Vol. 541 No. 5
176 Mr. Perry asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans she has for medium sized companies which will be severely affected by the 19% electricity price increase announced by the regulator; if her attention has been drawn to the fact that many companies will be forced to cut jobs; and if she will make a statement on the matter. [23361/01]
The recently announced increases in the price of electricity were approved by the Commission for Electricity Regulation, which operates under the aegis of the Department of Public Enterprise. The likely effect of such increases on Irish companies would have been one of the factors taken into account by the commission in reaching its decision.
In fact, the result of the commission's review is an 8.6% increase in the average price of electricity. The percentage increases for the different categories of business customers are as follows: small businesses – 3%, medium sized businesses – 13% and large businesses – 14%. In addition "eligible" customers can choose to have their electricity supplied to them by ESB in its capacity as public electricity supplier or by one of the licensed independent electricity suppliers. It is expected that with effect from February 2002, electricity market opening will increase to 40% and approximately 1,600 customers, whose annual consumption is at least 1 GWh, will be free to choose their electricity supplier. The independent power producers will provide eligible customers with the opportunity to negotiate improved prices and, when new efficient power plants are constructed, such customers will have the opportunity to source even more competitively priced electricity in the open market.
It must be accepted, in general, that Ireland currently has a shortage of electricity generation capacity and that there is an urgent need for investment in transmission and distribution capacity. The price of electricity must reflect the economic cost of production and distribution in addition to impact on categories of consumers. If prices were maintained at their present non-cost reflective levels, then, as happened in California, new generators would not enter the market resulting in serious capacity concerns.
