Last night I welcomed the Minister's statement that it is now opportune to discontinue the fuel variation cost charge. That levy or charge has been causing great concern to consumers in industry and agriculture and to householders. The Minister has said it will be got rid of and I am glad he has promised an announcement to this effect in the next two weeks. One of the reasons for this, the Minister told us last night, is that no longer will we be so dependent on heavy fuel oil for electricity production. At the moment heavy fuel oil accounts for 40 per cent of the cost of electricity generation by the ESB. In 1978 it accounted for 66 per cent of the cost and the Minister has said that it could be reduced to about 30 per cent by the end of the decade. That is most encouraging.
One of the reasons for that projected reduction in the use of fuel oil is that the ESB have been diversifying from heavy fuel oil to indigenous resources. For instance, we have developed more bogs, we have the contribution of hydro power and now we have natural gas. In my constituency Bord na Móna have acquired 13,000 acres of bog and they hope to acquire a further 2,500 acres. They propose to set up a briquette factory in the area. This development will go a long way towards reducing ESB dependence on heavy fuel oil and it will provide as many as 600 jobs in the area.
Natural gas has made a significant contribution towards reducing dependence on oil. It now represents more than one-third of the material used in electricity production.
I should like to say a few words on ESB price reviews. In the past year we have had a price increase of 25 per cent in electricity charges and there were similar increases in previous years. I am glad the Department of Energy and the ESB have a projected figure for this year which will stabilise the increase in single percentage figures. This is good news for all consumers but particularly for small industries, firms who have been trying to achieve stability of costs so that they can plan for the future. Of course they were hindered by the high cost of electricity. Numerous representations were made to the Department of Industry in efforts to get some relief, and I am glad that the Minister has said he will have consultations with the ESB to determine the extent of relief for industry. The ESB are to review the situation to see what they can do. I am knocking on an open door in this respect because the Minister has given a commitment to small industries, many of which were set up by the IDA and county development teams and have been doing tremendous work, although they were hindered in the past few years by high electricity costs.
We all know that farmers' incomes have fallen badly in the past few years and dairy farmers have been particularly hit by high ESB bills. A few years ago when the FEOGA grant scheme was introduced there was delight among communities in the west. However, there was disappointment that the scheme was so restrictive and many farmers did not benefit from it as they had expected. The FEOGA scheme was restrictive in many ways and I hope we can get some changes in the regulations which will enable us to extend it not only to farmers but to people in rural areas who either had houses built for them by councils or who have provided their own houses.
Last Novermber I put down a question asking for the number of people who had applied for help under FEOGA in respect of their capital contributions, and I was told that in Galway and in the west generally only half of the applications had been approved. An effort should be made to speed up the processing of applications so that more people will be approved for grants. I hope that the removal of the ESB fuel variation charge will help those who had been hoping for assistance.
People in rural areas have been complaining about poor electricity supply. I hope the Minister will inquire into this matter. Only for the co-operation which exists between farmers who rotate heavy work which involves the use of electricity, such as milking, there would be more difficulties than there are at present. Action should be taken to deal with this. Transformers should be erected or three phase current should be brought to towns and villages which do not have that kind of supply. That should be done immediately to help those who are handicapped by poor supply. Trustees of group water schemes have done tremendous work in bringing water supplies to rural homes. One of their bones of contention is the high cost of electricity involved in this.
When the Minister makes his promised announcement people will not be charged the fuel variation cost. I was critical yesterday when speaking about the public relations side of the ESB. Like other Deputies I would regret if people were not given adequate time to pay high bills and would be concerned if they were cut off. Deputy Taylor gave examples of people who were disconnected. Like other businesses, the ESB are affected by inflation as regards their wage costs, materials, transport, postal charges and fuel. Their costs are also affected by interest rates because they buy oil and gas abroad with a declining currency. Inflation has increased the price of electricity. Up to 1972, oil was relatively cheap and so was electricity. Before the oil crises it cost £7 a ton but immediately the war broke out in the Middle East between the Arabs and Jews there was an increase in the price of heavy oil of the order of £65 a ton. That was the reason why the fuel variation charge was introduced. The ESB abolished that charge in 1977 because it looked as if there would be stability in the oil crisis. However, despite their best efforts it had to be reintroduced.
The ESB are to be complimented on the various measures they have introduced to make payments easier for the consumer. They have a number of schemes such as savings stamps, a budget payment system, credit card and an easy pay system which allows the customer to pay weekly or monthly to suit the household budget. We hear many complaints about large two-monthly ESB bills. There are 300,000 customers availing of these different schemes and that figure reflects their success. However, they are not as great a help to the consumer as the Minister's decision to discontinue the fuel variation charge. I am glad he has made this decision and I am sure all sides of the House agree that it is an opportune time to do so. I say that particularly because of the diversification which has taken place. This diversification has helped other sectors of the community, for example, in bogland areas we have electricity generating stations. Natural gas has made a significant contribution and the ESB have stated that savings to them were of the order of £45 million in 1981 and are expected to be £55 million in 1982. The overall effect is that ESB prices to the consumer are 10 per cent lower than they would otherwise have been.
The Minister is to be congratulated on the step he has taken. I am glad that there is agreement on the motion. It has not been mentioned in the debate that our native energy resources are saving us large sums of money because we do not have to import so much oil. The figure quoted by the ESB is a saving of £136 million a year. We are helping our own economy by the diversification process and because we are less dependent on oil now the Minister has been able to discontinue the fuel cost variation charge.