The main purpose of this Bill is to raise the limit of advances to the Electricity Supply Board. As the House is aware, the Electricity Supply Board draws from the Exchequer the capital needed for its development and the amount which the Exchequer can advance to the board is limited by legislation. Under the existing legislation the limit is £36,945,000, and the effect of the section of this Bill is to raise that by £22,000,000 to £58,945,000. It is estimated that that sum will meet the requirements of the board until 1955. Out of the additional amount to be advanced to the board approximately £12,500,000 will be spent on new generation; £4,000,000 on transmission; £4,000,000 on distribution, and £1,500,000 on general purposes and contingencies.
In preparing that estimate of the capital needs of the board it was considered that the demand for electricity would double during the course of the next five years. The House is aware, of course, that it takes generally from four to six years to complete the construction of a new generation station, and as far as the next five-year period is concerned new stations that will come into production are either now under construction or have reached the stage at which construction is about to commence. I will give the new stations in the order in which they will come into operation. The first is the extension of the North Wall station. The North Wall station, as the House may be aware, was built upon the boiler houses which were originally constructed for the oil refinery project. When that project lapsed the Electricity Supply Board took over these boiler houses and built a small power house there. That station is being considerably enlarged and two additional generation sets will be installed, adding 100,000,000 units per year to the board's supply by 1953.
A new station is being built at Cork to burn coal or oil, with an estimated capacity of 200,000,000 units per year, which will be in production by 1954. A new station is being built at Ringsend, also to burn coal or oil, with a capacity of 200,000,000 units per year, to be in production by 1955.
In the following year another generating set will be installed at Ringsend, adding another 100,000,000 units to the capacity of the system, and in that year also the new Ferbane turf-burning station will come into production, with two sets giving 160,000,000 units. In 1956, the first set in the proposed turf-burning station at Bangor-Erris will be in production, giving 80,000,000 units. In 1957, the Lee River hydro-electric station, with one set giving 60,000,000 units, and in that year also the second set of the Bangor-Erris station are expected to be in production, adding another 80,000,000 units to the board's production. That programme of generation up to 1957 will, it is thought, keep the board's generating capacity ahead of demand.
It will be understood that estimates of that character must necessarily be provisional. The total capacity of the existing power stations of the board and of these new power stations to be erected may vary with conditions. The hydro-electric stations are affected by weather conditions and the steam stations by fuel supplies. The estimated capacity of the stations is based upon average conditions. The estimated demand for current is, of course, even more provisional, but the rapid growth in the use of electricity during the past few years indicates that demand will continue to increase at the rate I have indicated.
A further programme for the next following five years has been drawn up but, of course, no part of the capital required to carry it into effect is provided in this Bill. That programme is being drawn up now because if work is to be completed in accordance with the board's schedule during that period, it is necessary to start planning now.
The Bill also provides for an increase by £3,000,000 in advances to the board for the rural electrification scheme. The legislation passed in 1945 fixed a limit of £5,000,000 to the advances that might be made to the board for the purposes of that scheme. That limit has now been raised to £8,000,000. The rate of progress on the rural network is accelerating. The progress made in 1951 was the best to date. It is hoped that that improvement will be continued, although that hope is subject to certain supply difficulties being overcome and to the successful outcome of the board's efforts to meet shortages of technical staff.
The finances of the rural electrification scheme have, of course, to be reconsidered. When that scheme was prepared in 1943 it was based upon the assumption that prices post-war would be pre-war prices plus 75 per cent., and the finances of the scheme rested on that calculation. It is now obvious that the costs of constructing the network, the cost of the scheme as a whole, will be substantially greater than was assumed in 1943. The present estimate for the final cost of the scheme is £24,500,000. On the original calculation one-half of the capital cost of construction was given to the board by way of free grant from the Exchequer. It was recognised then that a capital subsidy of 50 per cent. was provisional in large measure and that if costs worked out different from the assumptions made then a revision of the capital subsidy would be necessary if the board was to avoid losing money on the scheme.
It is more than obvious now that a 50 per cent. subsidy is inadequate and it may even be that a 100 per cent. subsidy would be necessary to prevent any charges falling upon the board's revenue because of the rural electrification scheme. The charges now falling upon the board's revenue by reason of the fact that the capital subsidy is still on a 50 per cent. basis are not considerable and it is not a matter of urgency to rectify the present position. But it is obvious that at some stage the whole matter will have to be reviewed. I was intending to review it later in the present year. The additional capital which is being provided for the rural electrification scheme will meet outgoings, it is estimated, for two years.
The rest of the Bill deals with pensions of Electricity Supply Board employees and proposes to make certain changes in the law in that regard. The first of these changes is to give to pensioners of the board who retired before the relevant dates—which are September 23rd, 1946, for manual workers and April 1st, 1946, for general workers, who are not covered by the general Act passed in 1950—increases in their pensions corresponding to those provided in the 1950 Act. For some reason—it may have been a drafting error, it may have been a deliberate decision, although it would be hard to understand—that increase of pension, in so far as it applied to Electricity Supply Board employees, gave the increase only to those employees whose pensions were calculated on a cost-of-living basis. The purpose of this amendment is to give a similar increase to the board's employees whose pensions are on a fixed basis.
It will be appreciated that the board has different categories of pensioners arising out of the fact that it took over local authority staff at various stages of its development with different pension rights and many of them with no pension rights at all. Only after the passage of a considerable period of time will all the board's employees have their pension rights based solely upon the board's own schemes.
Another change being made here is to make the increases in pensions which were authorised by the 1950 Act, as well as increases under this Act, retrospective to 1st April, 1949. That was done for local authority employees but, for some reason, it was not done for Electricity Supply Board employees. There is one other change in the law relating to the board's pensioners being made in this Bill.
Under the legislation regulating the transfer of Local Government employees to the Electricity Supply Board, these employees are entitled to remain indefinitely in the service of the board. If their services are terminated, they are entitled to appeal to the Minister for Local Government. At the time at which most of them were transferred, there was no legislation fixing age limits for retirement for Local Government employees. Such age limits were fixed by the Local Government Act, 1941. However, that Act did not apply to these former employees of local authorities who were transferred to the Electricity Supply Board, and the purpose of one of the sections of this Bill is to apply the provision of the 1941 Act to these transferred employees of the board. The retiring ages fixed are the same as those fixed by the 1941 Act for Local Government employees. When the board's pension schemes were being prepared, it was contemplated that the normal retiring ages would be 65 for men and 60 for women, and these schemes provide that service with the board after these ages will not count for pension purposes. The actuarial basis of the schemes was calculated upon that assumption.
It appears, however, that the schemes are in conflict with the legislation in respect of that provision, and one of the sections of this Bill is designed to remedy that defect in the legislation by determining as the normal retiring ages the ages specified in the schemes and to provide also that subsequent service with the board will not count for pension purposes. That section of the Bill is intended to rectify a defect in the 1942 Act. In so far as the House may wish to consider these pension provisions, they are more appropriate for discussion on the Committee Stage than on Second Reading. As, however, a Bill was necessary to effect changes in the law relating to the board's advances to which I have referred, an opportunity was taken to make these changes in respect of the pension provisions also.