Seanad Éireann debate -
Wednesday, 7 Mar 1934

Vol. 18 No. 8

Electricity (Supply) (Amendment) Bill, 1934 (Certified Money Bill)—Fourth and Fifth Stages.

Question—"That the Bill be received for final consideration"—put and agreed to.

Agreed to take the Final Stage now.

Question proposed: "That the Bill do now pass."

Mr. Foran

Before the Bill passes, I should like to make some general comments on the attitude of the Electricity Supply Board towards trade unions and the employees of the Board. When this measure was originally introduced into this House, it was described by, at least, one member as a socialist measure. From our experience of the working of it, it is anything but socialistic. The Board has been shown to possess the worst features of capitalism in the treatment of its employees. In their negotiations with the Board, there is no possible satisfaction for the trade unions. After a long interval of negotiation, the Board goes behind the backs of the unions and tries to make a deal with the employees. I hope that the Minister, who has not a lot of power in this respect, will take some action to bring the Board up to date in its dealings with trade unions and to secure for them the treatment accorded them by ordinary industrial concerns. We are not asking for anything more. All we ask is that they should treat with organised trade unions and recognise collective bargaining.

I have numerous cases before me in which the Board delayed and delayed and finally made some arrangement behind the backs of the unions. If this continues, there will certainly be a disturbance in the working of the Board. It might be well if these people were stirred up on this matter in order that they may treat trade unions as the ordinary commercial undertaking deals with them on behalf of its staff. If the Minister can do anything in the way of bringing this matter to the notice of the Board, he will be doing a good day's work for the undertaking in general.

Sir John Griffith

I have had great difficulty in following the finances of the Electricity Supply Board. We have had three Bills before us—the Bill of 1931, the Bill of 1932 and the Bill of 1934—and each Bill simply asked that an additional sum be provided for the Board. I should be very glad if the Minister could see his way, in respect of future Bills which are already forecasted, to let us have some explanation of the way in which the money required is to be expended. That could be obtained, perhaps, in the form of a report from the Board to himself, which report could be inserted as an addendum to the Bill. On the Second Reading, the Minister gave an insight into some of the details. Some of these details are disquieting to a certain extent but we have not sufficient data on which to discuss them in this House. My request is simply to have made clear to the Oireachtas what the money sought is intended to cover. In the three Bills I have mentioned, reference is simply made to a previous sum which is to be changed into such and such a form. That is not, to my mind, a satisfactory financial method. The Minister may have some good reason for it. It would, however, be a great help if, in respect of future Bills, a statement were set out of the works which would be covered by the money sought.

The result of the present arrangement is that there has been no criticism whatever of the Bills in the other House, which controls the finances. I mention this, from my own point of view, because the Minister referred to works in connection with the Pigeon House Fort. There are numerous rumours as to what is being done but there is no official statement made as to what is being done. It is generally supposed that there is practically a new station being constructed as a steam station. The necessity for it has been proved to the extent that the original experts pointed out—the necessity to meet peak loads. During the last year, however, we have had stoppages of the Shannon supply which necessitated the running of this station almost beyond its capacity. I do think that it would be well to have all this thrashed out. A remarkable report was issued by the Electricity Supply Board within the past month or two. That report also causes some concern. It reveals that the Pigeon House Station has had to be utilised during several stoppages of the Shannon supply. The enlargement of the Pigeon House Station leads to the conjecture that the Electricity Supply Board look forward to more serious stoppages. That may be pure conjecture but it is, undoubtedly, the fact that the station is being enlarged and that expenditure on coal has greatly increased. That is not what we looked for when we listened to the eulogies of the Shannon undertaking. I cannot help feeling that, with the Liffey at our doors, the Electricity Supply Board should waken up to the situation and, if possible, curtail their steam consumption. I think that they have it in their power to do so.

Mr. O'Farrell

A rather disquieting aspect of the debate on the Second Reading of the Bill was the narrow definition of his duties and responsibilities in regard to the Board and its work adopted by the Minister. He said:

"I have no function in that matter, apart from seeing that the Board meets its obligations or, at any rate, keeps its obligations before it, so that it will not be able to forget them."

He was speaking of financial obligations but, generally speaking, his speech was to this effect:

"I found the electricity supply scheme in operation and I feel that, in the main, it is my duty to get the Oireachtas to vote the funds considered by the Board to be necessary for development and to see that, to the extent that it can, it meets its financial obligations as laid down in the Act of 1927 and subsequent Acts."

Surely, in a great national concern of this kind, so inevitably bound up with the industrial and social development of the country, the Minister must take a greater interest than that and must accept a bigger responsibility than he has laid down for himself in his definition of his own powers and responsibilities. It was pointed out that there was a deficit of £100,000 in the Board's estimate of its receipts for the current year. The Minister, evidently, was unable to give any explanation as to the reason for that deficit. Surely, the Board must be in a position to give some explanation of that deficit. The Board should have placed that information in the Minister's hands for the information of the Oireachtas. The Minister was asked whether the increased rates brought in any additional revenue and, if so, if they brought in the £80,000 that was estimated by the Board. He said he believed it brought in the full revenue but he was quite unable to say how much. There again I think he should have been supplied with that information by the Board. He was unable to say, at all, to what extent the increased rates destroyed, or helped to destroy, the public confidence in the scheme, or the extent to which it slowed down development. Here again the Board, if it is doing its duty, must have made certain investigations and analysis, and arrived at certain conclusions as to the good, or evil, results of the policy of increasing rates to meet financial obligations. The Minister contemplated a possible reduction in price through an increase in consumption but surely the Board and the Minister must contemplate the reverse position mainly increasing revenue by reduction in rates. Obviously, a reduction in rates will mean a fall in revenue for three months or so, but, taking it for a period of two or three years, it may mean a very substantial increase in revenue and an increase in profits. After all, we are, in this respect, catering for the future, and we can afford to take the long view.

There is danger that we have arrived at the position of stalemate, where the main task is to charge rates necessary, to the existing consumer, in order to enable the Board to meet their financial obligations. At present it is paying interest, but is making no allowance for depreciation. The time has arrived when the financial position of the Board, as laid down in 1927, will have to be reviewed, with the possibility of amendment in this direction. I should imagine the logical conclusion of the whole position is that the Minister should, with the Board, go into the whole position, ascertain what the plans are for subsequent development, how long the existing position in regard to finance may continue, and to be able to report, on a subsequent occasion, to the Oireachtas, what the prospects of the scheme are. In matters of this kind there is just the danger that a policy of drift or stalemate might set in. We cannot possibly afford that in connection with a scheme of this kind. The Oireachtas has voted the money and is responsible for the initiation of the scheme. There is no desire at all to interfere with the management of the scheme, or to hamper in any way the work of the Board, but there will be a very natural tendency to inquire as to whether the Board have any idea of progress, extension or further development. If not, if they have no such plan, the Oireachtas should be so informed, and should take such measures which may be considered necessary as a result of that policy.

Mr. Garahan

I would like to call the attention of the Minister to the fact that the Electricity Supply Board has not brought any connection into the town of Ballymahon. There is a main wire within three miles of the town, but no connection. The inhabitants are very anxious to have this matter attended to. I myself, although I do not live in the town, would be glad to have it done. I should be glad now to have an assurance from the Minister that he would be good enough to look into the matter and have a supply extended to the town, if possible. Perhaps I should have had this matter raised on Second Reading, but, unfortunately, I was not able to be present on that occasion.

Mr. Guinness

Arising out of the remarks made by Senator Sir John Griffith, I should like to ask the Minister whether anything is being done to show how this money now asked for under this Bill is to be used. Is it for revenue or for capital purposes? Since 1931, when, I think, the Board was started, it got a grant of £2,000,000. That grant now amounts to £3,500,000, and nowhere in the accounts is it shown whether the additional amount is for revenue purposes or for capital purposes. I take it that the sums expended in buying the going concerns and also additional works at Ardnacrusha, such as the putting in of a new turbine, are probably looked upon as capital works, but there is nothing to show that they have been so treated.

I think it is only right that the Oireachtas should know where these sums of money now being voted are going to be expended. There have been two or three things done—the deepening of the channel at Killaloe, I think, would be capital expenditure. There is the extension of the Corporation Works at Ringsend, and that could hardly be looked upon as a revenue charge. On the other hand, we must remember that a year or two ago sums of money were voted upon the condition of the Board telling us there was a loss at that time of anything between £700,000 or £800,000 that had to be made up. They require more money then for revenue purposes, but that has not been brought into the account and does not appear as so shown in the accounts. I think it is of great importance that there should be differentiation between revenue and capital expenditure when such large sums of money are involved. The Minister in replying might be able to enlighten us on that.

Colonel Moore

During the debates long ago on this matter we were assured on two or three different points that the navigation would be extended, and about boats being able to come along the channel and, also, that the fisheries would be secured. I do not know how these matters stand now. I believe also that there was talk of deepening certain parts of the river in order that there might be a greater supply of water. On the other hand, I hear parts of it are now so low as to prevent navigation. This is a development of a £5,000,000 business to a £10,000,000. Of course the Minister is not responsible for that, but there it is and we have to pay for it. I think we ought to understand how these things are. We ought to understand whether the navigation is more or less, whether the fishery has been damaged or not. That is a very important matter, for the fishery is a very valuable fishery. I hope the Minister will be able to give us some information on these questions when he replies.

Mr. Counihan

I would like to ask the Minister whether he has considered a scheme of extending the supply to farmers who live some considerable distance from a station. I have had the experience of making an application to the Board five or six years ago. I was told that if I could get five or six other farmers who would also take the supply it would make the matter much cheaper. The Board then sent out their engineers to make investigations and they estimated that it would cost anything up to £5,000, which should be paid cash down. Now we do not object to paying higher rates for the power in such a case, but we cannot afford to pay large sums down for installation costs. We would be prepared to pay an extra price if the cost of installation was spread over a number of years.

Mr. Parkinson

I would like to support Senator Counihan in his application for cheaper power for industrial purposes. I was talking to the chairman of the Ontario Supply Board and he told me that in Canada instead of very expensive transformer stations, they have cheap methods of taking current from the high tension wires and transforming it into 100 or 200 volts necessary for smaller plant. In that way farmers are connected up by the Supply Board with the bigger supplies. As well as that I would also mention to the Minister that in Switzerland and northern Italy, the most highly developed users of electricity, for the use of industrial current there are smaller installations which are portion of the bigger plant. They must have some very cheap method of using power during the non-peak hours and in that way a great deal is done during those hours when the load is light. In that way, also, a good deal can be done in this country, by making more use of our plant than we do at the present time. I suggest that some of this money, or even more money, should be spent in exploration in that direction in this country.

Mr. Johnson

I would like to ask the Minister if he is in a position to give any information regarding the progress, upwards or downwards, of power for domestic purposes, for heating and cooking, and to fill the gaps that I indicated, in the earlier stages, were apparent in the report that was circulated. I think most of us here who were at the initiation of this scheme had thoughts not merely of a commercial undertaking which was going to recover its expenses by its receipts, but that there were going to be real social and economic advantages introduced. The social value of electric light and heat was perhaps uppermost in the minds of most of us. Others thought that the use of electric power for small industries would be greatly accelerated by the introduction of the Shannon scheme. It seems to me that the Board, while probably following out what it conceives to be its duty, is over impressed by the necessity of the balancing of its accounts in the immediate future and that it is not taking the view that there ought to be for national purposes a great increase in the consumption of electricity. From my own observation I am very much of opinion that even in Dublin where the current is cheaper there has been a decline latterly in the consumption by individual householders of domestic current. I think that is probably the most serious aspect of the present situation, and I think it is due to the consciousness that people have arrived at, that electricity for domestic heating and looking is very much more expensive than any of its alternative or rival means of heating and cooking.

One sees great developments in gas distribution. No sooner is a new housing scheme in Dublin projected than the gas company is seen laying down mains immediately, long before there is any likelihood of a paying consumption. I cannot speak positively, but I am very much of opinion that the very great increase in new houses is not being met by the Electricity Supply Board in the way of equipment for supplying those houses with current. It would be so much easier and cheaper for them to do it when houses are being built than to come forward two or three years hence when, perhaps, they have reduced charges and popularised the use of electric current to make the installations. I am very much of the opinion that the Board is taking too strict a line on the financial side, probably due to the fear that loose accountancy in the past has been very detrimental to the good name of the Board, but the present policy, I think, is going to nullify all the good work that was anticipated nationally an socially at the initiation of this scheme.

The experience of many places where electric power was begun to be used is that it is no longer being used. I think it would be of very great interest and importance if we were informed what is the trend in respect to old consumers; those who have been hitherto consuming electric current. What is the position to-day as compared with, say, a year ago; what is the trend in regard to the consumption per household? I think if that were made known to us we might have more confidence in the policy of the Board.

Mr. Comyn

I would not like that it would be taken as the unanimous opinion of this Seanad that the Board should not be very strict in regard to its accounts. When this scheme was first mooted we were told that the enterprise would pay its way. I think that is most desirable. Social amenities for users of electric light are very good, but I think it is desirable that these social amenities should not be obtained at the expense of people in the rural areas who have no electric light, and who have not the same social amenities as people in towns. This is a considerable sum of money which is now legislated for and if the principle should be accepted that this enterprise is not going to be, in the economic sense, self-supporting, the meaning of that would be that larger and larger sums would be piled up to be met ultimately by people who use electric light and by people who do not use it. Therefore, I think that the Board are perfectly wise in securing that, as far as possible, the enterprise should be a paying concern and that at the expense of those who use electric light.

There is one other matter which I would like to refer to. Senator Sir John Griffith, when he intervenes in debate in this House, always contributes something of great advantage both to the House and to the country. We are always glad to hear him, and on the present occasion I would like to emphasise what he has said in reference to alternative power: that is the power to be derived from the Liffey as well as water power derived from the Shannon. I think that sufficient consideration has not been given to the scheme for developing the water power of the river Liffey. It is desirable that you should have, if possible, not merely one or two or three but several sources of power, and for that reason I would like, so far as any words of mine can emphasise what Senator Sir John Griffith has said, to keep if I can before the attention of the Minister the necessity for considering not once or twice, but keeping constantly before the official mind the fact that we have a source of water power in the Liffey.

We do not know for what purpose the Minister requires this sum of money. Perhaps it may have some relation to the Liffey scheme; perhaps also it may have relation to some disputes which arose in reference to the construction works at Ardnacrusha or elsewhere. We do not know, but I hope that it has relation to works on the Liffey. In any case, we trust the Minister to see that this money will be expended to the best advantage. We hope that it is the mind of the Minister that these schemes for using water power and supplying electricity should always be on a commercial basis: that they should pay for themselves.

Mr. Douglas

It is not clear to my mind how far the Minister has power, once this money is handed over, to absolutely control its expenditure. I have not got the original Act before me, but I imagine that, while he has a certain amount of influence, he is limited in the absolute power of control that he has. I agree with Senator Comyn and Senator Sir John Griffith in what they said in regard to the Liffey. I think there was an understanding, if there was not an undertaking given at the time that the Shannon scheme was going through the Oireachtas, that when it was necessary to obtain additional power consideration would be given to the Liffey and to other schemes which were then under consideration. It surprised me when I first heard that the Board was going to spend more money for the purpose of increasing the power derived from coal. I should very much like to know if the Minister is aware whether the Board consider this necessary in addition to the possible developments of rivers other than the Shannon, or if it has rejected definitely the development of other rivers.

My principal reason for rising is to support the suggestion made by Senator Sir John Griffith with regard to the report of the Board. It seems to me that the people of this country are the shareholders in this undertaking, and that the members of the Oireachtas are really in the position of trustees for the shareholders. In the case of any commercial undertaking requiring fresh capital it would first of all need the sanction of its shareholders. In asking for fresh capital the directors of the concern would be obliged to issue a detailed report setting out exactly what it was proposed to do with the fresh capital. I think that in the case of the Electricity Supply Board, in view of the relation it holds to the Government and the limited control that the Government has over it, it is absolutely incumbent on the Board when asking for fresh capital—this Bill amounts to a request for fresh capital—to set out, just exactly in the same way as the directors of a company would have to do, how it proposes to use this fresh capital—to do so at any rate in general terms. I have no doubt whatever that the Board has to go and see the Minister on a matter like this and to satisfy him within reason. I think that in future, apart from the annual report, there ought to be a separate report for which the Board itself would accept responsibility. When I say that of course I am referring to the future.

Minister for Industry and Commerce (Mr. Lemass)

A number of the matters which have been raised in the course of this discussion have a bearing on the question of the relationship between the Government and the Electricity Supply Board. Apart from the functions of the Minister for Industry and Commerce under the 1931 Act, the main function of the Government in relation to the Electricity Supply Board is the appointment of its members. We must, of course, take responsibility for the actions of those whom we appoint. We must be satisfied as to their suitability, and be satisfied that during the period of their term of office they are doing their work properly. We would have the obligation of taking the necessary measures to remove people from the Board who were failing in their duty, or to reconstitute the Board if such a course appeared to be necessary. But, apart from functions of that kind, the Government have no powers in relation to the Electricity Supply Board. It was set up as an independent organisation. It was appointed, it is true, by the Government but otherwise it was charged with certain statutory obligations and given complete freedom of action in the fulfilment of its obligations. That is a position which I am very anxious to preserve. I think it would be very undesirable that we should move away from that position and tend to make the Electricity Supply Board more and more a section of the Department of Industry and Commerce for every detail of the administration of which the Minister would be answerable to the Oireachtas.

Under the Act of 1931 additional powers not contemplated by the Act of 1927 were taken to control the activities of the Electricity Supply Board. The money which was made available in that year, and the money which is being made available under this Bill, is only passed over to the Board when the Minister for Industry and Commerce is satisfied that it is reasonably and properly required by the Board for the carrying on of its activities. In 1927 it was not contemplated that that power should be given to the Government. Under the Act of 1927 the Board was entitled to get, up to the limit of the amount specified under the Act, whatever capital it required on requisition. I think it is desirable that, as soon as possible, we should get back to the 1927 position and away from the 1931 position. We have not decided to do that yet and it is unlikely that we will do it in this year, but I hope that it will be quite possible at some date to restore the position in which the Board will itself be solely responsible for its capital expenditure, receiving the necessary capital from the State by way of advances under Acts of this nature. We may, at a later stage, reach the position when it will be possible to give power to the Board to raise additional capital it may require by making direct application itself to the public. It is clear that if the relationship between the Government and the Board contemplated in 1927 is to be maintained it would be undesirable for the Minister for Industry and Commerce to use the special position in which he stands in relation to the Board for the purpose of interfering in details of administration. He could do it in the sense that you can crack eggs with a sledge hammer; he could tell the Board to do certain things in relation to matters of detailed administration, or else, under the terms of the Act, say: "We will remove you from the Board and put in people who are prepared to do these things." Any tendency to operate on these lines would, in my opinion, very quickly wreck the scheme and would make it impossible to get on the Board people with the necessary independence of character or ability to make a success of the enterprise.

The first point was that raised by Senator Foran in relation to the conditions of various employees of the Board. I am not aware that the Board has refused to negotiate with trade unions, or abandoned the principle of collective bargaining. To my knowledge the Board has negotiated with trade unions and has had collective bargaining. I want it to be clear, however, that if there is collective bargaining it has to be bargaining in the proper sense. It ceases to be bargaining, in my opinion, if in the midst of negotiations the Minister for Industry and Commerce was to put in his weight on one side or the other. I am not prepared to do that. I had to make that decision very early in my term of office, when various representations were made to me by different trade unions to the effect that they were in negotiation with the Electricity Supply Board and they wanted me to make representations to the Board to concede their demands. I refused to do it. I said that this was a matter for the Electricity Supply Board, to be settled by them in negotiation with the trade unions concerned. That is a position which it is only right I should maintain.

Senator Sir John Griffith raised a question as to the giving of information, and the purpose for which the amount provided under this Bill is required by the Board. It is very difficult to give precise information on that point, because this is capital required by the Board to finance its ordinary development over a period of years. No doubt, it has prepared estimates, under various headings, of the capital it will require, but any figures that would be made available are no more than estimates, and are based upon the Board's conclusions as to the rate of development over that period. The Act of 1931 was a similar one, and £2,000,000 was advanced to finance ordinary development for a period of time. The Act of 1932 was not of quite the same nature. The amount advanced under that Act was definitely allocated for the specific purpose of installing a new unit at Ardnacrusha, and making certain improvements at the Pigeon House. No money was made available under the 1932 Act for any other purpose except to increase the capacity of the Board's generating equipment. No part of the moneys advanced under this Bill will be expended in increasing the capacity of the Board's generating equipment. In the main, it is required to finance the development of the transmission and distribution system, as the demand for current increases. In certain areas the demand for current may increase to a point that it is necessary to improve the transmission system and to extend the distribution system. When new areas are opened up the transmission system has been extended and a new distribution system established. All that involved continuous expenditure of capital, and capital expenditure of that kind is directly productive of revenue. Under the powers conferred on the Minister for Industry and Commerce under the Act of 1931 it is not advanced until the Board is able to submit definite evidence that it will be productive of sufficient revenue to meet all the charges that will arise, not merely capital charges, but maintenance and similar charges. In the main, money advanced under the Bill is for purposes of that kind—but not all. Some of the money is required for the improvement of the Shannon works and for certain enlargements at the Pigeon House. Capital thus expended will not be directly productive of revenue nor will it involve consequential revenue expenditure. The money invested in the deepening of the Shannon at Killaloe, in extending and dredging the wharf at the Pigeon House will increase the efficiency of the Board's equipment, but will not increase its revenue or earning power in the same way as capital expended on transmission or in the distribution system will.

I endeavoured to give to the Seanad and to the Dáil general information as to the main items upon which this £2,000,000 will be expended each year, over the three years it is intended to provide for. In the main, it represents capital which will be invested in fixed assets, in works of some kind, but some part is required for working capital purposes, such as capital required to finance the sale of equipment on the hire purchase system, and similar activities of that nature. Another Shannon Bill will be introduced in the present session, dealing with entirely different matters, and providing capital for the Board for the specific purpose of increasing the storage capacity of the Shannon and so forth. That will be a Bill of a different nature, and the amount provided under it will be definitely allocated to the works which it is intended shall be created in consequence of the passage of the measure.

Senator O'Farrell asked for a reason for the deficit shown in the Board's accounts, a deficit which would exist if depreciation had been provided for. The reason for the deficit is that the revenue of the system was not sufficient to pay the charges arising out of its operation.

Mr. O'Farrell

I asked for a reason for the deficit in their estimate of revenue.

Mr. Lemass

I intend to come to that. I should point out that by far the greater part of the Board's outgoings are fixed charges. They are yearly charges of a fixed amount, tending to increase every year as the extension of the system increases. The proportion of the total outgoings which is capable of reduction by improved methods of working, or by measures of economy, is comparatively small. The Board's finances will not be in the healthy position we would all like to see them until it has succeeded in increasing its revenue much more rapidly than it has been increased. It cannot increase revenue without increasing expenditure, but it should be possible, by the development of sales of all kinds, to secure a more rapid increase of revenue than expenditure so that the present deficiency in revenue will be made good in the course of time.

In 1931, the rates of charge were increased, and it was estimated that the increase in rates, plus an intensive drive to increase sales, would produce a certain increase in revenue over and above the increase which was expected would arise in any event from increased consumption. The full increase anticipated was not realised, but an increase of a substantial amount was secured. It obviously is impossible to say to what extent failure to get the full increase was due to the increase in the rates of charge, or due to the fact that the intensive drive to increase sales did not take place as early as was contemplated, or was due to economic considerations entirely outside the control of the Board. One can get as many opinions on questions of that kind as there are people to offer opinions. In the end it is impossible to be certain that the increase that took place, or the deficiency between that increase and the estimated increase was attributable to any one cause. It is particularly difficult to say if it was attributable to the increase in rates. The experience of 1933 would seem to indicate that any falling off in the sale of electricity as compared with the estimated sales during that period, was not attributable to the rates of charge; that there was, in fact, no substantial difference between the actual achievement and the estimate, although the estimate was less than one would have liked to have seen.

One can also get a very large number of opinions as to the effect upon revenue of a decrease in rates of charge. In any event it is quite clear that it would be a gamble to cut the rates of charge in the anticipation that that would lead to a very substantial increase in consumption, and a consequent improvement in the revenue position. It must be borne in mind that the increased use of electricity must, in the main, involve a substantial increase in expenditure. It may be possible by various measures to get existing consumers to increase the amount of current used, but even an increase of that kind is going to involve subsequent expenditure on the transmission system and upon the generating equipment, so that it is not possible to get an increase in revenue to set against existing capital charges. You must get an increase in revenue which will offset the increased capital charges which will result from the causes which led to the increased revenue.

Mr. Johnson

It is a blue lookout.

Mr. Lemass

I am going to deal with Senator Johnson's comment. The Board's accounts were not balanced. I have not, as has been suggested, pressed the Board to balance the accounts at all costs, and as soon as possible, providing for all the obligations set out in the Act of 1927. I have asked them to show me that at any time they will be able to balance the accounts; that the scheme is not a "white elephant," not capable at any time of producing sufficient revenue to meet its charges. They have, on paper, shown that for a considerable time there will be such an increase in consumption each year, that a revenue will be secured which will meet all the existing capital charges and maintenance charges, plus any charges created by the increase. That is not going to be done this year, next year, or the year after. It is going to be some time before that is done, and that does not take into account the making of provision to offset the arrears of depreciation that have accumulated to date. The more rapid the extension of the system the better it will be, provided that the extension is remunerative. Whether it is to Ballymahon or anywhere else, I would like to see the Board extending its system to every district, provided that it is going to pay to do so. That obviously must be the test. If the Board is reluctant about extending the system to Ballymahon or any other district, it is because they have not been able to get a prospective sale for current sufficient to offset any charges arising from the extension. As soon as they get that prospective sale, and they have available the capital provided by this Bill, then the extension can take place as rapidly as possible. On the question of the extension of the current to farmers, I am prepared to bring to the notice of the Board the remarks made by Senators Parkinson and Counihan.

I should like to make some remarks with regard to the extension of the Pigeon House works and the utilisation of the Liffey for power purposes. Even with the extension of the Shannon scheme, an extension of the Pigeon House is necessary. An extension of the Pigeon House does not indicate a decision on the part of the Government to substitute steam for water power. The larger and more effective the stand-by plant of the Board is, the more it can use the water power available for it. We should be very careful not to draw any conclusions on the experience of last year, which was an entirely abnormal year. My predecessor, when explaining the basis upon which the experts prepared the Shannon scheme, indicated that they had gone back over a period of years and had prepared their scheme on the basis of the lowest rain-fall recorded in any one year. They did not go back far enough, because last year and very nearly in 1932 we had a much lower rain-fall than anything recorded in the period surveyed by the experts. For the past six months the rain-fall has been lower than at any time on record for a similar period.

Last year was entirely abnormal. The Pigeon House was working at full pressure from early in May and is working still because of the fact that there has been an entirely abnormal situation in respect of water. In the previous year the Pigeon House had to be operated from 13th June to 8th September because of a shortage of water in the Shannon. It had to be operated at other periods due to certain causes such as a leak in the coffer dam necessitating the shutting down of some of the turbines at Ardnacrusha, a fault in the cable at Inchicore and, in the early part of 1933, because of the breakdown of the transmission lines due to the snowstorm.

The Board have always planned on the retention in the Shannon of what they call their iron ration of water; in other words, a certain volume of water which would constitute a reserve against an abnormal period and which could be utilised in the event of an unexpected rise in the demand for current or for any other cause that necessitated it. With the development of the stand-by plant at the Pigeon House and an increase in the capacity of that plant, the iron ration of water that must be retained in the Shannon is obviously smaller in dimension because the Board can always feel it can play more freely with its Shannon reserve if the stand-by plant can be brought into operation at any time the occasion requires it.

If we develop the Liffey it may in turn involve a still further extension of the Pigeon House although it is clear, of course, that the Liffey would also constitute in certain circumstances a stand-by for the Shannon. At present investigations in relation to the development of the Liffey are proceeding. There is obviously no sense in constructing a power station on the Liffey until we need it. Whether it was wise to have started on the Shannon in 1924 instead of on the Liffey is not now a matter about which we need argue. The Shannon scheme has been constructed and there is no need to have a Liffey scheme until there is a demand which makes it necessary to extend. We contemplate that that stage will have been reached in three or four years from now. We must, therefore, have any new scheme which may be decided upon constructed within that period. At present certain examinations are being proceeded with in relation to three or four alternative methods which have been suggested of utilising the Liffey. The Dublin Corporation are also contemplating utilising the Liffey for the purpose of a water supply, and at present the engineers of the Corporation and the Electricity Supply Board are in consultation as to the possibility of combining both projects in one scheme. Out of the money provided under this Bill a certain sum is set aside for the financing of that Liffey exploration work as well as other exploration work that may become necessary from time to time.

A question was raised as to the fisheries on the Shannon. In connection with that, some Senator also referred to interference with navigation. I want to emphasise that last year was entirely abnormal, and measures that had to be adopted last year and measures that are being adopted now would not be necessitated if we had had a normal rainfall for some months past. At present the Shannon is below summer level and it is necessary to conserve all the water supply. We have had to interfere with navigation in the Shannon because of the abnormal drought, and unless rain comes fairly soon it will be impossible to contemplate that navigation will take place on the Shannon this year. That situation will, of course, be remedied when the increased storage is provided, but that will not be for some time. The only solution for the Shannon at the present moment is rain, and there is no way of securing rain that I know of except by prayer.

Mr. Foran

Or the farmers' tears.

Mr. Lemass

If Senators can help us in that matter we shall be very glad. In connection with the fisheries, a Shannon Fisheries Bill is at present in draft and will shortly be introduced into the Oireachtas providing for various matters in relation to all fisheries in the Shannon. Perhaps matters in that connection can be more properly discussed on that measure.

Mr. Wilson

The Minister has not explained at what rate per cent. this new advance is to be made to the Board. Having regard to the fact that the main cause of the high rates charged for electricity is to secure an income sufficient to meet the requirements of the capital charges of the Board, is there any possibility in future of reducing the charges which will be placed on the Shannon capital to a lower rate in order that the farmers may be given cheaper electricity? If it were cheaper we might get the distribution which is not possible at present because of the high charges for capital.

Mr. Lemass

The Board was informed, before I became Minister, that a rate of interest at 5½ was to be fixed under the Bill and the repayment periods for capital were to be 40 years in respect of some portions of the advances and 20 years in respect of other portions. The periods fixed were favourable to the Board. The rate of interest represented what the Department of Finance considered was sufficient to secure it against losses on the making of these advances. It was not considered desirable, nor do I think it would be desirable under any circumstances, that the taxpayer should be asked to subsidise the price of current. If the Department of Finance were to fix a rate which meant a loss to it, it meant that the taxpayer was subsidising the Shannon Board. Since then it became clear that the State can borrow money at a lower rate and on that account some adjustment of the rate appears to be called for. At present discussions are taking place between the Department of Finance and the Board as to the rate which will be fixed for future advances.

Mr. Wilson

That is the only hope.

Question—"That the Bill do now pass"—agreed to.