Vol. 261 No. 4
asked the Minister for Transport and Power why the Government sanctioned the rise of between 8½ per cent and 10 per cent in electricity charges; the length of the interim period mentioned by the board; and the extent of any further proposed increases in electricity charges.
23.
asked the Minister for Transport and Power if he is satisfied that the increases in electricity charges were warranted; and that such increases will not cause any undue hardship to any section of the community.
24.
asked the Minister for Transport and Power whether he has received the report of the committee of inquiry into the ESB; and, if so, what action he proposes to take regarding the recommendations of the committee.
25.
asked the Minister for Transport and Power whether he will ask the ESB to postpone the new ESB charges until the Government have considered and acted upon the report of the committee of inquiry into the ESB.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 22, 23, 24 and 25 together.
The ESB are required by statute so to fix their charges that, by taking one year with another, revenue balances outgoings. In pursuance of this statutory requirement, the board sought permission to increase charges from 1st January last by 10 per cent. This application was referred to the National Prices Commission for examination and recommendation. The commission deferred a recommendation pending receipt of the Report of the ESB Investigation Committee (the Fletcher Committee).Due mainly to the delay, the ESB found it necessary on 1st April, 1972, to amend their application to one for an increase in charges of 15 per cent.
The Fletcher Committee recently reported to me and copies of their report were placed in the Oireachtas Library on 24th May. The report will be published shortly. The committee recommended an immediate increase of 10 per cent together with a price variation clause to be introduced as soon as possible which would reflect variations in a number of ESB cost elements such as fuel, payroll and capital charges. The report has also made a number of other recommendations related to the financing and operations of the ESB which are being urgently examined by the ESB and the Departments concerned.
The National Prices Commission have recommended an increase of 9 per cent on charges pending consideration and possible implementation of the recommendations of the Fletcher Committee.
The Report of the National Prices Commission for the month of May which I understand is due for publication on 1st June will explain fully the basis of the commission's recommendation.
In the circumstances, the Government approved an interim increase sufficient to bring in an additional 9 per cent in revenue, the situation to be reviewed as soon as possible in the light of the scope for cost reductions arising out of the recommendations of the Fletcher Committee. The recommendations of both the Fletcher Committee and the National Prices commission envisage alterations in the ESB's statutory obligations and the 9 per cent interim increase will not be sufficient to enable the board to balance revenue against expenditure in the current year or to meet any part of the deficit incurred to date.
The National Prices Commission have no doubt taken into account the extent to which increased charges might cause any undue hardship; the ESB have pointed out, in this connection, that the average increase per consumer should be of the order of only 5p per week. The recommendations of the Fletcher Committee cover a number of complex matters which will require very thorough consideration by the ESB and by the Government. I do not propose to ask the ESB to postpone the application of the interim increase now approved, which, in fact, is not adequate to meet the board's current level of expenditure.
May I ask the Minister the total extra revenue that will accrue from the increase?
It will be of the order of £3 million. It is not enough to meet the deficit.
In deciding on that figure, the ESB must have known the revenue that will be brought in?
I said that it would be of the order of £3 million.
Is the Minister aware that it is about 12 months since he decided to set up a special committee of inquiry into the ESB?
That is the Fletcher Committee.
Would it not have been more in the public interest if the recommendations and the report of this committee had been made public before permission was given to the ESB to increase their charges?
That report is now in the Dáil Library. It is available to Deputies. At the moment it is with the printers for publication for the general public.
The Minister will agree that it is a very complex report which would call for time and study? Would he not have considered it more important to postpone the increase in order to allow consideration and study of this very complex report?
Not where there was a continuing loss situation being borne by the ESB. This would only have considered and acted upon the and when an eventual decision had to be made it would have resulted in a higher increase.
Were there any recommendations or clauses calling for improved rationalisation or anything similar in the ESB?
The report is mainly concerned with the financial structure of the ESB, and how that board can reorganise their financial structure.
Were there any suggestions or recommendations as to how they could prevent increases?
The committee, as an interim measure, undertook for me the study of this increase which the ESB sought and they recommended an increase of 10 per cent. We agreed to the National Price Commission recommendation of 9 per cent in the interests of keeping down prices and securing agreement in regard to the proposed national pay agreement.
Was there no way of giving anything in the way of extra subsidy for consumers most in need?
The Deputy is talking about subsidisation. We do not want to put the ESB into that sort of deep water.
Would the Minister agree that it might be desirable when the report is made public, in view of the fact that the ESB have announced that they will be seeking other increases to provide an opportunity to the House to discuss and debate the report?
Certainly. The report is now in the Library. I hope to have it published in a week or two. It is up to the Deputies to put down any motion they like for debate.
In view of the fact that the Minister says 9 per cent will not cover the need for extra funds in the ESB can we look on it as being an interim increase? Is there another increase in the pipeline?
I said so in my reply. I have been quite forthright in my reply in saying that this increase of 9 per cent will still leave the ESB with a deficit situation at the end of this financial year.
Have the Government got any help from all these inquiries into the ESB's affairs? This is about the tenth inquiry. May I ask the Minister if the Government got any help whatever from all the inquiries into the ESB's affairs?
Yes. The McKinsey investigation recommended considerable improvements in the management structure which have been adopted. This report is largely concerned with the financial structure of the ESB with a view to changing the contingency provisions.
Did the McKinsey report improve the ESB?
It did, indeed.
Would the Minister agree that the ESB are following the same road as CIE have followed for a number of years? They are increasing their prices from year to year until they will price themselves out. Would the Minister not suggest to the ESB that they might follow the example of CIE and cut their prices? They might sell more electricity and, consequently, help to solve their problems.
The problem with the ESB is the very reverse. They have an exceptionally high demand for electric power. The growth in demand is running at about 12 per cent per annum. We would like the ESB to dampen down that demand.
Would the Minister not agree that when a situation like this obtains in the ESB, and which we have had in CIE and possibly will have in Aer Lingus, the time is now ripe for the establishment of a special parliamentary committee which could examine the operations of the various State bodies? It is impossible at Question Time to get the real picture from the point of view of the public. The Minister expressed himself in favour of parliamentary committees some time ago. Has any progress been made in that direction?
This is all connected with the Devlin Report. That is being looked after at the moment by my colleague, the Minister for Finance.
The situation is unsatisfactory.
