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Seanad Éireann debate -
Wednesday, 14 May 1930

Vol. 13 No. 20

Marketing of Irish Butter. - Report and Accounts of Electricity Supply Board.

I move:—

That in the opinion of the Seanad the report and accounts of the Electricity Supply Board should be expanded and clarified.

The motion is for the purpose of calling attention to the report of the accounts of the Electricity Supply Board, to ask for certain further information and, within its terms, obtain from the Seanad their opinion on these accounts. In their present form, the report and the accounts are not sufficiently elucidated. As the House knows, it was the policy of the Government, which it endorsed by legislation, to free the Electricity Supply Board from any form of direct Parliamentary control. The Board was not to be similar to the Post Office or other Government Departments on whose administration questions could be raised in the House from day to day. The Minister did suggest, however, in the early debates, that it might be possible, although he was not an enthusiast on the subject, to have the reports debated once a year. I think it is only reasonable when large sums of money are being expended that the House should have some formal occasion on which they can make a criticism of the accounts and ask for information.

I quite frankly admit to the House that my motion is of a somewhat protective character and rather an anticipation of financial criticism, that it will be possible to prevent criticism later on, because in its present form the operations of the Board are only brought up to 31st March, 1929. The operations of the Board have not been very extensive so far, and the amount of money spent has been comparatively small. The next report will, however, show wider activities and very much larger sums of money, running into millions of pounds, I imagine. If the report and accounts for next year are in their present form, or if the present form is more or less the structure, the scaffolding, on which future reports are to be based, I would suggest they are inadequate. I ask the House to agree with me that they are inadequate and that they will not give the House the information that they have the right to expect. In one respect I would suggest that the present report is inadequate, and I would like a ruling on this point. I admit that the matter on which I am going to comment, to a certain extent, has occurred subsequent to the report. That is in respect of permitted undertakings. These permitted undertakings have been within the cognisance of the Electricity Supply Board all along. Latterly developments have taken place of which the House should be made aware. It is aware that considerable dissatisfaction has been felt by the permitted undertakings at the treatment they have received, and that at a certain stage—I cannot tell the date——

Could the Senator say if it was after 31st March, 1929?

I do not want to be accused of any lack of candour. It was after 31st March.

Cathaoirleach

Then we cannot deal with it.

May I suggest to the Senator that I want to get as much publicity as possible both for the accounts and the reports of the Board? If the Senator is asking that the report should be expanded and clarified, I submit, sir, that he might move that in any account or any report to be rendered for the operations of the Board for the period ending on 31st March, 1930, certain things should appear profitably, but the Senator will have to avoid criticising matters that are more or less subject to decision by the Board and the Permitted Undertakers Association at the moment.

If the Minister does not want that matter discussed I will not do so. I am perfectly free to raise that special point by motion at any time. The Minister knows what I am referring to. It is a matter of considerable importance. Another point on which the report is unilluminating is on the matter of rates—the responsibility of the Board in the matter of rates. Certain developments have taken place since the report. They are not of the same delicate nature as the matter already mentioned, and they arise out of the auditor's certificate. Can the report definitely say that any provision has been made for the payment of rates applicable to property in the occupation of the Electricity Supply Board? As the Minister knows, there have been certain questions in the Dáil on that matter. There was, I submit, a reply amounting to an admission that certain properties in the occupation of the Board were liable for rates, and early legislation was promised to settle the matter, but no legislation has been introduced, and certain public authorities think it very wrong that they did not receive the rates or something representing rates on the property that had been acquired by the Board.

It is the same in regard to income tax. That is again a point on which no reference has been made. I do not want to pursue the matter although by implication the Minister for Finance suggested that the profits of the Electricity Supply Board would be liable to taxation. In the matter of statistics, I admit quite readily that possibly there would not be much use in statistics unless they were accompanied by a report of similar undertakings in other countries. I have studied the report of the Electricity Commission in Victoria, in South Africa, and also in Ontario.

I hope the Minister will agree that there should be from next year onwards a table giving the statistics that are usually given by large electrical undertakings. I am not prepared to say what precise form these statistics should take, but they should give the number of units generated, the net output, the efficient transmission power and so on. They would be of interest to the electrical profession and to the general public.

Turning to the accounts, I have referred to the auditor's certificate, where he mentions that no provision has been made for rates. I would also draw the attention of the House to this item, "The amount shown due to sundry creditors for materials purchased, constructional work carried out, and expenses incurred, has not been fully vouched by us, due to the fact that statements in verification of some of the amounts shown due in the books to creditors were not available." It is hard to say what lies behind the auditor's qualification. Of course when auditors qualify a statement they generally do not put in a note like that without having made every effort to get information. That is the ordinary practice. Auditors only put in notes after failing to receive information which they consider they were entitled to.

Turning to the accounts themselves I do not know if many members have copies of the report in their hands. I have nothing to say on the revenue account. I hope in future that these items for generation costs and distribution costs will be sub-divided to show what proportion are salaries and what proportion are materials and overhead charges. At the moment I need not be precise, but certainly it will not be satisfactory later on if there is merely one item for generation costs without sub-division. The item interest on loans is a specially important one on which I suggest even now more information might be given. Interest on loans is shown as the comparatively small item of £1,300 and yet during that period advances were made to the Board by the Minister for Finance to the extent of a quarter of a million. I suppose the explanation is this sum of a quarter of a million may have been in the hands of the Supply Board only for a very short time, and that the interest might be a comparatively small sum. Another explanation might be —and probably is—that the interest is charged to capital. If so, I would suggest that it should appear definitely as such. It could be charged to the capital account as a sum representing interest, or it might be brought into the revenue account on one side, and shown as a payment out on the other side. One is not a purist in the form that these things take as long as they are clear. There are many ways of giving information. It is reasonable to ask that the account should be full and explicit.

With regard to the two items on the credit side of the capital account, I would suggest to the Minister that further information is due to the House. A sum of £275,000 is shown as received from the Minister for Finance as advances under Section 12 of the Electricity Supply Act of 1927. Under that section, advances are dealt with under two sub-sections. On sub-section (2), £600,000 is to be advanced to the Supply Board to meet interest on maintenance during the period of construction. I would suggest receipts in this respect should in future be shown separately and designated as sums advanced under Section 12 (2). Sub-section (3) states that a sum of £2,500,000 will be, in course of time, paid to the Electricity Supply Board or be advanced for the purposes of distribution and construction. I suggest that that item should also be shown separately. In the same way I suggest that any expenditure against the £600,000 or on the £2,500,000 be shown separately in the capital account, and, if revenue, in the revenue account. In the present case the matter is less important, as the sums are small; but next year, if we have not the information, it will be difficult to trace the financial operations of the Board. I am not bringing this motion forward in any spirit of provocation. I am sure we all wish that this information should be clear to laymen, and not merely to expert accountants.

I would like to call attention to one matter in the balance sheet. A small sum is provided this year for the redemption of loans. I have examined the manner in which such provision is treated in certain other electricity supply accounts, and in all cases the money set aside for redemption is invested in liquid securities. I have the accounts of the South African Electricity Supply Board here, and provision is made on the liability side for repayment of borrowed money, to the extent of £189,000, and on the other side is set out the exact security in which that sum is invested. There is a danger, I suggest, that moneys like that may be set aside and put back into the business, and not kept liquid, which I suggest is not good finance. It is money definitely due for repayment; it should be kept liquid, and the nature of the security should be shown. I also suggest that the operation dealing with the sale of appliances ought to be kept separate, so that one could see what progress, if any, resulted from that activity. These are the points I wish to make, and I hope that, as far as they can, they will be embodied in the accounts now due and which I suggest might be issued rather sooner than January. It should be possible to issue the account at least within six months. The present accounts were not issued until January, nine months after the date of closing.

I second.

Is this Report circulated? I have not received a copy of it.

I do not think so. It was laid on the Table, and it is possible to requisition and obtain a copy of it. That is an illustration of the desirability that the Seanad should reconsider its decision not to appoint a committee to deal with these matters. The suggestions that I have to make are quite in keeping with those made by Senator Sir John Keane, particularly with regard to the amplification of the accounts. I cannot speak as a technical accountant, but I have in my hand a copy of the Dublin Electricity Supply accounts. These seem to be in the same form, with slight modifications, as those of the Pembroke Urban Council and Rathmines Urban Council electricity accounts. They may be in conformity with some Board of Trade regulations, or perhaps a statutory form, I am not sure. The Dublin Electricity Supply accounts are very much fuller and should be, I think, a model for future reports rather than that this Report should be taken as a model. For instance, we have under the heading of capital account in the Electricity Supply Board's Report the item, constructional work, £140,000. Under what might be said to be a similar heading, there are numerous items in the Dublin account. We have in the loans account of the Dublin undertaking ten separate items, for machinery, professional services, printing and stationery, legal expenses, etc. That is given as an illustration of the difference between the single item in the accounts before us, and the information that is supplied to the citizens of Dublin. In the Dublin account one has an appendix, and an analysis of the electricity accounts for the year, and for the previous year, showing the financial state, and giving technical records showing the units sold under the various heads for light, heat and power, at domestic valuation rate, and full bulk supply rate; for supplies inside the city boundary; the cost of public lighting, the cost per unit for coal and other expenses of generation and distribution as well as interest.

Averages are given, and these, I think, are given in the Municipal Journal in the reports on the Electricity Supply undertakings. The average price obtained for current for private supply and public light, as well as the total, is given, and the price per meter, cooker rents, etc. The information that was supplied to the citizens of Dublin by the Corporation was very full, and one could get an insight into the financial position of the undertaking. That is not the case in this Report. As Senator Sir John Keane pointed out, the auditor's report contains certain reservations. For instance, it says "all head office expenses have been capitalised. No portion of the sum being charged against revenue." That would strike one as not being satisfactory, because if there is any revenue, some of the head offices expenses should be charged against that as part of the necessary expenditure. Special attention ought to be devoted to that.

One might call attention to the commercial accounts of the Department of Posts and Telegraphs. If it were objected that the Corporation was not a right example, the Department of Posts and Telegraphs commercial accounts are very much more detailed than anything contained in the accounts now before us. Then we deal with the Report itself. I do not know whether this is the kind of report which is to be given in future, but I hope that it will be the policy of the Board in view of their special position in relation to the State, that as full information as possible as to policy should be given, as well as to current events. I draw attention to paragraph 34 on page 14:—

In approaching the problem of tariffs the Board felt that it should keep in mind two fundamental principles, the first one being that the rates of charge should be such as to make it possible for the maximum number of consumers who utilised to the fullest degree the abundant supply of electricity for all purposes which the hydro-electric development of the River Shannon and the building of the national network placed at their disposal, and the second, that the rates of charge for electricity to be utilised for each particular purpose should be such as to correspond as closely as possible to the cost of supplying it for that purpose.

They go on to explain how they have endeavoured to fit in the rates to be charged in respect of the different services in different districts, and the costs of supplying these districts. That raises again a big question of policy in respect to the electricity supply of the country. The charges for local purposes are going to be allocated according to the cost of particular services. There is very little in the Report about the cost of power, but I am calling attention to the phrase, that the tariffs should be such as to correspond as close as possible to the cost of supplying for the particular purpose. Recently contracts have been made according to public announcements with large consumers, and one might presume that the policy announced here will determine the general action of the Board, and that these consumers will be charged according to the cost of supply for the particular purpose. I wonder whether this is the method of fixing costs to the consumer in the case of a large consumer, or whether any other principle obtains when a bargain is struck. One cannot but take note of the possibility that under the powers of the Board they may by variation of costs completely change the economic activity of the country in general. That is to say, certain contracts have been made for power, let us say, with the Dublin Tramway and Ford's of Cork. One can visualise the possibility that some company will seek to make a bargain with the Electricity Supply Board to get power at a very cheap rate for manufacturing purposes. I think that is quite feasible and not at all an unreasonable expectation. The policy of the Board ought to be made known in that respect.

Cathaoirleach

You wish to suggest that the policy of the Board should be adumbrated in the accounts on every occasion? We are now dealing with the form of the accounts and not with policy.

We are dealing with the Report, and the Report announces the policy of the Board with regard to tariffs, that is, prices.

Not at all.

You have quoted prices for power:—"Determination of charges for electricity purposes should receive priority." Nevertheless, in the appendix the prices are quoted in respect of power, minor power perhaps, but I am making the suggestion that there should be made known to the Oireachtas the principle of policy in regard to power for bulk and industrial purposes. I will not enlarge upon that, because the opportunity may again arise for dealing with the subject, but I am pleading for the fullest possible information to be contained in these reports on account of the very peculiar circumstances under which the Board work, the tremendous power they have, and the very limited amount of criticism that is allowed of a public kind. The Report is signed by J.J. Murphy, Chairman; T.A. McLaughlin, Managing Director; P.J. Egan, J.C. Foley, H. Kennedy, J. Fay, J. Leydon and P.J. Dempsey, Secretary. Messrs. Fay and Leydon, although not members of the Board in the period covered by the Report, were members on the date of the signing of the Report. I think that fact justifies me in asking for some statement of policy in regard to the appointment of civil servants, and in asking that the Oireachtas be made aware of the position in regard to the changes that have occurred in the composition of the Board.

There is only one point to which I want to refer, and it has some reference to what Senator Johnson has said. Some time ago I suggested to the Minister that the Electricity Supply Board should have a flat rate throughout the Free State. In my opinion that could have been done. The money that has been spent on this scheme is national money and it is a national question, and one part of Ireland should be supplied as well as any other part—the west as well as the east. I pointed out that I was not referring to supplies to particular houses but to villages and towns, and the Minister agreed with me that that ought to be the case. I do not know whether he tied himself down that that would be the case, but he agreed that it would be the better policy to pursue, though that policy is not being carried out. The Electricity Supply Board are making bargains here and there according to the strength of the people they have to meet, and strong measures are taken to compel people to come to an agreement. I do not think that that is the proper way to proceed.

The terms of this motion are necessarily limited, and for that reason it is difficult to get in some of the points one would want information on. I would like the Minister to say if he has any knowledge of the fact that the Board have changed their schedule of terms as originally published for the wiring of premises. For instance, on page 56 of the report there is a scale of charges laid down for a certain district—Booterstown, Blackrock, Monkstown, Dalkey, Terenure, Kimmage and Rathfarnham. It is laid down that private houses shall be wired on a hire-purchase system, the special rates being charged where valuation of the house is less than £8, and that these shall be weekly payments of 6d. per week until a maximum of 60 payments per outlet has been made, and one shilling per week where the valuation of the house is £8 or over, but less than £18, this weekly payment to continue until a maximum of 30 payments per outlet has been made, and so on. That is not being acted on.

I will give an instance. Recently the Blackrock Urban Council had a small housing scheme which dealt with 35 houses. For some reason these houses were not wired for the purpose of electricity supply or arrangements made for the supply of gas by the contractor. The majority of the tenants of these houses are poor people, and when they went into possession they asked the Electricity Supply Board for their terms. One of the tenants of these houses showed me the terms at which these houses would be wired. The charge came to a total of £6 18s. 6d. for six outlets, the total amount to be paid within a period of six months. The valuation of that house would be about £10, so that the most he would have to pay would be 1/- per week under the published scale of charges until such time as he had paid the cost of the wiring, but the Board would not do that for him, and said he would have to pay the £6 18s. 6d. within six months. The Gas Company gave him six outlets for six shillings for gas lighting purposes, and in addition inserted a gas stove free of charge. They also gave him a gas fire for which he could pay the Gas Company any way it suited him. The result is that a number of these people are using gas because of the superior enterprise of the Gas Company. I suggest that unless better terms are offered by the Electricity Supply Board that wherever an enterprising company like the Dublin Gas Company is available electricity is not going to be taken. It is very necessary the scale of charges issued shall be adhered to, and that there shall not be this mysterious changing and chopping about as experienced in Blackrock. There is no minimum fixed as to the number of outlets a person may ask to have installed. It is simply laid down that there shall be an instalment rate on a fixed schedule with regard to any number of outlets he may have inserted in his house provided his valuation is less than £28. The same competition may not occur in districts outside of Dublin, but certainly in Dublin it is most important as far as the electricity consumption is concerned, or the Gas Company is going to drive out the Electricity Board in every instance, such as that quoted.

I take it that we are discussing figures. In the next report most of us would like to see a profit and loss account, as well as what Senator O'Farrell has talked about. Rates are laid down at which the Electricity Supply Board are going to supply current and wire houses. We have no figures or facts of any description as to whether the Board are making or losing money. The Board are competing with private contractors, and we ought to know whether they are making or losing money. They could, I think, quite easily give us figures which would show the cost of wiring, to a certain extent, of any number of houses, or any particular house. That should be public knowledge, as otherwise there are two things of which the Board might be accused. One is that they are making too much money out of people, and the other, that they are selling the current at a cost which will eventually mean a charge on the taxpayers. That could be met by giving figures as to the cost of wiring, stating that the cost of wiring is so much and we charge so much. It is a big public affair and we ought to know the figures connected with it. They have taken over the Dublin area. Formerly we knew what rate the Dublin citizens were paying, and we knew what the debt of the city was. I believe at that period it was about half a million, and we know that the Electricity Department were contributing to the relief of the rates of the city. We have no figures to show how the new arrangement of the Electricity Supply Board affect the citizens. I believe there has been a reduction of rates, but we should have a profit and loss account showing how the citizens stand under the new arrangement as compared with the old, and whether under the rates now charged the citizens are in any better position. The figures, as I have said, are a mystery.

Looking through the report to find out how the citizens stand, there is nothing in it to show how the change has affected the citizens of Dublin. It may be that Dublin has not got as much advantage out of the transfer as it ought to, and it may be that Dublin was better off than under the old conditions. Until we get the figures we cannot tell. I think the Board should give the figures and enable everybody to see how the matter is carried out. We also should have figures with regard to the wiring. In the case of ordinary contracts a contractor is in competition with other contractors. I have been trying to find out if there is any rule under which the Board work, or any standard up to which the work must come if it is to be passed. We used to have Board of Trade regulations, and also there was the Institute of Electrical Engineers, who set up a standard to which the work should be done before an insurance company would take it. The Electricity Supply Board have a standard of their own. In the documents that have been published there are rules relating to the men, but I cannot find any rules for safety as regards the wiring which would satisfy an insurance company so as to take an insurance. Hitherto we had an independent body in that respect. I know the whole thing is in the initial stages.

Eventually, if we are to have safe work done, we must not let the contracting supply body be the judges of their own work and give the certificates regarding it. In every other country in the world there is a perfectly independent body for that, and I believe electricity experts should set the standard up to which the work must rise. We have no such body here, but the Minister will have to appoint such a body and not leave it to the contracting party to give a certificate for the work which they themselves have carried out. It is not a wise thing to allow the Electricity Supply Board to do that. Perhaps the Board in the next report may give an excellent system of rules which could be laid before an electrical expert and which will be amply efficient for the purpose of public safety. Until that is done, there is no certainty that the work is up to any standard except what they think right. We have had our office wired recently. One of the clerks in the office got a shock, and we discovered that one of the metal wires was not properly earthed, so that you could get a shock from it. These metal equipments are a brand new thing, and a set of rules had to be drawn up so that they could be safely used. We ought to have a deciding body who would draw up rules of safety and see that they are fulfilled.

Our accounts, to which I have already referred, are not like the accounts from England, Canada, the United States and other places abroad in regard to the thoroughness of the information given, the cost of the current, the price to the consumer and the profits of the concern. The information of that kind given to the shareholders is perfectly marvellous.

We could not, of course, expect that this Board of Control would give us such figures as to the standard that has been set in other countries, but it is a matter that ought to be kept in front of them. We would ask the Minister to look after the Board and to use his influence to see that these reports are brought into something of the shape indicated. I hope that that will be one of the results of the discussions that we have had to-day.

I think this is a very good resolution. This Board is dealing with public money, but at the same time it is not a public department subject to public criticism. The operations of the Board are not subject to review just as if it were a public department. We have no means of finding out what is done by the Board except from its report and accounts. I think it is desirable that the reports and the accounts should be as full as possible. There is a reason, I think, for that, which has not been stressed by any Senator who has spoken, and the reason is this: this is a big concern, and it is inevitable that as time goes on it will be interfered with more and more by the Minister. I do not think that the Ministry, as time goes on, can really uphold and allow a board of this character to be completely and entirely independent and self-sufficient. Perhaps it can. I hope it can. It is highly desirable that this Board should be self-sufficient and as free as possible. I agree that it is necessary that once a year at least the House should have the fullest possible information as to the operations of the Board.

I propose taking the rather unusual course of asking that the debate on this motion should be adjourned so that I may have an opportunity of considering all that has been said to-day. I am not sure what precisely is demanded, whether it is that the reports and the accounts should be clarified, next year, or whether Senators want the reports and accounts for this year, as well as next year, clarified and expanded. There may be an advantage in getting some of the information segregated, as certain Senators asked, but it may cause difficulty to have this done. I have kept very far away from the Board in most of its activities, following up the plan announced to the Seanad when the 1927 legislation was going through, and I would require time to find out how far what is now asked would hamper the Board. I said here and in the Dáil that the price these people were going to pay for the complete independence that we were giving them was the fullest publicity, and that their accounts and reports should be open to examination and discussion. I also covered my tracks by saying that while I was not going to be responsible for all their actions I did hold myself out as a channel of communication between the Board and this House and the Dáil.

I propose, with the consent of the Seanad, that this debate should stand adjourned until I get an opportunity of considering the questions that have been asked and of discussing them departmentally with the auditors, and, if necessary, with the members of the Electricity Supply Board. I am sure that no matter how much publicity is wanted —and the fullest publicity is promised—Senators would not insist on such publicity as would simply pile up expense on the Board and serve no useful purpose. I would like to go to the Board with the suggestions made here and have an opportunity of discussing them departmentally and with the auditors, to announce here the result of these discussions, and to put certain proposals before the House embodying what I think it expedient to demand from the Board in the next year's report and accounts. Possibly I may be able to supply information about this year's returns also.

In that connection I would like to know if Senator Sir John Keane, when he questioned item 7 in the auditor's report, would like to have an explanation of that now or would he prefer to leave that over until I am dealing with the other matters.

If the debate is going to be adjourned, I do not want to press for anything now. My object in bringing forward this was rather anticipatory of next year's report. I think it is desirable that these points should be clarified.

There is just one other point to which I wish to refer. Senator Jameson asked for a profit and loss account. As he put the point at the beginning, it seemed to me that he desired this in relation to certain sections of work such as wiring, public lighting and domestic lighting. But as he went on to develop his argument, it seemed to me that he wanted this type of account made up for each of these items and further segregated for areas such as Dublin, Cork and elsewhere. I do not know what he has in mind. It would be a very big task to have separate accounts for all the different areas—accounts which have been previously separated under different sub-heads. No doubt the Board, in its gathering in of the material, will try to have items like these brought into separate compartments, but is it essential to have all the divisions to which I have referred? Perhaps the Senator would let me know exactly what he wants before this day week. I was asked by Senator O'Farrell about the Board's policy of charges re wiring. I do not know if the Senator wants me to take up the special case that he gave, to take that as a test case and get information from the Board on it, or does he simply want me to bear that in mind——

I asked if the Minister had any knowledge of the fact or knew that the Board had departed from the rates of charging mentioned in the Report. I gave one specific instance.

I can take up that special matter with the Board.

Is it not a fact that the form which the accounts are to take is in the hands of the Minister: that he can direct the form which the accounts are to take?

Decidedly. It is within my power to prescribe the form of the accounts. I am anxious to have the debate adjourned so that I may have the opportunity of discussing this with the people who know the difficulty of meeting all these points. Then I can come before the House with a considered statement.

Debate on motion adjourned to meeting of the Seanad following the meeting to be held on the 21st May.

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