Electricity (Supply) (Amendment) Bill, 1974: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Callanan

I have a few comments to make on this Bill. We appreciate the extension of the capital expenditure of the ESB from £450 million to £700 million. It is very important for the ESB to expand, but as far as possible, home fuel should be used for the generation of electricity, especially when coal and other fuel is so expensive.

I want to appeal to the Minister particularly on behalf of the people in rural Ireland in connection with the special charge being imposed by the ESB for the supply of electricity in rural areas. Many people from rural Ireland have had to go into the cities and towns or to emigrate to England and America to seek employment. Their one ambition is to return home and settle down. They get a grant to build a house and then they try to get an ESB connection which costs anything from £200 to £600. In the country a person can get a grant of £420 for building a house, and in one case I know of it took more than the grant to connect the house with electricity.

In my constituency we made representations to the ESB to try to have the special charge paid by instalments but the answer was no, that this special charge must be paid down in one sum. There will be further depopulation of the countryside unless there is a subsidy in respect of this special charge. I am not blaming the ESB. It is a non-profit making concern and certain regulations are laid down. Some people were lucky enough to avail of the ESB supply when it was going through their district and they would have got it at a cheaper rate. In other cases, perhaps, the people involved were a man and his wife of 70 or 80 years of age and they were not interested in electricity. It should be our aim not to depopulate the countryside. I am totally against people congregating even in big villages. The youth are better off in the countryside. They can go out to their neighbours and bring in the cows. They will find something to do besides congregating with mischievous thought coming into their minds.

I was not present yesterday when this debate was proceeding. This matter of the special charge may have been referred to and it is not my practice to make repetitious speeches. Therefore, without delaying the House unduly let me say that while I appreciate the necessity for putting money into the ESB, we should do our utmost to utilise native fuel. We should not let multi-national oil companies reap all the benefits. We should have refineries to refine our own oil. That is something the Government should take into consideration immediately. The recent oil crisis was a lesson for us. I appeal to the Minister to ensure that we will never again be caught out as we were in the last oil crisis. We were held up to ransom. We have fuel that can generate electricity. It may be more expensive but we should at least ensure that a shortage of oil will never again have repercussions on our economy.

Finally, I would appeal to the Minister to make some kind of subsidy available to help those in isolated homesteads to connect up with the national grid. People get loans to help them to build their own houses and then find they have to pay anything from £200 to £550—that was highest figure I heard—in order to get electricity laid on. I appeal to the Minister to subsidise these people so that they can enjoy some of the benefits that are so easily available to those living in more densely populated areas.

Minister for Transport and Power (Mr. P. Barry)

This has been quite a long debate on a very important subject, the provision of money for the Electricity Supply Board. I appreciate Deputy Callanan saying he would not repeat what others had said. Last night a number of speakers made the same points. I trust I shall not leave out anyone when I come to deal with these points.

I shall take Deputy Callanan first since he is here. There seems to be a little confusion about this Bill. I do not decide how the money will be spent. The ESB raise the money and they will have to pay the interest on it and repay the loan in time. They decide how the money will be spent.

I have a certain amount of sympathy with the point made by Deputy Callanan. He probably put his finger on the crux of the matter when he said people did not realise that there will be a charge for connecting up houses. They do not budget for this charge. This is unfortunately true. It is not an easy problem where the ESB are concerned or where the consumer is concerned. It has to be remembered that wires, poles, digging trenches and so on all cost money. If the connection is to one house in an isolated area it would seem unfair to ask other electricity consumers elsewhere, or even in the same townland, to pay for something that will benefit another individual. When people are building houses they consider the cost of the furnishing, the cost of laying a path, laying on water and so on, but nearly all seem to think the ESB should come along and provide them free with electricity even though they may be burning 40 watt bulbs in three rooms. Naturally the ESB want to get a return which will repay them for the capital cost of supplying the electricity. That is normal business practice. They are obliged not to lose money. They cannot make a profit. They must balance expenditure with revenue. There must, therefore, be a charge.

A pretty generous subsidy has been provided by successive Governments since rural electrification started in the middle forties. The last phase is costing £18 million of which £10 million has been provided by the Government by way of subsidy. That is quite a considerable subsidy purely for the purpose of bringing electricity to remote rural areas. The rural electrification scheme has been going on now for almost 30 years and when this present phase is completed on 31st March next it is estimated 98 per cent of the houses in the country will be connected to the ESB. Compared with other countries in Europe and elsewhere that is an extremely high figure. From 1st April next only 2 per cent of houses will be without electricity. Now, the further one gets into a scheme like this, the higher the cost of supplying the electricity and supplying the last group will be much more costly. It is cheaper to supply pockets of population than it is to supply individual houses in isolated areas. I have asked the ESB to let me know after 31st March how many will still be without electricity and what the cost will be of connecting them. As I said, only 2 per cent will be without electricity. One can imagine how isolated these houses will be and how much higher the cost of connection will be. It will not be possible to supply in groups or areas as at present. I do not hold out any great hope that we will be able to offer much, if anything, in the way of assistance to these individuals to have them connected.

I fully support Deputy Callanan in his observation that the more people we can keep in rural Ireland the better. We must, however, recognise that it is easier to get older people to remain in rural Ireland than it is to get young people to stay there.

Mr. Callanan

I do not agree. Quite a number want to come back.

Mr. P. Barry

That may be so, but young people like to move away to where there are other young people, to the bright lights and so on. That is not unique. The trend is pretty well recognised universally. Of course, in continental countries the people just do not live in isolated farmhouses; they live in a village and they go out to their farms every day. That system could have certain benefits for us. Apart from the satisfaction one may get from living in the country there is another aspect; it is one on which the Minister for Health is probably better informed than I am. I refer to the loneliness of old people in rural areas living on their own. If they could be made part of a small community in a village it might be better for them and for the whole country. This is a philosophical argument which really has nothing to do with the matter before us. I should like to argue the pros and cons with Deputy Callanan. He has a pin up so we cannot go to the place where I might go, but, perhaps, we can have a cup of tea together some time and talk about it.

In general, I agree with him that the less growth there is in the bigger urban centres of population in the future and the more we can encourage people not to come to Dublin, Cork, Limerick or Waterford looking for work the better. The more we can place work in their way outside these areas the better, even though they may have to travel some distance. There is a stock of houses in rural Ireland which is not available in the cities and towns. They could be occupied. From that point of view I agree with him, but I see tremendous problems because of the psychological pressures we might put on young people to swim against the tide of what their contemporaries are doing. That is one of the problems. This is a long and, I am sure, very interesting argument we could have at some time.

A number of Deputies referred to the necessity for the conservation of energy. Deputy Barrett said that he has been continuously urging the Government to introduce means of conserving energy. He is pushing an open door. The first intimation I gave about a coming shortage of fuel was in last September or October. I am not sure of the exact date, but I was speaking in Limerick at the opening of a new jetty for Shannon Airport. I drew attention to the necessity to be more careful in our use of energy. Almost daily between then and the end of January, I tried to impress on people the necessity, in their own interest, because I saw the price rises coming, for them to conserve energy and to be careful in their use of energy from the point of view of price rises and from the national point of view.

We are faced with tremendous balance of payments bills because the price of oil quadrupled between 1st October last year and 1 January of this year. This will affect all of us and I am continually drawing attention to it. The Department, and the Government generally, through advertisements and through the setting up of committees, in a very positive way have pointed out to industrialists and householders the benefit to their own pockets of conserving energy which is now costing them so much. I am glad to say that we have had some quite dramatic results.

There has been some very favourable comment from industrialists who engaged the services of the Institute for Industrial Research and Standards. The institute told me some months ago that in one very modern factory where they were asked to see was there any other way they could save on their use of fuel, they were able to show that most modern factory a method of saving 10 per cent of their fuel bill. If they could do that in a modern, recently built factory, you can imagine the dramatic effects they could achieve for older, less insulated, institutions where the machinery would not be as efficient as in a modern factory. This has been very successful. We have had very favourable comments from those who engaged the services of the Institute for Industrial Research and Standards. In the sense of what we set out to do, we conducted an effective series of advertisements over the winter having regard to the compliments we received from the Departments and the knowledge we had from various householders and factories and institutions around the country.

Deputy Briscoe said that there seemed to be a contradiction in the fact that we expected a 10 per cent growth rate, whereas there was only a zero growth at the moment. Two things contributed to this zero growth. One was the price, because when people got the bills with these extra fuel charges they immediately set about saving energy. This was a very effective way, although I would deplore it, of bringing home to people the necessity to save energy. The other was the fact that in our campaign to conserve energy the public generally, and industrialists in particular, co-operated with us and we achieved results.

Deputy Callanan, Deputy Barrett and a number of other Deputies referred to the necessity to build more oil refineries. I agree with that. I think we should be independent of imported products, if possible. Building more oil refineries does not remove our dependence on oil, because the crude oil must still be imported. The only long-term answer to diversification is the development of nuclear power and natural gas and any other forms of energy there may be in the Celtic sea, or in the other areas around our coast. These are long term solutions.

Over 12 months ago before the energy crisis was thought of at all, I remember speaking at a council meeting in Brussels and being questioned by journalists. I said that one of the things which appalled me when I took office was our over dependence on oil. I gave it as my opinion at that stage that, as a matter of necessity, we would have to diversify from oil and build a nuclear power station. A decision to set up a nuclear energy board was taken by the Government very shortly after that in the knowledge that we could not continue with a growing 70 per cent dependence on imported oil for our energy sources.

That dependence on oil came in about 14 years. In 1960, we were only 25 per cent dependent on oil for our sources of energy. In 1973, we were 70 per cent dependent, and growing. Before the gas find was made, an obvious alternative was nuclear energy. I was a bit disappointed that some Deputies did not raise the environmental aspect of a nuclear power station. I thought we might have had a useful discussion on that. I recognise that there are people who were at least doubtful about it.

The Nuclear Energy Board is there to oversee the erection of a nuclear power station and to see that it is operated safely. If people understood that the nuclear energy board is their instrument to control a nuclear power station, they might feel less insecure or less afraid of the effects of such a power station. The preferred site is at Carnsore Point in Wexford. Deputy O'Brien and Deputy Haughey, who referred to this aspect of the nuclear power station, are both Dublin men. There is a nuclear power station already in operation at a point nearer to Dublin than the proposed Irish one will be at Carnsore Point. That is the one just outside Holyhead in Wales. Without knowing much—even though this is one of my responsibilities as Minister—about winds or metereological services, I would venture to guess that there is far more east wind than south wind on the east coast of Ireland. I might be wrong there.

Mr. Corish

Say that again.

Mr. P. Barry

There is far more east wind than south wind.

Mr. Corish

That would be right.

Mr. Brennan

I would not agree.

Mr. P. Barry

I should not have introduced it at all because I do not think we should have an argument here as to whether there is more east or south wind. I want to make one other point about the nuclear power station.

Deputy Haughey said he was distressed at the length of time it has taken to get this Bill off the ground. In fact, this is such a big station that, even in 1982, unless we have co-operation through the inter-connector with the North of Ireland, we will not be able to absorb that into our system. We had to grow to a certain level and foresee a certain demand for electricity. If, for some reason, the inter-connector ceased to co-operate, or if the interchange of electricity between North and South ceased, it is doubtful whether we would have one by 1982. At the moment the thinking is that through the inter-connector this station will be available to supply current to the whole island and that, at some future date in the late 1980s, the Northern Ireland Electricity Board will build another one which will also be available. One station coming on top of our generating capacity as it will exist at that stage would not be fully utilised in this part of the country.

Deputy Tunney spoke about the industrial relations in the ESB. Professor Fogarty investigated the whole sphere of industrial relations in the ESB and made certain recommendations. As far as the ESB are concerned, every one of these recommendations has been carried out. I do not think any blame can be laid at the door of the ESB in this regard.

He also spoke about the change in the financial structure of the ESB as recommended in the Fletcher Report. Under the 1927 Act, the ESB are compelled to balance expenditure against revenue in any one year. What Fletcher had in mind was that they should be asked to form as an ordinary commercial concern making profits on the capital invested. This would be a further monitoring of their efficiency. This change will need legislation because it is not incorporated in this Bill. I am merely referring to it en passant. This is a good suggestion which I favour because it may lead to an even more efficient ESB.

I was very pleased to hear a large number of Deputies pay tribute to the ESB. As private individuals we all get annoyed when we see the size of our bills every two months. By and large the ESB is probably the most efficient company here. Our realisation of that fact should be that when we press a switch the light comes on. That is what they are asked to do to foresee the demand for electricity and provide for it. Plans to meet demand must be laid many years before the demand exists. They have successfully done that for the best part of 50 years.

Deputy G. Fitzgerald spoke about the cooling tanks for milk for farmers and the fact that the ESB had not foreseen and catered for them. The Department of Agriculture and Fisheries offered grants to farmers to instal milk cooling tanks. Nobody thought that the existing wiring for the ESB would be sufficient to cater for this demand. Farmers were anxious to avail themselves of these grants and ordered tanks. They were sold by creameries and other agents as a result of dynamic sales promotion programmes. The tanks were installed but nobody thought of asking the ESB to supply the current. That kind of huge influx of orders could not be catered for by the ESB without bringing into commission new staff who could not be trained in the time necessary to do the work. Inevitably a queue built up with which the ESB are now dealing. This happened during the last 18 months.

A very bad storm in the middle of January damaged ESB cables and involved the staff in a lot of extra work. I think this problem was confined to the southern counties. ESB linesmen, officials, and electricians put in very long hours to ensure that the people whose electricity had been cut off because of fallen trees would soon be reconnected. We should remember that this is the type of service the ESB give. People do not throw them bouquets often enough for the number of times they go out of their way to cater for individuals. They are usually attacked as a monolithic bureaucratic, money-grabbing and inefficient industry with no thought for individuals. Anybody who has dealt with them as an individual would not agree with that point of view. The ESB supply an efficient service and, at times, for themselves and their personnel a most inconvenient one, frequently in the middle of the night and in bad weather because that is when lines go down.

I will now deal with bills, the price of electricity and the fuel surcharge which was imposed with the permission of the Government earlier this year. This increase was a direct consequence of the rise in the price of oil by the oil-producing nations of the world. The price of oil increased by over 400 per cent between 1st October last and 1st January. An ESB generator is 70 per cent dependent on oil. This higher cost of the basic raw materials had to be reflected in the price of electricity. There was no way round that. We would be fooling ourselves if we pretended that the Government or the ESB should absorb this increase and it would never reach the pockets of the consumer and tax-payer.

The ESB applied for a price increase in the form of a fuel charge to be put on each bill on the understanding that when oil dropped in price this fuel charge would come down, and, if oil came back to its old level, it would disappear. This is optimistic in the extreme. I do not believe this fuel charge will ever disappear. We may see a change in the price of oil; it may come down marginally. In a few years' time as various other sources of energy are exploited and brought into commission, we may have a surplus oil position again. This may mean the off-loading of oil at cheaper prices, although they will not come back to the level we knew 12 months ago. Even so, I do not think that will come before the late 1980s.

There is a special cut rate for night storage heaters. The ESB must have a generating capacity to meet the highest demand for electricity. This is during the mid-hours of daylight when the factories are working and cooking is being done in houses. The ESB cannot store electricity. Therefore, they must have generating capacity to meet this demand. If they have generating capacity for the peak demand they will have spare capacity during the night. This is the principle on which the Turlough Hill station is operated. When electricity is not used during the night by the consumer it is used to pump water to the reservoir and this is used to generate electricity at the peak time.

Another method of using spare capacity, thus taking the pressure from the peak demand period, was to encourage people to use electricity at night-time by way of storage heaters and the ESB offered the electricity at the basic cost of production. When the fuel surcharge was introduced early in the year that price could not be reduced. The only addition was the extra charge on the oil. That amount was added in equal proportions because the cost for the oil used at night-time was the same as that used during the peak demand. The cost of night storage oil is still considerably lower than the cost of oil used during the day but it is regrettable that the relationship between the two cannot be maintained. Prior to the fuel crisis, the price of electricity was at basic cost. If it is reduced people using electricity during the day time will be asked to subsidise those who use electricity at night-time and I do not think Deputies would consider that equitable.

Some Deputies pointed out that the snag about the accounting system of the ESB was that people found it difficult to get together the money for the two-monthly bill. The ESB will accept monthly payments and they will send out monthly bills. The savings stamp scheme introduced by the ESB was not too successful in the beginning but I think this is changing and it is considered much more attractive now. If people can estimate their weekly or monthly requirements they can buy stamps in the ESB office which will go towards the bill. This scheme should prove attractive to people who do not wish to have to pay a two-monthly bill.

Deputy Murphy in a supplementary question to me today referred to two housing estates that were electrically centrally heated and there was mention also of an estate at Corrib Park, Galway. The ESB have said that in many houses heated by electricity the system is not being used in the most economical way. They are willing to send an engineer or a qualified person to show the householder how the system should be used and also an accountant to explain the bill to him. If the heating system is set at a high temperature, is left on day and night, and if windows are left open, it will be an extremely expensive form of heating but its use can be conserved and if people use the system intelligently they will have a satisfactory form of heating and at a price no more expensive than that charged for other forms of heating.

Deputy Briscoe was incorrect in a point he made yesterday when he said this country was more dependent on oil than any other country——

Mr. Briscoe

No, I said we were fortunate we were less dependent on oil than many other European countries.

Mr. P. Barry

That is correct, although we are more dependent than Britain which is only 40 per cent dependent on oil. Deputy Brugha asked a number of questions and I should like to answer them. He referred to the Fletcher Report on the ESB. That report had a high opinion of the standards of the ESB and they approved 100 per cent of the planning generally. The Deputy asked the comparable cost factors with other electricity undertakings. It is virtually impossible to make this comparison; one would want to get an undertaking of the same size, with the same spread and the same composition of generating factors. We believe that electricity in Ireland is cheaper than practically every country in Europe—possibly with the exception of the United Kingdom where they pay a subsidy. Apart from that subsidy and taking cost for cost, we believe that electricity in Ireland is cheap by European standards; however, we cannot prove this because comparison is practically impossible.

Deputy Brugha asked about the co-ordination of planning with other energy suppliers. From the domestic point of view the other energy supplier is what is known as town gas and the number of places where this is available is limited. There is co-operation between the Dublin Gas Company and the ESB although this is of a limited nature because the ESB must supply the current and the gas company are not in that position. I should like to see more co-operation between the two undertakings because if the position ever arises—probably it is many years ahead—where we could pump natural gas through the gas undertakings in the country it would be desirable to have as many as possible of domestic appliances in Dublin in particular connected with gas. This would lessen our dependence on imported oil, which is the overall policy of the Government.

Deputy Brugha asked about the borrowings abroad by the ESB to date. On 31st March, 1974, the sum involved was £34 million and this represents about 16 per cent of the total debt still outstanding. The Deputy wanted to review the costs of Turlough Hill. I have here some figures of comparison between old and new stations and the difference in costs. Last year at the Marina the cost of a unit of electricity was .289p per unit as against Poolbeg which was .174p per unit. Since the oil crisis the Marina has increased to .9p per unit produced, and Poolbeg is .6p. The cost of producing at Poolbeg is only two-thirds the cost of producing at the Marina.

Somebody made the point— Deputy Fitzpatrick or Deputy Dowling; I am not sure which— about the check of wiring in houses. In fact the ESB have no power to do this. They inspect new installations merely as part of their service. There is a body called the Electro Technical Committee of Ireland operating under the aegis of the Institute for Industrial Research and Standards, which is pressing for legislation which will give them power to arrange for such inspections and certification of installations. Again, whoever it was made this point yesterday pointed out also that much of the wiring in Ireland is fairly old, and that it would be desirable to have it checked.