Dáil Éireann Debate, Tuesday - 13 June 2023
175. Deputy Eoin Ó Broin asked the Minister for the Environment, Climate and Communications further to Parliamentary Question No. 279 of 26 November 2009, to detail where in the Government books is the €176 million special dividend from the ESB from 2009, accounted for as received and allocated. [27423/23]
View answerAny decision by the Board of the Commercial Semi State Bodies regarding declaration of a dividend is agreed jointly between the Body, my Department and the Department of Public Expenditure, NDP Delivery and Reform (DPENDR). Dividends are not voted expenditure and so do not fall within the Estimates or Revised Estimates process.
My Department does not have a role in the allocation of ordinary dividends. These dividends are paid by the State Body directly to the exchequer, and the Department of Public Expenditure, NDP Delivery and Reform has responsibility for its allocation. With regard to the €176m special dividend, the Minister for Finance and I, as Shareholders, further requested that the proceeds of this special interim dividend would be paid on our behalf into a special fund established by ESB, from which the Large Energy User Credit could be drawn down by ESB in order to finance this credit.
ESB disbursed funds to EirGrid on a monthly basis following appropriate validation of requested amounts. ESB provided monthly reports to my Department on the financial status of the special fund.
In August 2010, I wrote to the Chairman of ESB requesting that by 30th September 2010, any sums remaining in the “Special Interim Dividend” bank account be transferred to the relevant bank account of the Commission for Energy Regulation, from which future payments to Large Energy Users would be made. The balance remaining in the account including accrued interest up to 30th September 2010 was €58,351,824.58 and this total was transferred to CER Carbon Levy Account on that date.
The rationale at the time for the measure was high Irish energy costs remaining a significant concern for all sectors of the economy, having risen significantly above EU average in previous years, despite global energy costs declining in 2010. This was primarily due to structural factors including Ireland's high dependence on imported fossil fuels, geographic isolation, a small and widely dispersed population and programmes of very significant investment in energy infrastructure, following two decades of under-investment in the networks. Recognising the concerns of indigenous business and the inward investment community, the Government put in place a number of measures to mitigate the cost of energy for business. All electricity users benefitted in 2009 from direct subsidies totalling €567m. These were made up of an ESB rebate to consumers of €315m, a repayment of certain Public Service Obligation (PSO) levies of €87m and the deferral of some ESB network revenues until after October 2009.
Following the 2009 Government Decision, the CRU, then the Commission for Energy Regulation (CER), published Information Note CER/09/117, which is attached for reference. This note outlines the CER decision to continue the rebate scheme set out in Information Note CER/09/002, also attached, for all LEUs to ensure they did not face any rise in their network tariffs.
The following extract is taken from the CER Information Note CER/09/002, which sets out the details of the rebate mechanism.
"PSO Related Rebate Monies from the sale of some ESB power stations under the CER-ESB Asset Strategy agreement will be rebated to all customers. Some of these generation stations received support through the Public Service Obligation (PSO) mechanism and following their sale a rebate can be given to all electricity customers in 2009...
While the above contributions have offset price increases for ESB Customer Supply customers, they also benefit customers of all Independent Suppliers. Both rebates will be passed from ESB through the networks companies, EirGrid and ESB Networks Ltd. to suppliers who will distribute them to their customers."
This rebate mechanism was continued for the 2009/2010 tariff year, as outlined in the CER Information Note CER/09/117.
The following extract from CER Information Note CER/09/117 outlines the value of the rebate scheme for LEUs. The CER determined this as a targeted response to the industrial competitiveness concerns arising during the economic circumstances that pertained in 2009.
"The Government have stated their continuing concern about the impact of energy prices on Large Energy Users (LEUs), who contribute so substantially to employment and are particularly affected by electricity prices. It has therefore been decided that there will be a continuation of the rebate scheme for LEUs.
This should ensure that LEUs do not face any rise in their network tariffs from October 2009. The rebate will comprise: 1.5003 cent/kWh and €8.63/kVA per annum for the period 1st October 2009 to 30th September 2010."
The amounts received depended on the energy consumed by each LEU in that period, and the rebates were passed through the network companies, EirGrid and ESB Networks Ltd.
The Commission for Regulation of Utilities (CRU), which has full independent responsibility to regulate network charges, provides a dedicated email address for Oireachtas members. This enables members to raise questions directly to the regulator for timely reply. If further clarification is required on the above, please contact oireachtas@cru.ie.
