Ceisteanna — Questions. Oral Answers. - Industrial Electricity Costs.


asked the Minister for Energy if he is aware that average Irish industrial electricity costs are still some 20 per cent higher, and 40 per cent higher for some industries, than our EC competitors despite a recent reduction; and the plans he has to narrow the gap further as a result of the collapse of oil prices and falling currencies such as the US dollar and sterling.

I am informed by the ESB that the gap between Irish and European industrial electricity prices has narrowed significantly. Since the report of the Inquiry into Electricity Prices was published in January 1985, industrial electricity prices in Ireland have been reduced by an average of over 12 per cent. For certain industrial users the reductions were up to 20 per cent.

As I indicated last week in the course of the debate on a Private Members' motion relating to this matter, the full savings accruing to the ESB from the factors referred to by the Deputy are being passed on to electricity consumers. Any opportunity for further reductions which may arise from favourable trends in costs will, of course, be availed of.

I understand that the fuel input cost into electricity generation is approximately 20 per cent, and the gas fuel input represents about 50 per cent. Will the Minister agree that the two factors governing the world price of oil — the price of crude which is at the same level as it was before the 1973-74 oil crisis and the depreciation of the dollar which in recent years has been by as much as 30 per cent — represent a very substantial fall in the price of oil to the ESB? Will he not accept that it is time that more generous saving were passed on and not alone to the industrial consumer? Every day we hear calls from the Government to be more competitive. It is time that the Government were competitive where they can be competitive in passing on the benefits of falling oil prices to the industrial user and the domestic consumer.

As I said in the debate in this House less than two weeks ago, I am satisfied that the savings from oil price reductions are being passed on to the consumer. Also we must bear in mind the fact that less than 20 per cent of the ESB's electricity generation is derived from oil. I have said to the Deputy, and publicity since the debate, that if scope or opportunity arises for further reductions they will be availed of, but at present the decision of the ESB is that this is as far as they can go.

Will the Minister accept from me also that the fuel input cost to the ESB in relation to natural gas represents 50 per cent, and that this is an area where the Government have their own ways and means of reducing the price of electricity if they so wish? Will he agree that it is time he took a lead in this area? Many industries are coming under extreme pressure in the international market because of the recent alignment of currencies, and this is a way in which a contribution can be made to making them more competitive. Will the Government consider reducing their pricing of natural gas to the ESB so that a significant reduction of ESB prices could come about?

Yes, I accept what the Deputy is saying. The question of reducing the price of natural gas to the ESB to reflect market reality is under consideration and we should have an early decision on that.

A final supplementary. Will the Minister agree, therefore, that we can expect more reductions in electricity prices during the next three, four or six months?

I have answered and made statements on that at least five times in the past two weeks and the position has not changed. If a more favourable position occurs then obviously we will have further price reductions.

Has the Minister had representations from the CIF concerning job losses in industry because of high industrial prices?

I am fairly certain that I have received correspondence from the CIF at regular intervals over the past three and a half years. We should be aware of the healthy trends also. When the inquiry into electricity prices took place there was a gap, a difference of 20 to 30 per cent more expensive for industrial users. We have narrowed that gap significantly since that time and my intention is to try to narrow it further still to make sure that we can be as competitive as possible.

What is the gap?

We are talking about a range of around 20 to 24 per cent. It was much higher than that. The trend is favourable from the Irish economy's point of view and we hope to continue to keep it going in that direction.

Deputy Sheehan, and this is the final question.

Can the Minister explain the long delay of the ESB in reducing the price of electricity units to the consumer? It will take until September. On the other hand when the price of oil went up the higher charges were levied on the consumer immediately.

We voted on that last week.

He did not know. He voted the other way.