemes in these areas. Public advertisements will be issued by the ESB in the local and national Press inviting those who are not connected to apply for connection. I should like to urge all such people to apply immediately to the ESB when the advertisement appears. This is all important. This is their final chance. Whether it was because of their own neglect or their predecessors' that they did not apply in the past 25 years is now regarded as water under the bridge and they are getting a final chance. I urge them to apply now and everything Deputies can do in their constituencies to ensure that this is done will be of social benefit to these areas.

In the 272 areas that have not been completed there will be a total personal re-canvass. There will be public advertisements in the 520 completed areas to enable those not yet connected to apply and in the 272 areas not yet completed there will be a house-to-house canvass to ensure that they can all participate in rural electrification.

Mr. O'Donnell

Was I right in thinking that it is 10 per cent of the total number of households that remain to be connected?

Mr. B. Lenihan

That is correct. Our target is to get 98 per cent utilisation of rural electrification and this, in practice, is the maximum. That is our target in the next four years. The additional finance is being made available. It is a good example of planning ahead to achieve a target in the right way. Last year £3.1 million was the capital expenditure on rural electrification. The programme envisages that this year the figure will jump to £3.7 million; next year to £4.1 million; in the third year to £4.7 million and to £5.5 million in the fourth and final year of the programme. The ESB will have the required capital when this Bill becomes law. They know the job to be done and they can plan accordingly over the next four years. This is highly desirable because in recent years waiting for annual grants slowed down the rate of connection. We want to ensure that the job is completed once and for all, that we provide the necessary capital and get rid of the back-log of accumulated applications.

Mr. O'Donnell

A matter of great interest to the 10 per cent is this: is there a possibility on the re-canvass that the ESB might now be in a position to quote more favourable terms? It is not provided here but is it a possibility?

Mr. B. Lenihan

The approved charges and rates that have obtained since 1968 will now be requoted to people who prior to 1968 had more——

Mr. O'Donnell

That will mean a certain benefit?

Mr. B. Lenihan

It will be a very positive benefit because these people, prior to 1968, were quoted charges that were far above the charges now operating since 1968 when the special service charge was reduced by reason of the additional Government subsidy to enable up to 75 per cent of the cost of installation to be met.

Deputy O'Donnell raised the point about the abolition of the special service charge. It is estimated that it would cost £2 million to do this and I am afraid it is not possible. The Deputy also referred to safety and the importance of safety instructions so far as electricity is concerned. The ESB are very keen to ensure that there is maximum realisation by people of the importance of safety in regard to electrical devices. As Deputy O'Donnell stated, they have established a special safety section within the board and I can tell the House that this section is planning a national newspaper campaign on elementary safety rules, of which all should be aware.

Mr. O'Donnell

Can the Minister state if the functions of the safety officer will apply only to the board or will he have external functions in relation to informing public opinion? This is important.

Mr. B. Lenihan

It will apply to both aspects. Of course, it is primarily to ensure that the public are made safety-conscious in relation to electrical devices that this newspaper campaign is being initiated.

Deputy O'Donovan mentioned the inquiry into the ESB. I agree with Deputies O'Donnell and O'Donovan— and this point of view has been shared by the World Bank who have loaned the ESB substantial moneys in recent years—that the ESB are a highly efficient organisation. Any inquiry into their affairs will reveal this fact to the fullest extent. I am concerned that the public are made aware to a sufficient degree of the efficiency of the ESB. The most acid test of their efficiency is that during the years they have been able to raise their capital requirements on the money market, without any help from the State. They have received substantial loans from the World Bank and they will be securing further loans on the international money market to finance their very considerable investment programme until 1980. They have been able to raise these funds because of their efficiency, because they have been able to balance their books, present balanced accounts and show the overall picture of a well-run, efficient public corporation.

I would like to compliment Deputy O'Donnell for pointing out that in a publication issued yesterday there is a table setting out electricity price comparisons and it is apparent that in comparison with other electricity area boards in these islands—taking the various categories of unit into account—the prices charged by the ESB are the cheapest in these islands. In fact, the ESB have the most reasonable rates for domestic and industrial consumers in western Europe at the moment. That is linked with the fact that they have the highest growth rate as regards consumption in western Europe—11 per cent per annum in recent years. It highlights the necessity for this Bill when one considers that while the national average is 11 per cent, the average in rural areas is 13 per cent per annum.

Mr. O'Donnell

Does the Minister not consider that it is unfortunate for the ESB, from the point of view of public opinion, that there were two increases in one year and a third increase is pending? Could this not have been phased over a longer period?

Mr. B. Lenihan

The major problem facing the ESB in this matter— and this comes back to the point I made in the debate on the Nuclear Energy Bill a fortnight ago—is their growing dependence on oil supplies. The ESB must look to a future where oil prices will not be reduced, to put it mildly. The pattern at the moment shows a steep rise in oil prices by reason of the new attitudes adopted by the producer countries in North Africa and the Middle East. Unfortunately so far as the ESB are concerned, this is a fact of life; some 50 per cent of their fuel requirements are met from oil. As I emphasised in the debate on nuclear energy, this is undesirable; so far as possible their fuel and energy requirements should be diversified.

Deputy Coogan raised the point about the utilisation of tides. The ESB have investigated this matter. Generation of power by way of tide utilisation has been done at Le Rance in Northern France. In that region there are enormous tides in a narrow estuary but there is not conclusive proof as yet about the success of this method. We have investigated the various estuaries in Ireland but the only one that could be considered in this connection is Shannon Estuary. However, the tidal strength is not anything like what is necessary having regard to the present level of attainment in regard to machinery. There may come a time when it may be utilised but the ESB assure me that it is not on at the present time, having regard to the lack of appropriate type of estuary, which requires a massive volume of tide, changing from a high to a low level fairly rapidly.

Reference was made to the Turlough Hill project. This idea of storage generation, where by the storing of water it is possible to utilise the hydro-power generation at valley and peak periods, is being investigated. This project is being pursued in regard to similar sites elsewhere. One has been examined at the Comeragh mountains in County Waterford and another site is being examined also. We consider there is scope for extension of this storage hydro-electric operation which does not generate new power but enables it to be stored so that the valley and peak periods are evened up and, when required, the power can be obtained. It is a principle similar to the interconnection principle that operates in regard to the Six Counties. In this case the valley and peak periods are levelled up, by taking from one and giving to the other, as is needed between north and south.

I should like to assure Deputy Coogan that priority is given to registered guesthouses in extending supplies.

Mr. Coogan

The Minister mentioned registered guesthouses.

Mr. B. Lenihan

Yes.

Mr. Coogan

The point is that people cannot register unless they have the amenities and they cannot become registered. Therefore, they are out in the cold until they get the amenities.

Mr. B. Lenihan

That problem will be met in the crash programme over the next four years but I shall look into the point of view expressed by Deputy Coogan to see if there is any way around it.

Mr. O'Donnell

This is an important factor in view of the growing demand for farmhouse and guesthouse accommodation. Special attention might be paid to this matter.

Mr. B. Lenihan

I shall take up that point because this is one type of holiday which is expanding. If there is anything I can do to ease that aspect of it I will certainly take it up with both Bord Fáilte and the ESB.

Mr. Coogan

It is very important along the west coast where they are clamouring for accommodation. It would help the economy there.

Mr. B. Lenihan

Yes. The main purpose of the Bill has been emphasised sufficiently already. It is to ensure that in a planned crash programme over four years we will achieve a 98 per cent connection as far as rural households are concerned. We will then have really achieved the objective set out in 1946 when rural electrification commenced. We want to ensure that in five years time the figure of 14,000 rural houses then connected will have reached the figure of 400,000 rural houses connected to electric power.

We are also making use of this Bill to ensure that the new capital level of £450 million looks after the ESB requirements in the capital sense, primarily for new generation and new connection and distribution systems and that the capital programme over the next four years will also be looked after. In this two-pronged Bill we have a target for the next four years that will enable rural electrification to be completed and the capital requirements of the ESB to be taken up by them to a level of £450 million. I am certain that during that period the ESB will raise this capital on the money market as they have in recent years, and continue as an expanding organisation to meet interest repayments from their own resources as they have heretofore.

Mr. Coogan

Can the Minister say where the greatest demand is for this rural electrification?

Mr. B. Lenihan

The present situation is that it is in the more difficult terrain counties—call it that—Mayo, Galway, Cork, Kerry and Wicklow.

Mr. Coogan

Is that the order?

Mr. B. Lenihan

Kerry and west Cork have the greatest leeway to make up. Next would be Galway and Mayo and Wicklow.

Mr. Coogan

In view of the demand in the west I would stress to the Minister that he should give priority to the west.

Mr. B. Lenihan

The Deputy will appreciate that this is simply a matter of terrain. The areas I have mentioned are the most difficult areas in the country from the point of view of terrain. This has caused the leeway in regard to connection. We are going to tackle them now. We are providing the finance and giving the ESB the means to tackle them.

Mr. Coogan

Bearing in mind the economy, and tourism in the area.

Mr. B. Lenihan

I appreciate that.

Question put and agreed to.

Agreed to take remaining Stages today.