Dáil Éireann Debate, Tuesday - 25 March 2014
624. Deputy Michael Healy-Rae asked the Minister for Communications, Energy and Natural Resources the way the ESB can stand over the ever increasing costs of energy to hard pressed householders at a time when they made a profit of €415 million and they continue to raise their prices by a further 8%; and if he will make a statement on the matter. [13914/14]
View answerResponsibility for the regulation of the retail electricity market is a matter for the Commission for Energy Regulation (CER), which is an independent statutory body. I have no statutory function in the setting of gas or electricity prices, whether in the regulated or non-regulated parts of these markets. Since 4 April 2011, prices in the electricity retail market have been fully deregulated and business and domestic customers may avail of competitive offerings from a number of electricity supply companies. Price setting by ESB's Electric Ireland and all other electricity suppliers is a commercial and operational matter for those companies operating in that retail market. Electricity and gas costs in Ireland are influenced by various drivers, including global gas and oil prices, the costs of capital, exchange rate fluctuations, and the small size of the Irish market. The wholesale price of gas is the most significant factor in the case of Ireland for electricity and gas. This has risen steadily since 2009 driven by events such as those in the Middle East, North Africa and Japan.
ESB’s profit after tax and before exceptional items was €415m in 2013. This was an increase on the previous year due to a number of factors including payroll savings of €51m and a higher energy margin of €60m, of which two thirds relates to the regulated network business.
In October 2013, ESB announced a price increase from 1 January 2014 by Electric Ireland in order to absorb the additional costs arising from higher fuel and network charges. The increase was also intended to absorb the cost of the increase in the Public Service Obligation (PSO) levy which was approved by the CER to take effect from 1 October 2013. ESB stated at the time of its announcement that the company was conscious of the cost pressures being faced by its customers and the aim was to keep increases to customers as low as possible for as long as possible. However, costs are increasing due to factors outside Electric Ireland’s control.
It is worth noting that ESB paid an interim dividend of €68.4m to the State in addition to a special dividend of €161m in January 2014 out of proceeds from the sale of overseas generation assets in 2013. The Board has recommended a final dividend payment of €28.8m, bringing total dividends for 2013 to €258m and to €1.2billion over the past ten years. I would also highlight that ESB contributes substantially to the Irish economy every year through dividends, investments, taxes and jobs. ESB provides significant employment both directly, with 7,500 employees, and indirectly through contractors and service providers.
