Vol. 542 No. 3
9 Ms McManus asked the Minister for Public Enterprise if she has satisfied herself that the introduction of competition in electricity will still result in a reduction in electricity costs in view of the recent decision by the Commission for Electricity Regulation. [24141/01]
In the first instance, I should point out that I do not have a function in relation to electricity pricing. Under the European Communities (Internal Market in Electricity) Regulations the Commission for Electricity Regulation has been given the function of examining electricity charges in the segment of the market not open to competition and, where necessary, issuing directions to the ESB in relation to both the nature and amount of such charges. By virtue of the Electricity Regulation Act and the European Communities (Internal Market in Electricity) Regulations, a new regulatory regime has been established in Ireland.
On the broader question of costs, liberalisation of the electricity market is expected, in due course, to exert downward pressure on prices and lead to increased efficiency and improved levels of service. All large businesses and many medium-sized businesses are "eligible customers" and as such are free to source their electricity from any licensed electricity supplier.
The Minister has a function in this matter, but has simply dodged it or wriggled out of her responsibility by not giving a clear policy direction to the regulator which she has an absolute responsibility to do. Is it believable, given what we have been through with the ESB in terms of getting rid of 3,000 jobs to prepare for competition and establishing the regulator, that the only thing that can be done by the regulator in the interests of competition is to increase prices? The ESB was doing such a good job with reduced prices that it would not pay the private sector monopolies from other countries to come to this country and compete with the ESB. Is it believable that we are presiding over a situation where prices must be increased to promote competition? I thought the opposite should be the case.
By law the electricity regulator has the right to fix prices.
He follows the Minister's policy.
I was amazed at the price increase granted. However, I fully accept it is his right to impose it.
The Minister hived that right to him.
I recall being pressed on this matter in the House by Deputy Stagg – there has not been a price increase since 1996 – on at least one occasion as to why I would not give what the trade unions at the time were seeking, which was a price increase.
That is a load of rubbish.
It is not. It is in the Official Report.
(Mayo): Has the Minister been made aware of the fact that ePower, which was set up just 18 months ago, has effectively walked out?
This is Denis O'Brien's project?
(Mayo): Correct. I do not hold a brief for Denis O'Brien but his is one of 14 companies which have abandoned the Irish market since liberalisation. So much for liberalisation. Is the Minister aware that the reasons these companies abandoned the Irish market are regulation, grid connection, wholesale prices and unfair practices? Did the Minister receive a letter from the regulator, Mr. Reeves, pointing out the difficulties for new entrants to the market in terms of trying to break that stranglehold?
I may well have received a letter from Mr. Reeves. If I did, I replied to it. All correspondence between Mr. Reeves and the Department is on the Department's website and is accessible to everybody. Similarly, submissions to the regulator are on his website and are equally accessible.
I am aware that ePower has decided to leave the electricity market. On the evening the company made that announcement I spoke with Mr. O'Brien's colleague and he explained that there were many reasons for the decision. Some of them are those mentioned by the Deputy but there were other reasons. We have liberalised the market and there is already competition. In three years the market will be fully open and all customers will be free to source their own supply of electricity.
They do not know where they will get it. Will the Minister issue a policy directive to the regulator to ensure consumers' interests come before the interests of other players wishing to enter the market and that the consumer is not penalised to facilitate the entry into the market of people who will simply increase prices?
I am quite sure that is not how Mr. Reeves carries out his duties.
The Minister can give him a policy directive.
I have found that the best way to deal with regulators is to leave them severely alone.
That is an outrageous statement. The Minister is obliged in law to give a policy directive to the regulator. He is not to be left on his own and that is explicit in the law. The Minister should consult her legislation or withdraw that statement. It is an outrageous statement.
The regulators are independent. There is no point appointing them if one is going to meddle.
