Vol. 496 No. 3
30 Mr. Stagg asked the Minister for Public Enterprise if she will authorise the application by the ESB to build a 350 to 400 megawatt combined cycle gas turbine power station in order to prevent the possibility of power cuts in 2001; and if she will make a statement on the matter. [22717/98]
Proposals by any party, including the ESB, to construct new generating plant in the future will require an authorisation from the new commission for electricity regulation to be established under legislation which I will bring before the House in the next few weeks. I announced on 16 September last that the Government had approved the drafting of the necessary Bill to establish the independent regulatory commission. I hope the commission will be in place by early next year.
I gave a detailed reply on this issue on 30 September in response to a similar question from the Deputy. A number of electricity generators, apart from the ESB, have signalled their intention to enter the Irish market under the provisions of the new electricity directive to be implemented here by February, 2000. I published a report last month on generation capacity requirements up to 2005 prepared by the ESB in consultation with my Department.
The current legal situation is that the ESB requires my approval under the Electricity Supply Acts for capital expenditure on any new plant. Private sector companies who wish to enter the market require a permit from the ESB under the Electricity Supply Act, 1927. The ESB therefore, is currently in the position of operating in the market and at the same time regulating the entry of competitors.
I have been advised by the Attorney General to introduce a Bill to establish an independent commission for electricity regulation to oversee the electricity sector. It will operate a licensing regime for operators wishing to generate and sell electricity. It will also issue authorisations for the construction of generating stations. I hope to have the Bill ready at the end of this month and the advertisement for the position of commissioner has been published in the newspapers.
The Minister appears to have missed the point of the question. If there is no additional generating capacity in the interim period between the appointment of the regulator and the construction of new power stations, there will be power cuts in Dublin. The ESB is planning to build a power station of the capacity it is required to provide under the 1927 Act. It should be allowed to proceed with the power station in the interim period to prevent power cuts in Dublin and elsewhere before the new regime begins to operate and new power stations are built.
I understand that point. The ESB decided, correctly, that it required an extra power plant. However, the Attorney General said authorisation could not be given in the run up to open competition. I could not authorise finance for the power station while the ESB remains the group which can allow or disallow any incoming group wishing to become involved in the electricity generation sector. That was the dilemma posed.
I am aware there are genuine concerns within the ESB that power cuts will occur because the company's generating capacity will not be sufficient. The only recourse open to us is to deal briskly with the legislation, the third draft of which is currently with the Office of the Attorney General. Applicants for the job of regulator will be interviewed in the near future and we will then attempt to progress matters. The chief executive of the ESB has again raised with me his concerns about this situation. However, it must be recognised that the Attorney General has conveyed to me the legal constraints placed on me.
The ESB is not concerned that power cuts will occur, it is aware there will not be sufficient generating capacity to meet demand by the year 2001. The Minister's proposals will not allow for provision of the additional capacity before that date. Even if Members agreed to rush through the legislation, there would be a one to two year period during which there would be a shortage of electricity supplies. In such circumstances, the ESB is required under the 1927 Act to provide the generating capacity and it will be liable to pay damages to those affected by power cuts if it does not do so. The Minister's refusal to give them a mandate to provide the capacity will have the effect of making the company liable to pay such damages.
I appreciate the Minister's point about the advice she received from the Attorney General and the provisions of the existing law. However, surely that law takes precedence over planned legislation?
I take the Deputy's point. I put it to the officials from the Attorney General's office that the current law states that the ESB has the power and the duty to provide an uninterrupted supply of electricity. The Attorney General sought advice on the matter from Europe and it emerged that another law would deem me to be acting in a non-competitive nature if I gave the ESB the mandate to which the Deputy referred in the run-up to 17 February 2000.
This is a real dilemma. As a solution I propose to introduce the legislation, which contains 15 heads, as quickly as possible, interview applicants for the post of regulator and select a successful candidate so that the two will combine and work can progress.
