Dáil Éireann díospóireacht -
Tuesday, 2 Jul 1996

Vol. 467 No. 7

Written Answers. - ESB Review.

Michael McDowell

Ceist:

17 Mr. M. McDowell asked the Minister for Transport, Energy and Communications the current position regarding the implementation of the ESB Cost and Competitiveness Review; whether it is proposed to grant approval for an increase in electricity charges; and if he will make a statement on the matter. [14164/96]

Minister for Transport, Energy and Communications (Mr. Lowry)

The CCR agreement is a milestone event, crucially important to the future of ESB and of critical national significance for the competitiveness of the Irish economy.

Implementation has commenced with staff categories who accepted the CCR. ESB is continuing to work with the group of unions to see how the situation with the remaining staff might be resolved.

While the CCR is a costly deal, it is self-financing and according to ESB has a payback period of just over four years. From the year 2000 onwards annual gross savings are projected at approximately £85 million but some of this will be offset by annual ongoing costs of about £27 million, leaving the annual net savings at about £58 million. Government approval to the CCR was conditional on an agreed level of annual savings.

Future price increases are contingent on satisfactory implementation of the CCR. The implementation of the CCR is being monitored on an ongoing basis by my Department and ESB's external auditors have also been requested to sign off on the savings.

The Government earlier this year approved electricity price increases for the next three years. The first increase is now being implemented and involves an average 2 per cent price increase effective from the May-June billing period. This is the first electricity price increase in over ten years. The increases have been designed in a way to minimise the impact on the competitiveness of Irish industry and business. Industrial and commercial customers will see rises of less than 2 per cent this year and domestic customers will see rises of 2.8 per cent in 1996.