Vol. 500 No. 6
2 Mr. Stagg asked the Minister for Public Enterprise the consultations, if any, she has had leading up to the publication and presentation in Dáil Éireann of the Electricity Regulation Bill, 1998; if these consultations included the ESB group of unions; the outcome of these consultations; and if she will make a statement on the matter. [4708/99]
Both I and my Department have undertaken an extensive consultation process to date on implementing the EU electricity directive in Ireland by February 2000. The process has included a detailed paper, but the Deputy knows about that so I will not detail it.
The group of unions have made submissions in response to the consultation documents. They are far too detailed to reproduce here but I am arranging to send the Deputy copies of their comments. I believe the Deputy wants to know whether I have met the unions?
More than that.
Deputy Stagg can ask a supplementary.
I spent a lot of time preparing my question and I expected a detailed reply from the Minister. Perhaps she will give us a detailed reply because we are not restricted to the six minutes today.
I thought the Deputy knew it all and that it would be boring for him. I was bowing to his intelligence. I will read the full reply.
Both I and my Department have undertaken an extensive consultation process to date on implementing the EU electricity directive in Ireland by February 2000.
The process has included the following: a detailed paper prepared and published in May 1997 by my Department and the previous Minister setting out proposals for implementing the directive; a discussion forum organised by my Department in January 1998 to promote the widest possible consideration of the suggested changes in the sector; and a further consultation document, distilling and incorporating many of the suggestions received, published in May 1998.
As part of the consultation process, both I and my officials have had a number of meetings with parties about proposals for the restructuring of the electricity industry. These included several meetings with the ESB group of unions during 1998, meeting the board and management of the ESB, meeting IBEC, consumer interests, prospective market entrants, including both Marathon and Viridian in September, and I met with IVO/ELF last week. I will continue to consult all interested parties.
It is clear from the extensive consultation which has taken place that the industry fully supports the early establishment of an independent regulatory commission.
The group of unions have made submissions in response to the consultation documents. They are far too detailed to reproduce here but I am arranging to send the Deputy copies of their comments.
One of the main concerns of the ESB group of unions is that there will be no barrier to the ESB competing in the eligible customer market. It is my intention that the ESB will be able to compete in that market segment on a fair and equitable basis and this is provided for in the Electricity Regulation Bill currently before the House.
All comments and consultations received to date were carefully considered when preparing the current Bill which I presented to the Dáil on 3 February last and will be further considered when preparing the balance of the legislation for the full implementation of the EU directive.
The second item of legislation later this year will deal with the conversion of the ESB from a statutory corporation to a public limited company under the Companies Acts. It will also address matters such as the establishment of an independent electricity transmission systems operator and a licensed public electricity supplier and will provide for the unbundling of accounts for electricity undertakings.
The dates of the meetings are as follows: I met the ESB group of unions on 27 March, 1 April, 11 June, 7 July, 26 August, 2 October and three weeks ago. I met Marathon on 10 September, Viridian on 10 September, IBEC on 3 June, the Small Firms' Association on 20 August and IVO/ELF on 11 February. I met a representative group of the unions three weeks ago and their main point at that meeting was the trading mechanism. The two options available are the pool system and the spin system. I told them at the end of the meeting that we hoped to reach a middle way between the two sides.
I wanted the Minister to give me the reply in detail because I suspected it contained a statement to the effect that all the parties with which she had consulted fully supported her proposal. Will the Minister agree that the proposals in the Bill set aside large sections of CCR?
Is the Deputy talking about the regulator Bill?
Yes, and the Minister's statements on that, some of which have nothing to do with the Bill but which signal her future intentions for the electricity industry. Will the Minister agree the CCR required that the ESB remain as an integrated company, that it remain as a publicly owned company and that a power procurer would be appointed who would be in charge of system planning? Will she further agree that the CCR required that assets would not be made redundant and would only be retired at the end of their economic life? Will she agree also that her privatisation proposals, including the appointment of a regulator and the separation of the roles of the ESB, are counter to what is contained in the CCR, that the out-sourcing contained in her proposals will result in the loss of between 2,000 and 2,500 jobs in the ESB, and that the resultant premature closures will have hugely detrimental effects on large parts of rural Ireland, and I am not talking about the midland stations? Will the Minister agree this would lead to the closure of Tarbert, Great Island, Poolbeg and Marina in a very short time? Arising from that knowledge which I am sure the Minister has, how can she tell the House that the unions fully support the new proposals when they are clearly cutting across the agreement between her Department and the unions which we call the CCR?
To answer the Deputy's last point, my exact words were that the unions fully supported the early establishment of an independent regulatory commission. With regard to the CCR, on the first occasion I met the trade unions they acknowledged that CCR was compiled in good faith long before any talk of an EU directive. They knew a directive would be forthcoming but nobody had any idea of its content. That was agreed between us and that remains the position. I do not accept the scenario depicted by the Deputy and I do not see any circumstances in which that will happen.
When I met the trade unions three weeks ago we spoke about transitional arrangements. I alerted the Commission last October and will contact it again in the coming months. I have given the Commission an early notification that I will be entering my caveat later this year, which I am entitled to do. I hope the transitional arrangements into which we shall enter will help matters, but it is the trading mechanism that will be at the heart of the electricity industry. We are currently working on the trading mechanism and the two sets of economic proposals. I will continue, as is proper in a pre-competitive environment, to meet everybody and listen to the various views expressed both by the incumbent and those who strive to enter the market. That is my duty as Minister.
Will the Minister agree that the CCR, which took two years to bring from preparation to final conclusion, was not put in place in a vacuum? On the day the electricity directive was completed, the trades unions, at the request and with the support of the then Minister and me, were in Brussels with us. They were fully aware of the contents of the directive and the direction in which it was going during the period of the negotiations. To say that the CCR was created in a vacuum is simply not true.
I did not say that.
There was full knowledge of the contents of the directive at the time it was concluded.
Will the Minister also agree that, even if further development is required in ESB industrial relations, we simply cannot achieve that by setting aside an agreement and the Minister coming forward with proposals to replace it in the form of legislation? That is not a way of doing things.
Is the Minister aware that no later than yesterday the senior officials of the ESB group of trades unions met senior officials of the Department and outlined a long list of their grave difficulties with the legislation? So concerned are they with these difficulties that the members of the trades unions have given authority to the officials of the trades unions to carry out a ballot with a view to industrial action. It is not an old issue but a live issue.
Is the Minister further aware that a strategic meeting within the ESB under the industrial council will be held next Monday to discuss the possible continuation of the partnership scheme with the ESB? Is she aware this is a key make or break meeting?
I am well aware of it. I received a note from a trades union member just before Question Time stating that the group will meet the ESB directors next Monday and that the situation is reasonable.
It is obvious—
Priority Question Time has been used up.
I will be brief, a Cheann Comhairle. It is obvious that certain members of the union not alone present bouquets of flowers to the Minister but also give her good information at a key time.
The Deputy must put a question.
Will the Minister agree the situation is serious and is leading to an inevitable breakdown of industrial relations in the ESB with huge unimaginable consequences for this country? In light of that, will she review her proposals in the present legislation which is causing this problem?
I am happy to say I have good relations but I do not accept bouquets. I have not ever received flowers of any kind from the ESB group of unions.
I thought the board sent her flowers recently—
The board sent me flowers.
—and a prominent member of it carried them into her house.
Please allow the Minister to finish her reply to this question.
The chairman of the board kindly sent me a modest bouquet of flowers for Christmas. I do not think it is declarable under any ethics Act. They lasted a week.
It depends how modest.
They cheered up the O'Rourke household over the Christmas period. I thanked them. We were not allowed to say thanks for flowers because once one said thanks it was a declarable gift under the other Act.
They did not amount to £500.
They were modest. I am grateful for such courtesies.
She will be noting them more often.
I have good relationships with all of the trades unions in the public companies. I met them 11 times in 1998. I do not know what else one would call that. Some would call it madness; I call it good sense. I met them a few weeks ago and I received a message from them today. I hope matters will resolve themselves in a satisfactory fashion. We are endeavouring to work out the trading mechanism in a fair way.
Does the Minister not recognise that her proposals caused the problem?
There are no trading mechanism proposals as yet. We are trying to get a middle way between NERA and the London School of Economics. I am also conscious that Mr. Karel Van Miert, with his eye-glass and all his underlings from Europe, is watching all of this and saying "Let us see how Ireland does in the pre-competitive arena". All of those things must be taken into account. I am satisfied that matters will work out equitably.
That concludes Priority Questions. We have exceeded the time allowed for Priority Questions. However, under Standing Order 38, we can transfer the fourth and fifth questions into ordinary Question Time. I will now take Question No. 4.
