Vol. 507 No. 2
12 Mr. Yates asked the Minister for Public Enterprise if she will ensure that there will be no price increase for domestic consumers of electricity for the foreseeable future following the publication of the ESB annual report and accounts; the applications she has received from the ESB for tariff increases for domestic and commercial customers; and her response in this regard. [16298/99]
I have no application from ESB at this time for a price increase for domestic consumers of electricity. At a press conference held on 25 May 1999 to announce its results for 1998, which were splendid, the ESB confirmed in response to questions that it would not pursue a proposed 3 per cent price increase. Future price increases will be a matter for the new Commission for Electricity Regulation.
The ESB implemented price increases averaging 2 per cent in 1996 and 1.5 per cent in 1997. A 3 per cent price increase for 1998 has not been implemented. The ESB wanted to apply this 3 per cent average increase by way of a 5.25 per cent increase for domestic customers and below 3 per cent for the commercial and industrial sector.
The Government at its meeting on 12 May 1998 decided that there was no justification for this increase in light of the very strong financial performance of the ESB. The ESB has estimated that domestic customers are currently being undercharged while industrial and commercial customers are being overcharged. As ESB faces competition in the future, it is necessary to ensure that there is a level playing field for all industry players.
In relation to the new regulatory environment for the electricity market, will it be open to the ESB to apply for tariff rebalancing, which it informed the Oireachtas committee it wishes to do? It wishes to raise domestic charges by £16 million to cheapen charges in the competitive market for large customers. What steps will the Minister take to ensure that domestic customers will not have to pay more so that large multinationals will get cheap electricity?
Before I came into office the previous Government had put in place a 3 per cent—
This is tariff rebalancing, which is a separate issue.
It can apply for what it wishes but what it will get is another matter. Obviously, if a company is to apply to a regulator, it can apply for whatever it wants, but what the regulator will give is another matter and I will have no control over it. The putative regulator is well aware of my belief that companies which are making £200 million per year should not be skinning the consumer.
The Minister is deftly washing her hands of this matter and passing it to the regulator. As the shareholder in this company, will the Minister give a commitment that domestic customers will not be subject to tariff rebalancing?
Two years ago the Deputy was a member of a Government which agreed to it—
That is a general issue. The Minister should deal with tariff rebalancing.
The Deputy should allow the Minister to reply without interruption.
I cannot give orders to the regulator. An electricity regulation Bill is currently before the House. Any company may apply to the regulator, Thomas Reeves, for whatever it wishes and he will deal with the application. At that point, or prior to it, he will be aware of my policy on those matters.
Will the Minister agree that she or any other Minister will never again sanction a price increase for electricity for either domestic or commercial users?
Never again?
Yes. That power is being passed from this House, from the Minister to the regulator. Never again can she sanction an increase.
Yes.
Does the Minister agree that the ESB has done a good job compared with its nearest competitor? Northern Ireland Electric charges its domestic and commercial customers 18 per cent and 16.7 per cent more, respectively, than the ESB charges its customers in the South. Does the Minister agree that the ESB should be complimented on providing energy at this low price in the Republic?
The varying points of view from both sides in the Opposition are interesting. ESB prices to the consumer and industry are much lower than electricity prices in any other European country. That is written in the Eurobarometer Survey. Its prices are particularly lower than prices in Northern Ireland. That indicates a good operating technique.
Public monopolies work well.
The Minister referred to the regulator and what he or she might do.
It is a he.
What is the Minister's attitude to the cross-subsidisation of charges for consumers, rather than the commercial end?
My attitude was expressed when I did not wish to see a price increase, and the Government refused one. I thought a company that was making up to £200 million a year could do without a price increase.
