I move: "That the Bill be now read a Second Time."
The purpose of this Bill is to enable additional assistance to be given from public funds towards the cost of connecting some isolated houses in rural Ireland to the electricity supply.
Rural electrification was first commenced in 1946 under the provisions of the Electricity (Supply) (Amendment) Act, 1945, which authorised capital expenditure by the ESB on the scheme. In the past 30 years some 420,000 houses have been connected to the rural network at a total cost of about £80 million, some £27 million of which represent State subsidy, the balance being met by the ESB.
The total of 420,000 houses represents some 98-99 per cent of all rural houses and compares favourably with the connection rate elsewhere. In Britain and the United States of America the connection rate is believed to be about 98 per cent and 98.4 per cent respectively, whilst on the Continent generally the connection rate is somewhat less. It is only in countries such as Germany and, possibly Switzerland and Sweden, that the connection rate in rural areas exceeds the 98.99 per cent level.
What is known as the final phase of the rural electrification scheme was undertaken over the four years 1971-75 to give every unconnected house in rural Ireland a final opportunity of obtaining electricity supply on subsidised terms. The programme was well publicised and at some stage during the four-year period every rural householder then unconnected to the electricity supply had an opportunity of obtaining electricity supply on subsidised terms. The final phase was officially closed on 31st March, 1975, that is, no further applications for subsidised supply were accepted after that date, but subsidised terms have yet to be quoted by the board to applicants in a few areas whilst construction work remains to be done in these and some other areas. However, all householders in each of these areas where work remains to be done, whether already quoted terms or not, who applied and qualified for subsidised supply before 31st March, 1975, will still get supply on subsidised terms.
Under the final phase of the rural electrification scheme the board looked for the very modest rate of return of 5.2 per cent on their capital outlay or investment in providing supply to each house. The board were prepared to meet, subject to a limit of £750, the capital cost of providing supply to any house or premises. If the applicant's ordinary annual fixed charge which every consumer pays, usually about £12 per annum or so in rural Ireland, was not sufficient to cover 5.2 per cent of the cost of connection, the applicant was required to pay what was known as a special service charge. The amount of the special service charge in any one case was the difference between the ordinary fixed charge and the sum representing 5.2 per cent of the cost of connecting the house in question. For example, if a house cost £500 to connect, the ESB would look for a return of £26 per annum that is 5.2 per cent on their investment of £500. With a fixed charge of, say, £12 per annum this would mean that the special service charge payable by the applicant would be £14 per annum in six two-monthly instalments of £2.33 each.
In those cases where the cost of connecting a house exceeded £750 the board required the prospective consumer to meet by way of lump sum payment part of the cost of connection, as determined by the board. This lump sum payment was known as a capital contribution and, in effect, represented the non-recoverable part of the connection costs above £700 which would arise in the event of the consumer refusing or ceasing to take supply shortly after having the house connected. The ESB adopted this arrangement in the light of working experience.
During the final phase of the scheme some householders, mainly in the Black Valley area of County Kerry and the Ballycroy area of County Mayo, found themselves unable to accept the board's offer of subsidised terms, involving payment by them of substantial sums by way of capital contribution. Precise figures of the number of such householders are not readily available but the ESB have estimated that, in all, there are some 800-900 such householders in these and other isolated areas. This is not a definitive figure as there are also individual houses in this category here and there throughout the country and the final total may well be more than the ESB estimate.
While any scheme of rural electrification will throw up anomalies the plight of the Black Valley and Ballycroy householders is probably the worst of the unresolved anomalies revealed at the closure of the final phase of the scheme. These householders can reasonably be regarded as unfortunate in that, through no fault of their own, they live in areas where the cost of connecting them to the electricity supply, even under subsidised terms, is substantial. The cost of connection under normal economic or unsubsidised terms would of course be very much higher. All, or nearly all, of the houses in question were built when proximity to the electricity supply was not an obvious factor to be taken into consideration when selecting a site for a dwelling. The practical effect of the Black Valley and Ballycroy householders' inability to accept the subsidised terms of supply offered to them in 1971-75 is that they do not now have available to them a service which is widely regarded as a basic amenity of life. They represent, by and large, the "hard core" or outstanding balance still remaining of the unconnected rural houses which the subsidised rural electrification scheme was intended to benefit. To leave them unconnected to the rural network now would, to some extent at least, vitiate the whole purpose of the rural electrification scheme which was to bring the benefits of electricity to all parts of rural Ireland. The scheme was not limited, and was not intended to be limited, only to the parts of the country where connection was relatively inexpensive.
The Government are, in all the circumstances, prepared to recommend approval to the provision of additional moneys to enable the Black Valley and Ballycroy householders, as well as others in the same category throughout the country, to obtain electricity supply on terms comparable, by and large, to those generally available to applicants under the final phase-1971-75—of the scheme, but with a special concession in relation to payment of capital contributions. Briefly, what is in effect proposed in this Bill is that these housholders, that is the householders who refused supply under the final phase of the scheme because of the requirement to pay capital contributions, will be given a further and final opportunity to obtain supply on subsidised terms but, this time, without having to pay a capital contribution. In so far as provision of supply to them is concerned they will only have to pay an annual or standing charge of £36.40 in six two-monthly instalments. This standing charge, which may from time to time be subject to review by the ESB in accordance with the board's normal criteria for review of fixed charges, is inclusive of both the usual fixed charge and the special service charge; if there is no review by the board the standing charge remains unaltered.
Apart from charges for electricity consumed or for instalment payments, if any, in relation to electrical appliances and so on that may arise, no other charges will be payable by them. The appropriate capital contributions which these householders would otherwise have had to pay to the ESB under subsidised terms will be paid on their behalf to the board out of the Vote for my Department. At this stage it is not possible to indicate with certainty the aggregate of all such capital contributions, because costs of connection are rising all the time, but the sum of £300,000 being provided in the Bill should meet the requirements of the scheme.
This is a once-for-all scheme of limited application intended to deal with a special case of localised hardship which, because of the nature and extent of the anomaly revealed under the final phase—1971-75—of the rural electrification scheme, merits special consideration. To eliminate all anomalies in a scheme of rural electrification which covered the whole of the country would be a virtually impossible task and involve an unacceptable drain on the Exchequer. In taking steps to eliminate this anomaly the Government feel that they are going as far as they can reasonably go in all the circumstances. Government expenditure on rural electrification down the years has been, in the aggregate, very substantial and further expenditure other than that now proposed could not be justified.
The details of the proposed scheme are now being worked out but, broadly speaking, what is envisaged is that a reasonable period will be set during which applications from the householders in question for benefit under the scheme will be accepted by the ESB who will then proceed as quickly as possible to provide supply, after issue and acceptance of quotations, which will not include capital contributions. When the work has been finished subsidisation of electricity supply in rural areas will then finally come to an end and normal economic or unsubsidised terms of supply will apply from then on.
Whilst I must, because of Exchequer constraints, set my face against any further extension of the rural electrification scheme, I am very conscious of the heavy financial burden which can be involved on householders, both persons building new houses as well as existing householders not already connected, in meeting the cost of connecting their houses to the electricity supply. I am pleased, therefore, to announce that, in order to ameliorate such burden, the ESB have at my request agreed to introduce a scheme of deferred payments for costs of connection to the electricity supply in cases where subsidised terms are not available. Full details of the scheme will be made available shortly but at this stage I can say the scheme will, broadly speaking, provide deferred payment facilities up to a reasonable limit for all new applicants. Meanwhile, I must commend the board for agreeing to an arrangement of this kind which will go a long way towards easing the financial burden sometimes involved in obtaining electricity supplies.
I might also add my voice to the board's appeal to persons proposing to build new houses for prior consultation with their local ESB office before deciding on sites for their new houses. In very many cases consultation beforehand with the board can result in considerable financial savings. As Deputies no doubt readily appreciate, the cost of connection of any new house to the electricity supply is largely determined by its location in relation to the nearest electricity distribution centre. In recent months the board have been at pains to emphasise this and to encourage prospective new householders to inquire beforehand as to the cost of providing electricity before irrevocable commitments as to erection of homes are entered into. I can only endorse the board's appeal and reiterate the importance of prior consultation with the board's local office in all cases where erection of new houses is contemplated.
I recommend the Bill to the House.
