I move that the Bill be now read a Second Time.
This is a Bill containing miscellaneous provisions in respect of a number of unrelated matters affecting the Electricity Supply Board.
The main purposes of the Bill are:
(i) to authorise the increase to £120 m. of the present statutory limit of £100 m. on the expenditure which the Electricity Supply Board may incur for capital purposes other than the electrification of rural areas;
(ii) to authorise the increase to £32 m. of the present statutory limit of £30 m. on the expenditure which the Board may incur on the electrification of rural areas, and
(iii) to provide for the assumption by the Minister for Lands of certain functions at present exercised by the Minister for Transport and Power and of certain new functions relating in each case to the fisheries vested in the Electricity Supply Board.
Other matters provided for include:—
(i) removal of the limit of £25 m. on the amount which the Electricity Supply Board may borrow by the creation of stock or other forms of security;
(ii) the clarification of the Board's powers in relation to fisheries and of the arrangements for compensation for interference with fishing rights;
(iii) matters relating to the form of the Board's accounts and appointment of members of the Board;
(iv) increases in pensions of the Board's supperannuated staff; and
(v) establishment of a superannuation scheme for wholetime members of the Board.
In the explanatory memorandum which was circulated with the Electricity (Supply) (Amendment) Bill, 1953, details were given of the Board's programme for the increase of their generating capacity from 629 Megawatts to 1,042.5 Megawatts by 31st March, 1961. The cost of completing that programme, including ancillary transmission and distribution equipment, but excluding work chargeable to rural electrification, was then estimated at £53.5m., and to make full provision for the programme would have entailed raising the authorised limit of the Board's capital expenditure for general purposes to £120m. The Act of 1954 authorised capital expenditure by the Board for general purposes up to £100m. It was intended that further provision would be made when the need arose, that is to say, when the total of the Board's expenditure and commitments was nearing this limit.
The 1954 programme envisaged the addition of 413 Megawatts to the Board's generating capacity during the following seven years. This programme was based on the assumption that the demand for electricity would continue to increase at the rate of about 13 per cent. per annum, then prevailing. This rate of increase did not continue however and it became necessary to curtail the programme early in 1956. Later the rate of expansion in demand showed a tendency to recover and the provision of some of the capacity which had been postponed was undertaken.
At present the installed generating capacity of the Board is 728 Megawatts and further plant, which I will describe in a moment, will be commissioned between now and 1964. Planning for the expansion of generating capacity must commence many years ahead because it takes up to five years to bring a new power plant from drawing board to full operation. The generating plant requirements of the Board for the years from 1964/65 onwards were approved at the beginning of this year and a new programme of construction for the five years to 1968/ 69 has been settled. The programme from 1964 to 1969 is based on an estimated growth in the consumption of electricity at an average rate of seven per cent per annum. This was the rate of growth in the two years 1957/58 and 1958/59. Consumption in the year ended 31st March, 1960 was about 10 per cent higher than in the previous year; this higher rate of increase is attributable substantially to specific industrial requirements of a non-recurring nature, particularly the new oil refinery. The Electricity Supply Board are keeping a close watch on the trend of demand and the programme will be subject to alteration if the trend of demand warrants it.
Before the first plants in the new programme come into operation in 1964/65, the Electricity Supply Board will have brought into commission in the meantime at Rhode, Co. Offaly, and Bellacorick, Co. Mayo, 80 megawatts of new plants, all of which will use milled peat. This will increase the total generating capacity of the Board's plant to 808 megawatts. The new programme envisages the addition of a further 340 megawatts of which 160 megawatts will be fired by milled peat and 180 megawatts by oil, and provides for the absorption by 1968/69 of the annual output of all the bogs which are at present considered economically usable for the generation of electricity. Oil-fired stations will be sandwiched between peat-fired stations so as to ensure maintenance of electricity supply in a year in which weather conditions were very adverse for either turf or water generation of electricity or both. To ensure continuity of bog development and employment by Bord na Móna, the oil stations will be used only to the extent that water and peat generation is insufficient to meet demand. For the development and exploitation of the bogs in connection with this programme, it is expected that Bord na Móna will provide additional employment for up to about 1,000 men each summer falling to about half that number in winter.
All the more important rivers have already been harnessed for electricity generation. Stations on the remaining rivers would be uneconomical in present circumstances, having regard particularly to the high initial capital costs and current high interest rates. The Electricity Supply Board, however, are continuing to collect data and investigate other rivers with a view to possible later development for hydro generation. The Board have in operation a 15 megawatt generating station at Arigna using native coal and considerable quantities of native coal are also used at Ringsend station. Although the use of nuclear energy for generating electricity is not foreseen in the immediate future, the Board is keeping in close touch with developments in this field.
The programme of capital expenditure other than that for rural electrification approved by the Board already exceeds £100 million and they will require shortly to enter into commitments exceeding the present statutory limit of £100 million. The Board have, therefore, requested that the limit should be increased to £120 million, which they consider the minimum necessary to cover expenditure and commitments for the next four years or so.
The Bill raises by £2 million to £32 million the total amount which the Board may spend on the electrification of rural areas. It had been estimated that a total of £30 million would be sufficient to complete the scheme but a wider response in some areas than had been provided for has resulted in increased expenditure and it is now expected that by the time the scheme has been completed, in about another two years, expenditure will approach £32 million. As the scheme nears completion, the rate of progress has slowed down slightly but, nevertheless, forty areas were completed in the year ended 31st March, 1960, and the same number is expected to be done in the current year. At 30th September, 1960, 708 areas had been completed and there were only 84 areas in which work had yet to commence. The raising of the limit of £30 million to £32 million involves increasing the total amount of the subsidy which may be paid to the Board by £1 million.
The Board, in their annual report for the year 1959/60, point out that when the programme of rural electrification was decided upon, it was accepted that it would be an unremunerative service and that a 50 per cent. capital subsidy by the State was the minimum necessary to enable the scheme to be initiated. The alteration in State policy in relation to subsidy in 1955, resulted in the Board having to bear capital expenditure amounting almost to £9.5 million which it had expected to be met by subsidy and this, as the report indicates, has involved a continuing burden of more than £500,000 per annum on the finances of the Board. Moreover, the rural areas now being developed are the more uneconomic areas and the subsidy of 50 per cent. of the capital cost, which was restored in 1958, is not sufficient to enable supply to be provided except at a continuing loss to the Board.
The aggregate of losses on the Board's rural account in the past five complete years has amounted to £2.73 m. The loss in the latest year was £888,000 and this figure is expected to increase still further.
Surpluses on non-rural account have helped to offset the losses on rural electrification, but a nett deficiency of £195,000 in the Board's revenue emerged in the year ended 31st March, 1958. The nett deficiency in the following year, that is, in the year ended 31st March, 1959, was £99,000.
In the year which ended on 31st March, 1960, the surplus on the Board's non-rural account fell short of the rural deficit by well over £500,000 and, as a result, the Board showed an overall deficiency for the third successive year, the sum involved, in that year, being £433,000. The Board, accordingly, indicated that to put their finances in order an increase in charges would be necessary.
The statute clearly sets out the duties and responsibilities of the Board in circumstances of this kind. It is entirely the responsibility of the Board under Section 21 of the Electricity (Supply) Act, 1927, to ensure that its revenue will be sufficient to meet outgoings. In discharge of this responsibility, the Board recently announced an increase in charges which, I understand, will add approximately five per cent. to its total revenue.
The amount of the increase and the decision to apply it are entirely the responsibility of the Board, and I have no statutory function in the matter. I have been struck, however, by the fact that the average price per unit for all electricity sold by the Board in the year 1959/60 was only 36 per cent. above the corresponding price in the year ended 31st March, 1939. This compares with increases in the costs of gas, oil and coal over the same period ranging from 145 per cent. to 218 per cent. and with increases of 164 per cent. in the consumer price index, 232 per cent. in the wholesale price index, and nearly 230 per cent. in average earnings per week in industry.
The comparisons I have quoted and indeed the general record and reputation of the Electricity Supply Board reflect the efficiency and devotion to the public interest with which the Board and their staff have discharged their responsibilities. The Board are not complacent, however, and take every opportunity to increase efficiency further and reduce costs. I am glad to know that in these respects, the Board, like other forward looking organisations, are making use of modern techniques such as work study.
The limit of £25 m. on the amount which the Electricity Supply Board may borrow from the public by the creation of stock is being withdrawn. When the Board was first authorised to seek finance from the public, under the 1954 Act, a statutory limit was set to the amount which the Board might so borrow. Experience has shown that this limitation is unnecessary and the present opportunity is being taken to remove the limit. The prior consent of the Ministers for Finance and Transport and Power will, of course, continue to be required to each public borrowing operation by the Board.
Under existing provisions the Board have made two issues of stock totalling £15 million.
The Bill also makes provision for the assumption by the Minister for Lands of certain powers and functions in relation to the fisheries vested in the Electricity Supply Board. Some few provisions in existing legislation in regard to the Board's fisheries provide for the consent of the Minister for Transport and Power in certain cases, but, in general, the Minister for Transport and Power has no function in regard to the Board's fisheries nor has he available to him the information and technical advice which he would require to deal with any matter which may arise in regard to them, either in the Oireachtas or elsewhere. It is desirable, therefore, that the Minister for Lands, to whom the necessary information and technical advice are available, should be more closely associated with the administration of the fisheries and that the occasional questions which may arise should be dealt with by that Minister.
In the administration of the fisheries under their control, the Electricity Supply Board have concentrated mainly on the development of angling and commercial salmon fisheries and commercial eel and oyster fisheries. The position in regard to the trout and coarse fishing under the control of the Board has, accordingly, been under consideration by the Minister for Lands. Under existing legislation, the Board have extensive powers in the matter of awarding leases of trout and coarse fisheries but have comparatively rarely exercised these powers and, in the opinion of the Minister for Lands, the rights which the Board find possible to grant are inadequate to enable the lessees to develop these fisheries in a proper manner. The Minister for Lands desires that, in any case where it would be in the national interest for the Board to grant a lease in respect of trout or coarse fishing to the Inland Fisheries Trust or some other suitable body, he should have power to influence the Board in the matter. He considers that angling for trout and coarse fish should be on an agreed plan, in the devising of which he will seek the advice of a joint Committee representative of his Department, the Inland Fisheries Trust, Board Fáilte and the Electricity Supply Board. If the development of particular fisheries can best be achieved by leases of certain waters, the Minister for Lands should be in a position to indicate the term of years the lease should run so as to allow of adequate development and protection in each case. The Minister for Lands has made it clear that in the matter of leasing of Electricity Supply Board fisheries, the object would be to ensure as far as possible the full development of these fisheries. In this, due regard would be given to the salmon fisheries and their primacy recognised. I am satisfied that the arrangements now proposed will not compromise the management responsibility laid on the Electricity Supply Board and a provision has, accordingly, been included in the Bill to meet the desire of the Minister for Lands.
There are also three minor provisions in the Bill to repair defects in the legislation relating to the Board's fisheries:
(a) New Fisheries arising in E.S.B. waters:
Under existing legislation, the Board have powers to manage fisheries which they have acquired but they have no general power to manage new fisheries which have arisen, mainly in the reservoirs of hydro-electric schemes. Construction of the schemes was bound to destroy existing fisheries by submersion in the reservoirs and otherwise, and the Board had no option but to acquire them under Section 7 of the 1945 Act. On the basis that the fisheries would be destroyed no provision was made for their management. New fisheries have arisen and it is now proposed that the Board be given power to arrange for their preservation and maintenance.
(b) Compensation for interference with fisheries:
The destruction of fisheries interfered with the livelihood of a number of persons employed in fishing and Section 18 of the 1945 Act was designed to provide for the payment of suitable compensation to them. The measure of compensation laid down in the Act is such as is considered reasonable for total loss of profits or earnings and all persons who have so far received compensation under that Section did in fact suffer total loss of their profits or earnings. The Act did not, however, provide for partial compensation for persons whose profits or earnings were merely reduced but not extinguished. The establishment of an electricity generating station on a river may not immediately affect the earnings of such persons, but progressive diminution in the run of fish, attributable to the establishment of a hydro-electric station, may later occur and the earnings of such persons may be reduced. To provide for the case of such persons, the Board is now being authorised to pay compensation to them in proportion to the measure of their loss and to make further payments to them in the case of any subsequent losses until the total of payments reaches the compensation appropriate to total loss of earnings.
(c) Board's title to Shannon Fisheries :
The purpose of the third minor provision in regard to fisheries is to repair a defect in the Board's title to the Shannon Fisheries. It was intended that the Shannon Fisheries Act, 1938 would transfer these fisheries in toto to the Board but the relevant provisions were not effective to transfer any State-owned fisheries which might have existed in the waters of the Shannon. The present Bill proposes to confirm the title of the Board to all fisheries in the waters of the Shannon.
The Electricity Supply Board, being the first of our semi-State bodies to be set up, were inevitably burdened with some unduly rigid procedural obligations which later experience has shown to be unnecessary. Two of these are being modified in the present Bill. Firstly, the cumbersome procedure which requires members of the Board of the Electricity Supply Board, on the occasion of any alteration in their remuneration or allowances, to resign and be re-appointed, is being abolished. Secondly, it is proposed to abolish the requirement that the Minister for Transport and Power, with the consent of the Minister for Finance, should prescribe by regulation the time, place and method of conducting the audit of the accounts of the Electricity Supply Board, the accounts to be furnished to the Minister and the accounts to be published and put on sale. Modern practice has been to allow the responsible Minister to give an informal direction in such cases, and it is now proposed to bring the position of the Electricity Supply Board into line.
Further provisions of the Bill will allow the Electricity Supply Board to grant to their pensioners increases similar to those allowed to public service pensioners in 1959 and 1960.
The opportunity of the present Bill is also being taken to bring the legislation in relation to the superannuation of whole-time members of the Board of the Electricity Supply Board into line with legislation, enacted since the passing of the Electricity Supply Board (Superannuation) Act, 1942, in regard to the superannuation of whole-time members of the boards of semi-State bodies. The Bill provides that the Minister for Transport and Power, with the concurrence of the Minister for Finance, may make a scheme or schemes covering the superannuation of whole-time members of the Board. The schedule to the Bill sets out details of matters to be provided for in any superannuation scheme made under the provision.
I confidently recommend this Bill to the House. The Electricity Supply Board is one of the oldest of our semi-State bodies and one of the most effective. The success which has attended its efforts over the years, on which the management and staff deserve our most sincere congratulations, has in large measure contributed to the economic advancement of the nation in general. The enactment of this Bill will enable the Board to continue their good work.