I welcome the opportunity to speak in support of the Electricity Regulation Bill and the establishment of the new commission for electricity regulation. This is far-sighted and courageous legislation because it opens the field of electricity generation and distribution to competition for the first time in over 70 years. At the same time, it will ensure protection for the public, those involved in electricity generation and distribution, consumers and the environment.
Ireland owes its development, often its survival, to electricity. Last Christmas the inhabitants of many areas in the north-west and the midlands were given a reminder of what life without electricity is like. We knew that ESB staff were working to rectify the situation and that power would be restored. For most people it meant annoyance and discomfort, but it was also a reminder of what it feels like to be powerless.
The provision of electricity has given people power to take greater control of their lives. To farmers, the arrival of electricity made possible the introduction of mechanisation for tasks such as milking. It also meant that electrical appliances could make life easier and more enjoyable whether a person was engaged in food preparation or watching television. The arrival of electricity also made life more secure.
Today's world has become increasingly dependent on electricity. The spread of ultra rapid telecommunications and other forms of data exchange would be unthinkable without electricity. Computers are an integral part of every office and, increasingly, of every home, where they are no longer playthings but are used for a wide spectrum of communications requirements which range from surfing the Internet to writing letters.
Electricity bills are a major item in everyone's budget. Energy bills account for an even greater proportion of industrial and business costs. Electricity production and consumption is an accepted yardstick of the vitality of a country's economy and it is hardly surprising that in recent years the electricity sector has grown by 6 per cent annually. It is my hope that this sector will continue to grow at its current rate because this will reflect our continued economic buoyancy. We have a duty to ensure that energy is generated and distributed as efficiently as possible and that the consumer, whether a business or a private household, is able to avail of electricity at less expensive rates. We must also be in a position to provide for the continued increase in consumption, with an equivalent increase in electricity production. It is for this reason the Bill opens the electricity sector to competition, removes the Electricity Supply Board's monopoly on power production and distribution and gives the new commission responsibility for sanctioning the construction of power generating plants.
None of this implies any criticism of the ESB or any diminution of the praise and gratitude we owe that organisation and its staff for their contribution to the development of our nation. It was through the ESB that Ireland, a country relatively poor in natural and mineral resources, was able to transform its abundant water supplies and peat bogs into power and, ultimately, into greater prosperity. It was the ESB that supervised and organised the rural electricity scheme, replacing flickering oil lamps with light bulbs that provided illumination at the turn of a switch. The rural electrification scheme was a major act of public service to the Irish people because it represented a commitment on the part of the ESB to supply power and its benefits to everyone in Ireland, regardless of where they lived and irrespective of the costs of installation and continued supply. That commitment as been maintained by the ESB to this day.
The ESB has enjoyed a monopoly on the generation of electricity since 1927. This was justified in the past because no private power generator had the resources to generate and supply electricity cheaply to the entire nation. Not only was this justified, it was also necessary because it was part of the process of building this nation. We have benefited as a result. However, the world is changing.
The answers of the past cannot supply solutions to the problems and demands of the present or ensure our continued progress in the future. The political borders dividing countries into self-contained economic entities have been rendered increasingly meaningless, particularly with the advent of the Single European Market. Many countries in Europe relied in the past on one supplier for the provision of power, but the benefits of competition have seen a gradual transformation towards a near total liberalisation of the sector in some countries. We must ensure that Irish consumers do not pay higher charges for electricity than their European neighbours. It is vital that commercial and industrial users should not be placed at a disadvantage because of higher energy costs in this country.
The opening of Ireland's electricity sector should not be viewed with fear because it goes hand in hand with similar liberalisation elsewhere in Europe. The ESB will remain the most significant player in the Irish electricity sector for many years to come. The legislation heralds the beginning of a new chapter in its history. Other electricity production companies are free to enter our market and introduce their expertise. However, the ESB, as a result of the expertise and talent at its disposal, is not only able but capable of doing this throughout Europe. It will also be possible for Irish companies to compete with the ESB in Ireland. Some of these may operate on a smaller scale than the ESB and serve a more limited geographical area. The resultant lower overheads and costs they incur could be passed on to consumers in the form of lower prices. We should not lose sight of those small-scale producers of electricity who are already generating electricity and feeding it into the national grid. The liberalisation of the electricity sector has the potential of benefiting these small-scale producers.
There may be those who are afraid that liberalisation of the electricity sector will not lead to cheaper electricity nor to a power supply that is either regular or consistent. The Bill and the powers granted to the Minister and the commission will ensure the public interest is maintained and well served. Everyone and every region that wants and needs electricity should be able to acquire it at a reasonable rate. The power to maintain this situation has been given to the commission. It would be unjust and, ultimately, self-defeating if users in some parts of the country found themselves paying higher energy and electricity charges because of greater costs in maintaining supply, especially in outlying or thinly populated areas. That would militate against rural development and the necessary rural regeneration needed in many parts of the country.
The commission will take care of environmental issues related to the energy sector to ensure liberalisation does not lead to environmental damage or the construction of plants generating electricity in a dangerous manner. It will also safeguard the use of indigenous sources of power, especially peat, as opposed to imports.
The Bill has many strengths. It is permeated throughout by pragmatism. It introduces liberalisation in the electricity sector, not because of some trendy ideology but through a desire to provide electricity as cheaply and efficiently as possible. At the same time it does not establish cheapness and efficiency as sacred idols but makes adequate provision that the benefits of greater competition will be spread evenly. It will oversee change of a far-reaching nature while making sure no one has anything to fear. Our future depends on efficiently produced sources of power. The Bill gives the people the power to shape their future.
I congratulate the Minister on bringing forward this pragmatic, innovative and important Bill which will contribute enormously to our economic development.