Electricity Regulation Bill, 1998: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Because of our involvement in the EU we are subject to its directives, especially on the introduction of free and open competition. EU Directive 96/92EC has been introduced and it is clear about permitting others, apart from the ESB, to supply a certain amount of electricity; the Minister is bound by an initial figure of 28 per cent rising to 32 per cent by 2003.

This is important legislation. Due to the level of development which has taken place in the State and the progress which is being made, there is a huge demand for the supply of electricity. We are in a position of being able to just about cope with the demand. Demand and supply are almost equal however, and we could be moving into a situation where there would be a problem with supply. That is why this matter should be dealt with urgently.

It is important that all consumers are assured a supply at all times and that has been addressed by the Minister in this legislation. It is important that in the deregulation of the system and the opening up of competition the consumer is protected. The isolated rural consumer should be as sure of his supply as someone in Dublin city centre and this Bill goes a long way to ensuring that. Having read the Minister's notes for Second Stage, that appears to be dealt with in the legislation.

It amazes me that anything would cause Senator Liam Fitzgerald to be mesmerised at any stage of his life.

He was very young.

I had not realised. When he spoke he sounded older than he is.

Because of the salt storms from the sea along the west coast, the line network can be badly eroded. When there is a severe storm the lines snap. This is a feature of life in the west. Last Christmas in County Clare, from Loop Head to Black Head, almost all the area was without electricity for two or three days. I join Senator Fitzgerald in congratulating the ESB teams who went out to work then. I know people who were out for 18 hours without a break. There was no Christmas Day for them – some of them left at 11 o'clock on Christmas morning and did not arrive home until 5 a.m. on St. Stephen's Day. The work they did to ensure the restoration of supplies deserves to be recognised.

We need to be guaranteed that level of commitment and support by any new supplier who enters the market to compete with the ESB. Fundamental issues need to be addressed. I believe they are addressed, and I am reasonably satisfied with what the Minister said and with what is in the Bill. First and foremost, the level of service to the supplier is vitally important, as is a continued supply. The other issue is cost. Those three issues are vital.

It is important nobody is discriminated against or placed in greater difficulty because they are isolated rurally. There has always been a social dimension or responsibility in legislation on semi-State bodies which has gone through the House. I fear that with deregulation and the opening up to competition we, as a member state of the EU, may not be in a position legally to ensure that social responsibility remains with open private competition. The Minister is aware of what I am talking about and has attempted to address it. It is important that she and her successors ensure the type of support given to consumers by the ESB is continued by competitors. This Bill is fairly detailed in how it deals with the changeover.

Some of the strictures may seem to be non-competitive but they are necessary. There is a need for somebody to be responsible and to keep a watchful eye, and I congratulate the Assistant Secretary at the Department of Public Enterprise, Mr. Tom Reeves, the designate commissioner. He has a considerable job to do. Having read the Minister's speech and the Bill, he will have to be Superman if he is to do all the work he is expected to do and which will be there for him further down the line. He will need a large staff to ensure all the details are put in place effectively and successfully and that everything aspired to in the Bill is successfully concluded. Is it fair to him to have only one person?

He poached one of the best people from my office. They went for competition and won it.

Much to the Minister's horror. He must be a very powerful man if he can poach from his own Minister and will be a hard act to follow.

The Minister may avail of the opportunity in the legislation to open it up to two or three people, so they may take responsibility for different areas. How many staff does the Minister envisage the commissioner will have when his office is set up? It would be interesting to know exactly how many staff he will have, given all the functions for which he will have responsibility.

It is important there is no conflict of interest, and I am delighted to note that the industry is pleased the potential for a conflict of interest will be removed. Licensing will be given to an authority independent of the ESB. We do not need a conflict of interest in the semi-State or State area. An independent licensing authority will be extremely important because, in the interest of fair play, it is important that one is seen not to have a specific or direct interest. That is an important and welcome development.

It is also important that specific criteria are laid down. The criteria applied by the ESB to date have been fairly stringent. There has been good communication with the public and good warning systems in relation to the safety and security of the electricity system. Good communication has been made possible through the local media, whether radio and newspapers, on the danger of falling lines and so on. It is important that criteria are strictly adhered to.

We are becoming more conscious of our environment. Given the proliferation of telecom and ESB poles and the variety of apparatus emerging on the horizon, it is extremely important that we are aware of the protection of the environment. I hope the Minister and her Department will ensure that as many of the new lines as is possible and practicable are placed underground so that we would not have these eyesores. It would be much easier to maintain lines underground as they would not be subject to environmental corrosive erosion as they are at present. It is important public campaigns on energy conservation continue, either through the ESB or the commissioner's office.

I would like the Minister to explain something to me and perhaps she will excuse my ignorance. She defined customers eligible to chose their supplier and referred to four gigawatt hours in a 12 month period at single premises. About 28 per cent of the market falls into that category. I am concerned that private suppliers might be able to cream off the heavy end of the market with the least demands in relation to maintenance and the necessary ancillary services. It is important the ESB or any other supplier is not left with the weak end of the market with the most overheads. It is important a balance is struck, and I ask the Minister to keep an eye on that.

Cuirim fáilte roimh an t-Aire. I welcome this Bill and commend the Minister on the manner in which she brought it forward. It is timely that it has been introduced at a time of tremendous economic growth. I concur with much that Senator Liam Fitzgerald said earlier in that the ESB has made a tremendous contribution since the early decades of independence to the industrial development of Ireland. Without the generating stations and the contribution they made, we would not have seen the industrial and commercial development which has taken place.

As I have said before, there is a fundamental weakness in monopolies, particularly if they are public utilities. This Bill will address that at a time when the thrust of EU regulations and policies are moving towards increasing competition. It should be recognised that the ESB has in recent years taken steps to equip itself to meet the new situation which will pertain. It is a credit to the management and workforce that they have put in place improvements in work practices, manning levels and in the competitive structure to ensure that when competition arrives, they will be able to compete with best practices operated by the new generating stations. It is healthy to see that happen. It has meant that in recent years the consumer has been getting a better deal than was the case heretofore. Even at this stage, the advantages of competition are very much in evidence because of the changes which have taken place in recent years.

This Bill puts in place an independent regulator and will also open up 28 per cent of the market to competition. That equates to 320 companies which are the largest electricity consumers. That is a significant level of competition initially. As other speakers said, it will be important that the domestic consumer is not in any way affected as competition increases in the future and that they will also benefit from it.

I am pleased that a public accountability factor will be built into the structure of the Bill governing the appointment of the regulator. I understand the person appointed to the post will be accountable to a Joint Oireachtas Committee. It is necessary that those who discharge public office of such importance should ultimately be accountable to the Houses of the Oireachtas. In time this will be seen as a wise insertion in the Bill.

The Bill seems to envisage the construction of new generating stations by these new operators. It is important that the range of generating stations in operation at present, some of which may become surplus to the ESB's requirements, might perhaps be considered for some form of privatisation so that commercial bodies will have the possibility of acquiring some of them. Perhaps, in some instances, these stations may not have the most modern, up-to-date or competitive methods of generating electricity, but nonetheless they may well fill a niche in the market. I am thinking of places such as Great Island in my area, where employment levels are of significant importance to the social and commercial fabric of the district. These stations will continue only if they can generate at a competitive rate and are part and parcel of ensuring that customers and consumers get a good deal in the future. This should be looked at in instances where it might be achieved through the injection of private investment.

It is important also to ensure that the public utility, in this instance the ESB, is not left with the lower end of the market. I know the Minister, who has responsibility in this area, has been grappling with the question of deregulation of public transport. It is important to ensure that new entrants do not cherry pick the best customers and the easiest and most profitable businesses. They must take the share of the other services required to be delivered at national level. The challenge in the Bill, and to the regulator, will be to ensure that as policy evolves in the future, steps will be put in place which will require all the participants in the industry to share in the delivery of services to all those who require it. Operators must not be allowed to major in the most profitable and easiest sector of the market. How this is done will be a matter for those who are more informed on the topic than I am.

I support Senator O'Dowd's remarks regarding the environment. It is important, as we move towards a new century and new millennium, that the environment is uppermost in all policies delivered by industry, both private and public. This has not always been the case in the past. We must ensure that a policy on overground cables, which are unsightly and detract from the rural landscape and from streetscapes in most of our urban areas, is pursued. Obviously this issue cannot be resolved overnight but there should be a policy to ensure that the laying of cables underground becomes a matter of policy in time. Perhaps with the numbers availing of the national grid, there is an opportunity for the regulator, the Minister and the Department to apply more stringent guidelines, if not directives, in this area. This is something to be welcomed, as is the fact that the Minister has sought to ensure that the cost of setting up the regulator's office will be borne by the industry, not by the taxpayer.

I welcome the Bill. It is a significant step forward, as is much of the legislation introduced by the Minister over the last two years since I came to this House, in ensuring there is competition which will be sustainable into the future and which will protect those who have delivered the services in the past. This Bill will be seen in the future as very important legislation.

I welcome the Minister to the House to debate this important Bill. The Bill will give effect to the EU directive which provides for competition in 28 per cent of the market by Feb ruary of next year and 33 per cent by the year 2003. In that context, it must provide for the establishment of a commission to oversee the regulation of electricity. The commission will also have the power to issue licences to generate supply, construct generating stations and allow access to transmission and distribution of services. These are important issues which are unprecedented in the area of electricity generation, transmission and distribution. Therefore, it is important that we get matters right in relation to how this operates.

The Minister in her speech acknowledged the sterling work done by the ESB over many decades in relation to providing energy to the domestic householder and to industry and commerce. It carried out this work in a very efficient manner. I remember when the rural electricifation scheme was introduced in Sligo and throughout other parts of the west. It is not very long ago since there was no electricity in many parts of the country. The younger generation would find this incredible because so many activities now depend on the generation of electricity. Much of our commerce and social and economic life is determined by ready access to sources of energy generated by electricity.

The track record of the ESB has been tremendous. It has been extremely successful in exploring different areas of electricity generation, beginning with hydro electricity in Ardnacrusha and going on to peat and oil. Nowadays, electricity is generated by renewable sources of energy such as wind and wave. I am pleased that one of the functions of the Bill is to explore and promote the use of renewable, sustainable or alternative forms of energy and to take account of the protection of the environment.

I am concerned that while this forms part of the functions of the legislation, it will be extremely difficult to carry out. If we open up to competition a considerable chunk of the electricity generated at the new stations, we must consider the conglomerates lurking out there and waiting to get in on the playing pitch. These people are not thinking in terms of small-scale renewable energy sources. They are thinking in terms of providing large amounts of the most cost effective energy. They would look at doing so by the most cost effective means, which is currently the gas turbine. I would like the Minister to expand on whether the combined cycle gas turbine is the main generation means in which there is interest from the international conglomerates. If that is the case, will it not in all cases out-price what is currently available to the consumer from Moneypoint, the peat stations or the hydro-stations still in use? Will the newcomers effectively put all their eggs in one basket by choosing one type of electricity generation? That could erode the Irish market and make it more difficult to consider more expensive methods of renewable and alternative energy generation. This could mean the State will subsidise these means and return to the market, while part of this procedure is about liberalisation and opening up to competition. We will find it more difficult to consider renewable sources of energy.

I would like the Minister to deal with the section which provides for the commission to investigate and promote renewable and alternative sources of energy. How does she envisage that might be done? This Bill is not about this issue, it is about implementing the EU directive on liberalisation and competition within the Irish electricity industry. There is a contradiction which has not been explained to date and I would like the Minister to give her views on the matter.

If we have this type of turbine generator and many operators in the market, obviously there will be excess capacity quite quickly. How will that be dealt with? Will it be dumped on the market? Does the Minister intend to further open up the market more rapidly than was envisaged. The Minister is unlikely to be in her present position in 2003, unless she too is renewable.

I am very renewable.

I would not bank on that.

Neither would I.

The Government will have to be renewed and there will be an election between now and then. Between now and 2003, new amending legislation allowing for further competition could be introduced and I am interested to hear whether the Minister is considering that.

I am concerned about the outcome of the opening of the market. I acknowledge we are accepting it through the EU treaties and there is no way around it. However, we have our own electricity generation. Two thirds of our electricity generation comes from Moneypoint which is oil fired. With one third of power coming from the new stations, it seems there is no place for anything in between. How will we manage the peat, hydro, wind and, hopefully in the future, wave electricity generation stations? They seem caught in a bind where they will find it difficult to keep their heads above water and be cost competitive.

What will happen to the workforces? I presume the Minister has been in negotiation with the trade unions in the sectors affected, including Bord na Móna and the ESB. I would welcome a response from the Minister on these concerns.

Accountability is a key issue. The regulator is not so much an independent regulator as a regulator with a degree of independence who is answerable and accountable to the Minister, the Joint Oireachtas Committee and the Comptroller and Auditor General. That is essential. For too long we have allowed areas of important national interest to be subject to a democratic deficit by passing on responsibility from the democratically elected Houses of the Oireachtas to independent commissioners or operators. This is true, for example, of the planning process. We have taken that entirely out of the hands of elected people, which is a dangerous development, and given it to county and city managers or An Bord Pleanála. Democratically elected representatives have no say in the manner in which planning applications are treated. I am glad the Bill provides for a substantial degree of accountability to the Minister and the Houses of the Oireachtas. It is one way to observing how the regulator is doing his business. I congratulate Mr. Reeves who, as the Minister said, was poached from her Department. I am sure he will do a good job.

The prohibition on nuclear fission being used in electricity generation is a welcome amendment to the legislation. I was glad to see how many amendments the Minister accepted and was open to discussing in the Dáil. They have improved the legislation. How will the nuclear fission amendment be implemented? Can it be guaranteed that all stations created will be on Irish soil and free from any form of nuclear energy? Nuclear power is used in most parts of the European Union and in many countries it is a major form of energy generation.

For example, New York was supplied exclusively by nuclear energy and constantly had blackouts and brownouts. Many US cities are in the same position. They decided to move away from the provision of electricity by private independent generators to municipal electricity provision to guarantee a supply to the city. Since then, New York has ceased to have the perennial blackouts and brownouts it used to have.

It is not all rosy in the private sector. The Minister is a great proponent of privatisation. However, she would not use that term; she would say she is a great proponent of competition. We are talking about competition initially but in effect we are talking about the eventual privatisation of the ESB. There will be pressure with excess capacity, big multinationals and the enormous capacity they can generate. They will squeeze out the alternative systems currently in place with which we are experimenting successfully and more of the electricity grid will be sought by the large players who will be able to out-price locally generated electricity.

A ludicrous position exists with the telecommunications network and the onset of the mobile phone. We are experiencing problems with the erection of mobile phone masts, opposition to that and the inability of the State and the private sector to use the same distribution network. It will not be cost effective if we establish new grids for distribution. The roads in Dublin have already been torn up to put power lines underground and this is adding to traffic gridlock.

A number of appeals were made here to put the electricity distribution grid underground and to get rid of the overhead cables. One can imagine the difficulty that would cause throughout the country, particularly if there was one grid for the ESB and independent grids for the companies which will get the contracts. The Bill does not deal with that. Will the regulator have powers to recommend a common policy on the most cost effective and environmentally desirable means of distributing electricity throughout the country? If not, there will be a plethora of cables and other structures to distribute electricity.

The Bill is not totally welcome because I am concerned about its implications. I am worried that a natural utility will be open to privatisation. I have no difficulty with competition but it must deliver a better service to consumers and it must not open up the market in the same way as the telecommunications network which caused headaches. We all hope the flotation of Telecom Éireann will be a great success. I am sure the Minister will not tell us the price of the shares.

I am not allowed to do so.

That would be too much to expect. I am concerned there will be problems with the distribution of electricity and that the work done by the ESB and the plans we have to extend environmentally desirable, renewable and alternative forms of energy might not be developed in the way we would like and which would be essential for the sustainable development of our energy resources.

Mr. Ryan

I am our party's spokesman on this issue and I should have dealt with the Bill, but I had domestic obligations. Senator Costello did an eloquent job on my behalf. I did not mean to be discourteous to the Minister and I am sure she did not miss me.

I am glad to see the Senator.

Mr. Ryan

This process is a fact. Senator Costello mentioned the apparent beginning of a trend in the United States back towards public ownership of certain utilities on the grounds that they provide security of supply. Let us not let ideology, whether it is on the left or the right, drive us in the opposite direction to where common sense would dictate we should go. Pragmatism was the mark of the Minister's party for most of its existence and I hope it retains that.

We have an ideology of competition yet where it has applied, it is difficult to quantify savings to the customer, with one exception. If one reads comparisons between Esat and Eircell on which is cheaper, nobody, not even the most sophisticated analyst, could tell a customer which is better. We are tied into an enormous mess of marketing strategies, short-term subsidies and costings that only an accountant with considerable sophistication could work out.

Competition may be good fun and perhaps the argument is that it keeps prices down. I am not too concerned about mobile telephone customers, including myself, and whether they are charged over or under the odds, but I have considerable doubts about whether one, two or three organisations in the market will make an enor mous difference. It is also obvious that nobody can say with certainty whether BUPA or VHI is more or less expensive. It appears that both are putting up their charges at similar rates or are adjusting the increases in different ways or coverages. To suggest there is a wonderful magic wand called competition which produces spectacular savings to consumers is nonsense. Anyone who has dealt with car insurance knows that no matter how many participants are in the marketplace, the cost of motor insurance keeps increasing.

We should not get carried away with competition as an ideology. It is an interesting idea and it works in certain areas but only under certain circumstances. The classic example is Ryanair and airfares. Nobody would argue in defence of the scandalous cartel which used to exist on the Dublin-London route between Aer Lingus and British Airways. This was a joint conspiracy by Mrs. Thatcher to beef up British Airways prior to privatisation and Aer Lingus to suit itself and it abused Irish consumers. Ryanair was the beneficiary of the ending of the cartel, not the cause of it. The first thing British Airways did once the cartel was ended was to get off the route. It has now returned via a private contractor.

I am a great believer in certain things in terms of quasi-monopolies. The first is transparency, the second is the use of benchmarking in which performance is measured against other equivalent organisations around the world and the third is an audit of efficiency – I do not mean a cash audit but an audit in terms of technology which can be done by peer group review. In that way, large inefficient organisations can be made more efficient.

It is ridiculous, for example, to suggest that competition makes pharmaceutical firms more efficient because each, by definition, has a separate niche in the market and makes its money from a product which is a monopoly. Every pharmaceutical company makes the most of its profits with pharmaceuticals which are in patent and is therefore a monopoly. To suggest that competition regulates price is nonsense. We should not let ideology get in the way of reality.

I am interested in the comments made by the regulator designate about what people love to call rebalancing, which means that domestic consumers will have to pay more so the ESB can withstand the competition for the provision of electricity to large consumers who represent 28 per cent of the market. Why it should be a good thing for the domestic consumer to provide yet another dollop of corporate welfare is beyond me. It is not that domestic electricity is being subsidised – it is not an unprofitable sector – but that the distribution of cost and the margin regarded as acceptable will be squeezed where there is competition and will, therefore, be rebalanced in the direction of domestic consumption. We will go from having spectacularly low domestic charges, by international standards, to what is more or less the norm in the UK. We would want to be careful because many of the privatisations and competition exercises in the United States have been far from wonderful successes. They are moving towards an oligopoly in the UK, where three or four organisations will own not just electricity but gas as well. One of the existing natural forms of competition in this State is that the provider of electricity is in competition with the provider of an alternative source of energy, particularly in domestic services. Essentially we will have almost a private sector monopoly. I do not know what benefit that will be. I would be interested to learn the provisions the Minister has to ensure that we do not have a gradual quasi duopoly between one private sector operator and the ESB, with a regulator.

From my experience, the regulator of the telecommunications services is far more concerned about the industry than about the consumer. I was in correspondence with the regulator of telecommunication affairs about the appalling performance of the cable television service provider in Cork, which is the dearest in the country for reasons that have nothing to do with current reality and provides an appalling service with a deliberate provision of service in a way that means it was impossible to use a modern video recorder and preprogramme it. The telecommunication regulator agreed that this was terrible but the company had promised her it would do better in the future and therefore she did not propose to do anything about it. What that means is that consumers come second.

If this whole process has any purpose, it is supposed to protect consumers and if it does the opposite and the regulator simply makes sure that the big companies behave themselves, it is of no benefit. The Minister knows better than I that the ESB unions have a very forward looking vision of how electricity should be generated, but I am concerned that we will lose sight of reality in the move to innovative methods. I agree it was never a sensible idea to have the ESB as thede facto regulator of electricity generation, and similarly it was never sensible to have Aer Lingus as the regulator of air travel. I am very glad we have moved away from that.

Wearing my engineer's hat, I am worried by the precedent being set by inserting in legislation a technical definition on something as technologically variable as CHP. I am not claiming to be an expert on it. I know there are reasons to do with politics, but it is very dodgy territory. I am unhappy with the phrase "thermodynamic" and I would have much preferred "energy transformation from an integrated thermodynamic process."

That came from an engineer.

Mr. Ryan

We do not have to agree. I think a more accurate phrase is "an integrated energy transformation process". I am quite happy with the emphasis on CHP and the 70 per cent which prevents us being conned by chancers pretending they are running CHP when it is simply—

We nearly were on Committee Stage.

Mr. Ryan

I know the history. CHP will not last forever, it is a process.

I understand.

Mr. Ryan

To end on a positive note, I congratulate the Minister on the reference to the Freedom of Information Act. It is the first Bill in which a new State body is being set up in which the Freedom of Information Act is integrated as a normal part of operations. The Minister is to be complimented as some of her colleagues did not show the same vision. I congratulate her on the nuclear fission issue. However, I share Senator Costello's concern about Northern Ireland electricity competing using a nuclear power station, north of the Border, because there are all sorts of hidden subsidies in nuclear power apart from the environmental issue. Why did the Minister leave nuclear fusion out of the prohibition? Perhaps she knows something that I do not know about it. The great future is supposed to be in coal fusion.

I would have preferred a stronger emphasis on the environment than will follow from the phrase "to take account of the protection of the environment." I believe a central function in energy generation is the issue of the environment and one of our major future problems will be greenhouse gases.

I thank Senator for their expressions of welcome and their contributions to the debate. The contributions from Senators Fergus O'Dowd, Liam Fitzgerald, Madeleine Taylor-Quinn, Jim Walsh, Joe Costello and Brendan Ryan are strong evidence of the importance of the legislation.

I will try as best I can to answer some of the questions raised. Senator O'Dowd raised the issue of domestic consumers, a thread which ran through the contributions, who will continue to be served by the ESB, which will continue as a public electricity supplier. We are keeping in line with the minimum requirements of the Directive and the first 28 per cent is for the big boys and it then unfolds year by year until there is full open competition. A Bill to implement the further part of the directive will be introduced in the autumn.

Senators O'Dowd, Liam Fitzgerald and Ryan also raised the question of price. When I took office in June 1997, two years ago, a mechanism had been agreed by the previous Government to deal with price increases in the years 1996-98, with agreement on a 3 per cent rise in 1996, followed by a 1 per cent rise in 1997 and in 1998 there was to be a 2 per cent rise in electricity rates for consumers. We have the third lowest rate in Europe for domestic consumers and forth lowest rate for commercial and industrial users. Tariff rebalancing was an element of the percentage increases and I expect the rates are based on usage rather than on transmission costs. The ESB had made a profit of £170 million in 1998. I could not see how a price rise was justified in the circumstances and I refused to allow it. The ESB did not look for a price increase this year. Domestic consumers in the North are paying 16 per cent more. We spoke about forging stronger North- South links if they would come South to use electricity.

We will have to keep a close watch on pricing. It is portrayed that the consumer is being subsidised by the industry. That is used as a justification for tariff rebalancing. The regulator knows my view of the price increases.

There are other public utility bodies that need price increases. An example is Bus Átha Cliath whose ticket prices have not been increased in nine years. The ESB has made a profit of £200 million this year.

Senator Liam Fitzgerald made some interesting comments. He gave a vivid description of his early life spent in west Limerick.

The hillsides.

He is a gasúr but he remembers the arrival of rural electrification. He described the wonderment that he and his brother felt when they witnessed the lights being turned on. His memories were so vivid and real. He talked about the ESB's past and its future. He also mentioned the need for that spirit of endeavour to be kept alive within the ESB because it was such a primal force when it was set up and it continued in an historical sense through every worker. There are marvellous lines written in the book, "The Hidden Revolution". One particularly good reference is about the men who climbed the poles and put up wires in the wind and rain. The words used to describe that scenario are evocative and strong. They are also real because they describe what actually happened.

Senator Taylor-Quinn asked about the adequacy of supply. The commission will have a duty to ensure that the whole country has an adequate supply of electricity. There was also a question about the number of commission staff and whether it should be increased. I am sure the commissioner will be able to look after staff numbers. Senator Taylor-Quinn also mentioned the need to ensure that no one is disenfranchised with the onset of competition in regard to the electricity supply.

Senator Walsh referred to pylons. It is an increasing problem. The Senator is from Cork and knows what is going on there. Whilst the court has sat it will not give its indications until the autumn. This is democracy and we all tip the forelock to it. We would never have had the electricity throughout the country if we had all been as democratically literate as people are nowadays. When you drive home in the evening you can see pylons across the fields. It is good to know that cow sheds houses and barns throughout rural Ireland have power. If people wanted to connect power to cow sheds etc. I doubt if they would get it because of the planning process and the fact that democracy is in vogue. There has to be some point at which people know something is necessary on a national level. I visited a rural part of County Cork the other night and I could see lovely fields and vistas with large pylons. It was good to know that those people had power supply.

Senator Walsh wanted to know the cost of underground transmission lines. I have been told that they are ten times the normal cost. All the towns and villages that have won awards in the Tidy Town competition have made an attempt to put their wires underground. That measure seems to have worked out for them.

Senator Costello wants renewable energy sources promoted more. The rainbow Coalition of 1996, made up of the Labour, Fine Gael and Democratic Left parties, strongly expoused the cause of renewables. It made that a central feature of a Government decision taken at that time. The future of peat will be assured by a public service obligation. I know this issue has given rise to some concern.

The Senator also referred to older stations and the effects emerging competition will have on employment. For the past number of years the ESB has conducted a cost and competitiveness review. They have worked through those difficulties but there still remains a lot to be done.

I read an interesting article on the US which stated that there is a swing back towards public ownership. I share the philosophical concerns expressed by Senator Ryan but we are not our own masters or mistresses when it comes to this issue. I know the Senator may have different ideas about the EU—

Mr. Ryan

I used to have, but I am not allowed to have them any more.

That is one of the penalties for becoming mainstream and coming in from the margins. I do not mean that an Independent is a marginal person because I am referring to joining the mainstream parties.

We got a one year deregation but we are still implementing the directive in a minimalist way. Senators Liam Fitzgerald and O'Dowd touched upon this issue. We all know what happened in the 1980s during the so-called Thatcherite revolution. It turned out only to be a revolution for the few and the fat cats became extremely wealthy. The water supply was privatised and people did not get better supplies. All during this summer period people living in the various water authority areas will be subjected to water shortages. The quality of the water is not what it should be. I thought about another example of privatisation when the Senators were speaking but I cannot think of it now.

We have been slow to join the era of competition but we are doing so now in a rigorous manner. It will not be an overnight phenomenon and employees and consumers will have time to become accustomed to competition. I do not share the Members views that competition is bad. On the contrary, I think it is good.

Aer Lingus was referred to earlier. The cost of one of its flights to London was about £300 more than it is now. All its fares were reduced. As a result of the reduction in fares all our constituents can visit a daughter in Boston or a son in New Zealand or anyone in distant lands because it is within their reach financially if they save up.

I share the point of view of Members that the consumer has to be of central concern. If it is not good for the consumer then it is good for the fat cats. I understand that people have to make a profit. There is nothing wrong with that, nor with business, but if the consumer is not at the centre of the picture with regard to public utilities then the picture will become distorted and competition will not have achieved what it set out to do.

Last night on Report Stage in the Dáil we talked about a consumer access complaints procedure. It is part of the second half of the directive and I will include it in the next Bill in the autumn. The procedure should play a central role. The regulator is concerned with economic matters, ensuring that the wheels of industry move and looking at competition as it unfolds. At the end of the day, however, thousands of ordinary folk want to boil their kettles and grill their rashers. All that takes power. They need to have their needs and their wants observed and properly seen to as well.

This debate is timely. I am worried about the issue of tariff rebalancing. I do not understand it. I think it means that they feel the consumer will have to pay more because they are giving "buckawatts" to industrial consumersvis-à-vis the modest requirements of a domestic consumer. It is a whole which must viewed as such, and the consumer must be the focus. There is no point in replacing a public monopoly with a private monopoly. There must be diversity of ownership and I hope that will be achieved.

I thank Senators for their contributions to the debate. I also thank my officials. Debates in this House give rise to issues which sometimes do not emerge in the Dáil or on Committee Stage and I look forward to tomorrow's debate.

Question put and agreed to.

When is it proposed to take Committee Stage?

Committee Stage ordered for Thursday, 1 July 1999.
Sitting suspended at 1.42 p.m. and resumed at 2.15 p.m.