PRIVATE BUSINESS. - ELECTRICITY (SUPPLY) BILL, 1927—COMMITTEE RESUMED. SECTION 39.
As Senator Hooper is unavoidably absent, I move on his behalf the following amendments:—
27. Section 39, sub-section (7). Before sub-section (7) to insert a new sub-section as follows:—
(7) (a) Whenever a former undertaker is a local authority the new undertaker, or the Board if the Board is itself the new undertaker, shall, within six months of the date of acquisition, notify the former undertaker whether it is or is not its intention to use the generating station of the undertaking for the generation of electricity.
(b) If the notification provided for in paragraph (a) of this sub-section is to the effect that the generating station is not to be so used the Board shall make forthwith an order re-vesting the generating station and transmission system in the former undertaker.
(c) If the notification provided for in paragraph (a) of this sub-section is to the effect that the generating station is to be so used the fair value of the generating station and transmission system as a going concern on the date of the vesting order shall be fixed by agreement between the former undertaker and the new undertaker, or between the former undertaker and the Board, if the Board is itself the new undertaker, and, in default of agreement, by an arbitrator nominated by the Chief Justice and an amount equal to the fair value as thus fixed and interest on such fair value from the date of the vesting order at five per cent. per annum, less an amount equal to the portion (if any) of the outstanding capital and mortgage liabilities of the undertaking as was incurred in respect of such generating and transmission system shall be paid over to the former undertaker.
28. Section 39, sub-section (7), Before sub-section (7) to insert a new sub-section as follows:—
(7) Whenever the former undertaker is a local authority the Board shall, within three months after the date of the vesting order, cause an assessment to be made of the fair value as a going concern on the date of the vesting order of the generation station and transmission system of the undertaking by an arbitrator agreed upon by the former undertaker and the new undertaker, or by the former undertaker and the Board if the Board is itself the new undertaker, or, failing such agreement, appointed by the Minister on the nomination of the Chief Justice, and an amount equal to such fair value and interest on such fair value from the date of the vesting order at the rate of five per cent. per annum, less an amount equal to such portion (if any) of the outstanding capital and mortgage liabilities of the undertaking as was incurred in respect of the said generating station and transmission system, shall be credited to the distribution system of the new undertaker and applied to the reduction of charges to consumers within the area of supply of the former undertaker.
I stand at a disadvantage, as he could present the case better than I could. I shall discuss amendments 27 and 28 together. They deal with the question of the costs of generating stations. It will be remembered that there are already amendments in the Bill providing for compensation in respect of municipal undertakings, under two heads. For the purpose of assessing the distribution costs each area is to be treated separately. Those sums advanced out of rates are to be repaid to the municipality. That is a fair recognition of the position of municipalities, but in effect these compensations to the consumer, I submit, are in respect of the distributive portions of the undertaking, but no provision has been made whatever for compensation in respect of the costly generating stations erected by municipalities. I am not going to discuss who owns these generating stations. Whether the property is vested in the ratepayers or the consumers is a question which has been worn threadbare. It must be conceded that property must be vested in somebody. No one has contributed a farthing towards the setting up and carrying on of these undertakings but the particular persons, be they consumers or ratepayers, in the area affected.
In moving these amendments, I may say on behalf of Senator Hooper and myself that we are not animated by any desire hostile to the Shannon scheme. We are very anxious to make it the success we believe it will be. One of two things will happen in respect of these generating stations— either the Board will or will not require to take them over. If the Board require to take them over I suggest that adequate compensation should be paid to the municipality. I quite recognise that provision is made, I think in sub-section (6) of the section we are dealing with, for capital liabilities, but the point I am endeavouring to put is this, that no provision is made for what I might call the value of these undertakings as going concerns. I do not want to take on the character of the assessor or valuer. For instance, with the Pigeon House Fort it is difficult to fix the amount of the undertaking as a whole, but I suggest it might be something between £150,000 and £250,000, less, of course, the amount of the liabilities outstanding, which is recognised in sub-section (6). I think the case made for recognising that there is a value in these undertakings other than the capital value is a strong one.
To whom is the value relevant?
If the Senator will allow me to continue my argument I will endeavour to deal with that. It may be asked, and perhaps this may, to some extent, help Senator Gogarty in his difficulty, how this situation could be met. I suggest it could be met in possibly two or three different ways: To allow the municipalities to retain the generating station to do what they like with it if the undertaking is taken over and the scheme is worked as a whole or to pay the municipal authorities the fair value of the station as a going concern, or, lastly, and by way of anticipation of the Minister's objection—I may say this is the least feasible—to credit the accounts of the distribution system of the municipal areas with the value of the generating station on the transmission system. I think that might be a very complicated way to deal with the situation.
Accordingly I suggest the best mode of dealing with the difficulty would be to pay the municipalities the fair value of the station. In the event of the new generating station being required by the Board, I think the second alternative is the better one, namely, to pay the municipal authorities the fair value of the station. If it be true that municipal undertakings were established primarily for the benefit of the consumers and that by the charges imposed they paid off in most cases the greater part of the liability incurred, it is equally true that up to now no one thought of denying the proposition that the effective ownership remained with somebody, whether it be the ratepayers or the consumers. I think the real position should be stated. They are really dual owners in the matter—to some extent, perhaps a larger extent, the consumers and, secondly, the ratepayers. Someone is the owner. No one can deny that. Of course, it will be said that the consumer is already compensated by the fact that he has got the benefit in the cost of the electricity supplied to him. You cannot say that about the ratepayer. Again I want to emphasise the value as a going concern of the generating station. I am very confident that if the House does not see its way to accept either of the amendments some other mode will be found. I am not, and I am sure Senator Hooper is not, wedded to the particular form of the amendments, but that the principle underlying these amendments is a sound one appears to me unchallengeable.
There is a certain value attaching to the undertaking as a going concern as distinct from the capital value on the renewal stage. In Dublin we are entitled to very special consideration.
In the first place, we have had our system of electricity, which cost someone, whether ratepayer or consumer, a very large sum of money. I am not challenging the right which will be conferred by this Bill to have the undertaking acquired. That is a res judicata, if you will, but I am challenging that the generating station should be taken over without adequate compensation for its value as a going concern. I do not want to touch on difficulties I do not wish to meet, but at the moment Dublin is voiceless on this matter for reasons I need not dwell on. The Corporation is not in existence. In connection with the Commissioners, who so magnificently carried out their duties, I have no authority to speak for them, but I take it they would not be in a position to give their views on this Bill. I cannot help thinking that if they could they would support the view I am endeavouring to put before the House, namely, that those generating stations have a value other than the value dealt with under sub-section (6), and that, accordingly, either of these amendments dealing with that problem or, at any rate, the principle underlying them, should find favour in the House.
If it were not for the eminence of Senator Brady in his profession I would be inclined to think that it was due to other than special pleading that the confusion arose. The fallacy behind this question of municipal property is the thought that it is property as if held in the air and that it belongs to people who do not benefit. The taxpayers, first of all, had to pay, and the suggestion now is that the taxpayers ought to be taxed to pay for their own property. I think the fallacy is twofold: First of all, that these things are to become suddenly worthless and that they have to be compensated for as if they were to be removed from the service of the community. The community is to benefit, whether it is the taxpayer or the ratepayer. As a matter of fact, it was the ratepayers created the service and, as an aside, I may add the contention is that the efficiency of the service is such that some people seem to think that the Shannon scheme will not beat it. There is no proposal in Section 39 to scrap the excellent undertaking at the Pigeon House.
I did not suggest there was.
You suggested it was going to be lost and that it was a utility for which compensation ought to be given. It is one of the conditions in the very best hydro-electrical undertakings that it is always wise to have a stand-by of some other power in case of accidents or of a sudden cessation of current. I do not think there is a single hydro-electrical station in the world that has not that provision to some extent. If the Pigeon House electrical station be worth £100,000, it is worth that to the owner, and the owners are not going to lose it.
I took a parallel case of a water supply, the other day, for Dublin. I pointed out that it is the same thing to the consumer whether the water comes from Lough Dan or whether it comes from Vartry lake. If you apply that metaphor to electricity, you will have a more constant and more profuse supply and a supply that will not be dependent upon the vagaries of English labour disputes. It is a very difficult thing when one loses sight of the fact that it is the same persons who own the electric plant in Dublin if you call them the community. If you like to subdivide the community into taxpayers and ratepayers, then, naturally, confusion will arise, and further confusion will arise if you say the thing is going to be scrapped and must be compensated for.
As I gather, the Senator proposes that compensation for goodwill should be paid when the undertaking is taken over. If that is so and the goodwill has a value, and it may have some value, and if a sum of money is obtained for the goodwill, who is to get the money? Is it the municipality as a whole? And if so, what are they to do with it? Are they going to reduce their indebtedness under other heads by the amount they receive? Of course if that is so it is not legitimate in view of what the Bill is to accomplish. Good will, I submit, was never intended to be taken into account.
I only wish to press upon the Minister, if possible, that he should treat this subject on very broad lines. The Pigeon House Fort will no longer be of use to the city alone, but it is quite possible, under the management of the Board, it will be of use to the community far and wide. If you read the report of the experts carefully you will find that over and over again they suggest that the steam stations in Cork and in Dublin should be dealt with as auxiliaries for the sake of the peak load, which is an indication that they do not consider the storage in the Shannon sufficient. That is one of the difficulties in their report: they press the point of the necessity of leaning somewhat on the steam stations. Now, the citizens of Dublin will be driven out of their steam station only because the electricity is to be applied by the Shannon Board. In these circumstances I think the responsibility is thrown upon the Shannon Board to make to some extent—I do not say to what extent—some compensation to the city of Dublin for its station. I am distinguishing that entirely from the question of distribution. But, for this power station and the heavy amount spent on it by the city, I think we should take a broad view, and they ought to compensate the city of Dublin for the loss.
The notion the enters the minds of a good many people in this matter is that there are several people paying, namely, the taxpayers of Ireland and the ratepayers of Dublin. As far as I can see, the property of the ratepayers of Dublin is being given in this instance to the taxpayers of Ireland.
Owing to the fact that you are confiscating their property. The electrical scheme on Dublin belongs to the ratepayers of Dublin, because they found the money to start it. That is being taken over by the Shannon electricity scheme, which belongs to the taxpayers. You are confiscating the property of the ratepayers of Dublin and giving it over to the taxpayers of Ireland. That is as clear as daylight. The ratepayers of Dublin are only part of the taxpayers of Ireland. It seems to be perfectly clear that the ratepayers of Dublin should be compensated.
I would like to ask the Minister with regard to the position of a company who jointly run an electricity and gas undertaking, in the event of the taking over of the electrical plant, what is to become of the gas plant? Will compensation be paid for it?
I would like to understand clearly what we are discussing on this Bill, because a certain amount of confusion has been introduced into it by Senator Brady's use of the words "a going concern" applied to a generating plant. Now you cannot compensate for the value of a generating station as a going concern once it is separated from the rest of the undertaking. The distribution portion of this undertaking will be taken over and will remain and be of use. It is only in one or two cases that the generating station taken over will be used. Dublin and Cork are the two exceptions, and probably, with the exception of these two stations, none of the generating stations will be used. They will not be wanted. The supply will come from the Shannon scheme. What we are discussing is this—what is the fair and right thing to do in the case of the generating stations that are taken over and used? You cannot judge that value as a going concern at all. It is the capital value that it has at the time, and not its value as a going concern. It is that you must ascertain, and, of course, it is quite ascertainable. Then you will have its proper valuation. I think that the justice of compensating for that capital value—the capital value of the generating station that is going to be used— cannot be disputed. It is a capital asset which is going to be taken over and used. I suggest to the Minister that the fairest solution of that situation is this—that the capital value of the generating station which the Board are to use ought to be ascertained.
At the same time you have to ascertain what are the liabilities of the old undertaking and what is the capital value of the old undertaking. The Bill, as it stands, indemnifies the old undertaking which is a private company. The security for this was to some extent the old generating station. If the ascertained value of the old generating station is greater than the outstanding liabilities, I cannot see any answer to the justice of the claim that that difference should be paid over to the old undertaker whose generating station is being taken from him to be used by the Board.
As one who dislikes the whole tribe of municipal and State enterprises, I view with detachment, if not with amusement, this squabble between two sections of socialists. In dealing with the matter, I need not allude to the truth of the old proverb: "When thieves fall out honest men come into their own." In this connection, it is going to lead to the man with the biggest stick coming into his own. I do not see a justification for one socialist paying compensation to another socialist. The attitude the Minister has taken up, that this is a change of trusteeship, is, on the whole, sound, provided he protects Dublin against exploitation. I am not at all in favour of the proposal of the powers that are to be given to the Government, but I oppose it on different grounds—that the smaller the entity the greater the necessity why it should be preserved. Dublin has acquired a certain character and prestige in its electrical enterprises, and some civic pride has been developed around it.
There is, therefore, no justification for this State coming in and confiscating the whole of this undertaking, suppressing and extinguishing its individuality, damaging its civic pride, and lowering its prestige. That is the ground on which I oppose it. If the Senator brings in an amendment to prevent the Government taking over the Dublin undertaking I will give it my hearty support and will give it on the ground that it will be for the good of the consumer of electricity. It is open to doubt and very open to question amongst electrical engineers as to whether local generation or long-distance transmission is the cheaper. If you allow the undertakings to remain in existence you will have an opportunity of testing this. I have seen estimates from the most eminent people, and I must say I have seen them frequently falsified. The only estimate that can stand is the estimate as to the actual figure tested by reality. The Dublin undertaking may certainly prove cheaper than the Shannon undertaking. In that case why not allow the two to remain in existence—why not have some competition amongst socialists? Why not have competition between the Dublin undertaking and the Shannon scheme, and if the Shannon Board can give better service the Dublin people are not so blind to their interests as to refuse to take it? It is a case, as I said before, of, rightly or wrongly, all hands to the pump. There is very grave doubt whether the Shannon can give cheaper service as a whole. But because the whole prestige of the State depends upon its success, no competition is to be allowed. I trust Senator Brady will introduce an amendment to prevent the Government, under any conditions, from taking over the Dublin undertaking.
I would like to ask the Senators if the Pigeon House scheme were allowed to work out its own salvation what would happen? The only source of revenue that the scheme has is the money paid by the consumer. We are told in the case of the municipal undertaking that profits should not be made out of the consumers. It is, in fact, out of the extra charges that have been put on the consumer over and above the running expenses and the overhead charges that these profits have been made. Whatever the undertaking is worth in excess of its liabilities has its source in the excess charges that have been made on the consumer. The Corporation, acting not for the consumers but for the ratepayers as a whole and for the whole community of the citizens of Dublin, would continue to administer the pro- perty as a whole. Might not the consumers say to the Corporation itself that it is guilty of confiscation? Might it not be said by them: "We have paid for all this thing by the overcharges that have been made on us for electricity, so that all the charges of the concern have been paid; this concern is our property and you withhold it from us"? We say that in this Bill it is retained in the interests of the community as a whole.
I do not like to interrupt the Senator but I would like to ask him if he allowed me to use his motor car for a year, and if I did not pay him for it what would he think? Would he think it reasonable?
In the one case the Senator is speaking of private property.
The Senator has referred to what the Pigeon House would bring as a going concern. But it is not a going concern. Under the circumstances of the taking over it would be a gone concern. There would be no goodwill in it. You could not continue it unless you superimposed upon the net-work of distribution another duplicate. One net-work would be taken over by the Shannon scheme and would be utilised as a transformer, and the other would be left as a mass of brick and mortar there. But suppose what was left of the Pigeon House scheme was put up for sale as a going concern, which is a misnomer, and that the condition were imposed that in the future it must be on the clear understanding that no profits should be derived from the consumers, you would have a different situation. It is stated that it is immoral for a municipality to derive profits from a service. I think it is more or less admitted by some members who were associated with the present Pigeon House project that it would be immoral to make a profit on a municipal undertaking.
It was admitted by two of them.
It has always been understood that municipalities should not enter into trade against a private firm. If the condition were imposed that in future no profits should be derived from consumers what would the goodwill be worth? What would it bring? Would it equal the present indebtedness that remains, the moneys that are still due on the Dublin undertaking, £460,000 and £22,000? Would it bring in anything like that? If an offer were made of something less than that what would the position be? I have always held the view that consumers of electricity in the city of Dublin are equitably entitled to be treated in this way. I have asked some who are competent or should be competent to forecast the future of the project to outline what privileges or benefits might accrue in the way of lesser charges and otherwise to the present consumers of the Pigeon House scheme in the course of one, three, five or ten years after an enlargement and an extension had been made to cope with the increased consumption. The result of further outlay on capital is only a matter of figures. A statement would have to be made and it would have to be a reasonable and safe statement, because the consumers would hold the undertaking to the terms of that statement. That is, as far as I can see, what the consumers of electricity in the city of Dublin can reasonably expect. They are safeguarded in that way.
In the first place it has been stated that no further costs would be charged to the consumers than they are at present paying. That has been stated with regard to the consumers in the City of Dublin. I do not know whether that is in the Bill. I understand that promise has been given by the Minister at one stage in the discussion, and that has not been departed from. I do not wish to reiterate what I have been saying, but I would like to ask Senator Brady what assurance other than they have got, founded upon reasonable expectations, could be given to the consumer as to the rates of charges for, say, the next ten years. That, perhaps, would be an equitable manner of dealing with the Dublin consumer and what he is asking for.
Senator Sir John Keane is not interested in a quarrel between socialists, and he does not think that one socialist should compensate another, but he is very much interested in the prestige of the socialist bodies. When a demand for compensation was first made, if I understood it aright, it was that all the capital outlay, roughly a million and a quarter in the case of Dublin, should be repaid to the Corporation or such other body acting in control of the rates and administration. Nobody in the House has advocated that to-day. Senator Brady has stated that he himself does not stand by the wording of the amendment which he proposed. I think it is reasonably clear that the amendment as proposed will not be acceptable to the House or to the Minister. I would be glad if, in replying, the Minister would make it quite clear exactly how the Bill stands with regard to generating stations, if the Board exercises their power of taking them over, and where these generating stations will not be used.
What generating stations?
Where any undertaking is taken over by the Board, and where there is a local station, and that station will not be further required, I am asking the Minister to make it clear what will be the position under the Bill. As far as I can read the Bill, I take it that the station will be disposed of, and the local body will get the proceeds, whatever they are. If I am correct, the only question it seems to me is as to what should happen in the case of a generating station taken over which will be required, or which should be kept as a stand-by in case it is required. Senator Brown suggests it is reasonable that the capital value of that station should be paid as the compensation. If I am correct in my interpretation of what will happen in the case of a station not required, then I say that what Senator Brown suggests is reasonable, fair and just, but it must be remembered the Bill provides that where an existing undertaking is taken over completely by the Board, the outstanding capital liabilities have to be met and accepted, and I am inclined to think that in a large number of, if not most, cases the liabilities still outstanding would be greater than the value of the generating station. If that is so, the Bill is really more generous than is supposed. It would cover the liability for capital liabilities simply to insert that there was to be compensation for the generating station. But if there are cases where the value of the station is greater, I would like these cases to be favourably considered as to whether it would not be right within the spirit of the Bill to provide whichever is the greater.
I feel to some extent like Senator Sir John Keane with regard to this amendment. I had an amendment down in connection with the Land Bill, asking the Land Commission when they are taking over the farmer's property to pay him compensation. It has been admitted that one-third of a farmer's property was taken over and the Land Commission was not allowed to pay compensation. During the debate very few Senators supported that amendment, but propaganda, especially by the Press, can do a lot, and judging by some of the speeches delivered here, I think the propaganda has worked well. The Shannon scheme is for the benefit of the whole of Ireland. Dublin and its suburbs will get the benefit of the scheme, and in addition it is asked that they are to get compensation at the expense of the rest of the country. I will vote against the amendment.
Senator Brady said that the position had to be faced up to and the situation met. My interpretation of these words is that in respect of the Shannon undertaking the citizens of Dublin labour under something in the nature of a grievance. What that grievance is I cannot see. The Dublin municipal undertaking may have been established for two purposes—one to supply the citizens with light and power and the other to make a profit. Dealing with the latter, how is it justifiable for the citizens of Dublin to set up a municipal undertaking for the purpose of making profit, which profit will go for the reduction of the rates of the general community? Most people admit that it is immoral to do so. It is so if you take the words of two distinguished officers of the Dublin municipality uttered as far back as 1925 when the Joint Committee on the various Liffey schemes was sitting.
Giving evidence before that Committee on the 5th February, 1925, the city electrical engineer, Mr. Kettle, in the course of his cross-examination was asked this question: "Do I understand you are not in favour of money going to ease the rates?" and he replied: "No, I am in favour of its going back to the electricity consumer." When the Town Clerk, Mr. Murphy, was asked the question, he said: "The word ‘profit' in regard to a municipal undertaking should not be applied," and that "the word to be used was not ‘profit' but ‘surplus.'" Referring to surplus, he said: "The fact that you earned more than you expended is proof that the price you charge is too much for the services rendered." When asked: "And to do more than that, to charge more than what should be charged, to meet the actual expenses of the undertaking is really immoral?" the Town Clerk replied: "Yes, as you are drawing money from the smaller body to spend amongst the others." Therefore, on the admission of two distinguished municipal officers, to make profits on a municipal undertaking, and to devote such profits to the relief of the rates paid by the general community, is immoral.
I could see that there might be a claim on behalf of the citizens of Dublin for compensation, provided that the generating plant and distribution net-work were taken from them. The purpose, I take it, is not to make profit out of an undertaking, but to supply the citizens at the most reasonable price possible with power and light. What is the position? The plant is being taken from them, but they are getting the very same results, and, further, their position is to-day that if there are any extensions they are not asked to meet any additional capital expenditure as regards the cost of machinery necessary for these extensions. Further, they come under a specialised Board, and in all likelihood that association will mean that they will have power and light at a lesser price. The figures of the experts definitely established that, and we should have some reliance on these figures. In addition, they will be supplied with installations at a cheaper rate than they can get them to-day in all probability. Senator Brady asked Senator Kenny "If you take my motor car and use it all the year, have I not a grievance?" That is not the parallel. If he took the car and used it all the year, then Senator Brady's claim for compensation would be justified, but if Senator Kenny gave his motor car, which was a better car, to Senator Brady, would he have a claim for compensation? Supposing I had a shirt or boot factory, and I have a generating plant to supply myself with power and light, and supposing the cost of production of power and light for my factory is 2d. per unit, and somebody comes along and says: "I will supply you with power and light which on expert figures and analysis will cost less than your own cost of production, but anyhow I give you the undertaking that the cost will not be greater." If I take the current from him, if it costs me less, what grievance have I?
Will the Senator explain where any undertaking is given in the Bill that the price will be less?
There is no undertaking in the Bill, but I understand the Minister gave an undertaking that the cost of electricity to consumers in Dublin would not be greater than at present.
It is even better than that in the Bill.
That is the position. The Dublin citizens would have a claim for compensation if their plant was being taken from them, but if the output of that generating plant was diverted to some other purpose and they do not get their power and light at a lesser cost they would have a grievance.
If the value of the Pigeon House generating station is £100,000, Senator Douglas showed that the liability under the Dublin Corporation scheme is about £400,000, therefore, if the Dublin undertaking is taken over it is obvious that the compensation would be equal to £300,000.
I think, with regard to this claim for compensation on the part of local authorities for electrical undertakings taken over by the Board, that there is some misunderstanding. According to a remark by Senator Colonel Moore, the impression seems to be that if the undertaking is to be bought it is the taxpayers as a whole who will pay the compensation.
I gather, as far as I can read the Bill, that if, for instance, the citizens of Dublin are paid, or the Dublin Corporation is paid, compensation for its generating station it is the consumers of electricity in the Dublin area only who will pay that compensation, so that it is not a case of confiscating the interests of Dublin citizens in the interests of the community as a whole. The position would be, therefore, that the cost of the electricity in Dublin would be the cost of production plus the cost of distribution plus the cost of compensation that would have to be paid to the undertaking. It would mean, in all probability, that the cost of electricity will be higher as a result of that than it is to-day and what people would gain by a reduction in rates, if that compensation were put towards a reduction in rates, they would pay in an increased price for electricity. From that point of view the compensation, in my opinion, would be worthless. The argument that the consumers have already paid for the station is really an argument that cannot be sustained, because on the same basis it might well be argued that the consumers of stout have purchased out Guinness's brewery years ago and that the brewery belongs to them. The same argument might, with equal force, be advanced in the case of a private producer of electricity, who has been charging high rates for it. It might be argued that he is not entitled to any compensation because the consumers have bought out the undertaking long ago by the profits they have paid. The difficulty really lies in the fact that if you compensate a municipality it is the people in that municipality who themselves pay compensation to themselves. From that point of view it would be really absurd.
Regarding the question that a municipal undertaking should never make profits, I do not agree with that. If they make a profit and put it towards a good purpose I think they are quite justified. For instance, that magnificent building, the City Hall in Belfast, has not cost the city one single penny. It was paid for out of the profits of the municipal gas undertaking of the city. If you put the profits of a municipal concern towards a purpose such as the purchase and equipment of a park for public recreation or towards educational purposes, I think that is quite a legitimate profit, and one that should be encouraged. But if you make a profit simply in order to reduce rates for general purposes, then I say, of course, that is quite an improper transaction. On the whole I fail to see how this compensation is going to benefit anybody, because the people who are to get the compensation are the people who will themselves pay the compensation.
I would like to ask the Minister to explain how the people of Dublin are to pay compensation for this concern.
I was going to suggest that the Senator should point out to me where it is stated that the citizens of Dublin should pay. I cannot deal with what the Senator's imagination runs to. We have an amendment before us which comes to this: that on acquisition, the Board decides (a) if it is going to use a generating station belonging to a particular undertaking, or (b) that it is not going to use it, and whether it uses it or not it has to pay compensation. Let me apply that to Dublin. With regard to Dublin, the position at the moment is that there are outstanding debts and liabilities, with regard to the Pigeon House, and with regard to the distributing station of at least £130,000. There are eleven years of unredeemed loans still to go, and yet this year I have had an application from the City Commissioners asking for permission to spend £41,000 for extra plant on the ground that the original plant on which eleven years' redemption has yet to be paid, is worthless. Take Senator Brady's amendment. I would take over the whole liability. I would proceed to pay the eleven years' instalments that have yet to be redeemed, and, in addition to that, I would pay a fair value as a going concern on an undertaking which has really a scrap value. I would hand back the value of the scrap, although I took over the liabilities of a station, which is worth nothing more than scrap at the moment, and that would go to the ratepayers. That is an indefensible proposition. That is the proposition that is here.
I would ask in that connection, can anybody imagine a value as a going concern in a generating station, divorced from a transmission system or a generating plus transmission system, and divorced from a distribution system? What is the use of generating and transmitting electricity, if it is not going to be sold? That is what is to be valued if it has a fair value as a going concern. I hold that the person who is going to take over the entire liability in connection with the proposed building of a station and of the installation of the plant, the man who is to meet the bill for outstanding costs, should be the man to get the proceeds, if proceeds there be from any sale. Senator Sir John Griffith has put the matter on a different footing altogether. He said, followed by Senator Brown and Senator Douglas. that it is a question of a stand-by. That I can deal with in another way.
Senator Toal talks about a gas and an electricity undertaking run together. There is a section in the Bill dealing with segregation. That company will have to segregate the undertaking into two concerns. Obviously, if the Board takes over the electricity network it would have nothing to do with the mains in connection with the gas, and it would pay for the electricity undertaking alone. There would have to be segregation in regard to that, and the Board would pay compensation on whatever proportion of the profits was appropriated to electricity. The rest would carry on as before.
Senator Kenny has asked me, and it has been a question raised in interjections through the House, about the Dublin consumer. I stated, in order to prevent what I described as a wholly illusory fear entertained by certain people with regard to the Dublin consumer, that I would put into the Bill a clause that no consumer in an area acquired should be charged for the same service any price higher than the price charged immediately before acquisition. I was told when I put forward that that it did not give much hope. It meant, the pessimists told me, that they were going to pay the amount they had paid before, and that it was stereotyping the position, and that that was all the Shannon would represent to them. Consequently I advanced a step further. Let us take the Dublin case again. A liability is taken over from Dublin which is very small. Against the Dublin consumer will be set that small liability, but that liability is a decreasing one from year to year as the capital charges are paid off. It will be done as a business arrangement. But I was asked solemnly to put into the Bill that the benefits of the decreasing liability should be given, not merely to Dublin, but to every other area in the same position. I think Section 59, sub-section (1), is intended to give that very benefit. It gives it by a peculiar wording. It says that "no charge shall be put on an area of an authorised undertaker which is a charge incurred in connection with the taking over of any other area." In other words, each area's liability is apportioned as against itself. I am prepared to stand by that amendment, but if the pessimists are in a majority in this House and want to get back to another item and say: "You will charge us-only what we were charged for the same type of service before," I will accept that but I do not think it is reasonable to ask that both provisions should be inserted. Let them make their choice. If they are prepared to pay a charge not higher than the previous charge, I will accept that, but I think it is better to leave the words as they are in Section 59, which states that an area shall be saddled only with its own liability. On this matter of the value of the stand-by in reference to which Senator Sir John Griffith has spoken, Senator Brown said that he thinks it is a proposition that cannot be denied that the capital value of the generating station to be used should be paid or should be somewhere credited to the particular people who are going to get the use of it, the people to whom the service is going to be rendered from the generating station. I query that and say: "Certainly, if it is to be used—for whom?" I want to follow that up in a series of steps.
I can imagine five positions in regard to Dublin, if I can take it as an example. First of all, it may run on as before, no acquisition, no taking of Shannon current, simply going along as it is at the moment. No question of compensation arises there. Supposing there is acquisition and the matter remains as before except that the Board controls instead of the City Commissioners. Say the Shannon current is not taken and the generating station is used. From that generating station electricity is distributed over the present distribution system to the present consumers, the only change being that the Board is in charge instead of Commissioners. Again no compensation arises. I take the third point. Supposing the station is acquired, that there is a junction with the Shannon scheme and that the station is kept partly running because it is going to be used as a stand-by. It is going not merely to supply Dublin consumers but people in the neighbourhood of Dublin. That is the third phase, and I want to leave that for the moment. Supposing it is acquired and that the generating station is scrapped, that the Board simply says: "We will not use that at the moment, and we do not think there is going to be any cause to use it; the station is to be closed down." The Board shoulders entirely the responsibility of the Dublin undertaking and its present liabilities—the liabilities for the station and the net-work. Again I hold there is a question of compensation. There is further the value of the scrap. The station may be sold and the value of the scrap credited to the consumer. Certainly that is quite fair, but it should not be given to the Commissioners to distribute to the general ratepayer.
The last position is that there would be acquisition and the station would be used not specifically for Dublin but that it would be simply kept there as a stand-by to be used as required. Really positions 3 and 5 are the same—Dublin used as a stand-by. If that is the position we have argued about, I think nobody can deny that that case can be met. Possibly, I am not sure, under Section 61, which deals with the generating plant, there might be a case for enlarging that section or making explicit what I believe is implied in it. It can be argued that if Dublin is going to be kept running and that the same costs are incurred in keeping it going, or that the value of the plant as a stand-by is simply as it is now, then the value of that should be apportioned against the people who are going to get service as a stand-by from it. That I am prepared to meet.
I thought I put the last case the Minister mentioned.
The amendment does not even mention the stand-by. It has nothing to do with what I am speaking of.
Would the Minister give an undertaking that he will bring in an amendment on the Report Stage on the lines he has suggested dealing with a stand-by?
I suggest that those who are interested in the matter should think of framing an amendment. I hold that Section 61 clearly meets the ordinary type of case that is likely to occur. Take Section 61 for the moment. It says that in certain circumstances the generating station may be closed down. It is rather detailed. Sub-section (3) states: "When an authorised undertaker ... ceases to use a generating station as a generating station ... the undertaker may with the consent of the Board and shall, if so required by the Board, maintain such generating station or any part thereof for the purposes of the Board and at the expense of the Board."
Do I take it from the Minister that he considers keeping it as a stand-by and cease using it as a generating station? When reading the section I did not think that.
The closing down of the generating station is a closing down wholly or in part. One gets in sub-section (3) the statement: "maintain such generating station or any part thereof for the purposes of the Board." That would really be the stand-by purpose. That is really what is meant in that section. It is to be done at the expense of the Board, and the Board will recoup itself for what it pays by charging the consumers who are to get the service or the consumers who are insured against break-downs by having that stand-by there.
I think that the difficulty really lies in the first portion of sub-section (3), which governs it, by stating: "under this section ceases to use a generating station as a generating station." The impression some of us had was that these words would not cover the case stated by the Minister. I think what is really required is that the matter should be looked into carefully between now and the Report Stage. If the Minister is satisfied that the section covers the matter we do not want to press it.
I think one must take into account the two values the station would have, the value as a producing plant producing electricity for sale, and its value as a stand-by and as an insurance against loss. That is obviously the lesser value. One could not have the same value declared in both cases. The section speaks of the cesser of use as a generating station. That is as a producing plant, and it might be maintained as an insurance. There is another objection that may be raised that this is only where an authorised undertaker ceases to use, and where the Board acquires the undertaking and then ceases to use it. When the Board acquires, it acquires all the assets and all the liabilities. I put it to Senators that it is hardly conceivable that you will have a plant whose value, separated from transmission, is going to be more than the liabilities at present upon it.
If it is merely a stand-by plant it would be hardly fair to charge the running costs to Dublin.
If the Senator means that the Cork and the Dublin station were to be held in reserve and as a stand-by it would not be fair to charge against Dublin only a reserve which is for the greater portion of the country, I agree. I do not think any Board would do it. It might be argued that the Board may do it. There appears to be apprehension through the city that the Board is going to set out to irritate its best customer. It will be to the interests of the Board to see that its best customer is favoured in every way. Why people should imagine that there is going to be a very definite drive by the Board towards the annoyance of its best customer is a thing I cannot conceive. It may be necessary to enlarge Section 61 so as to say that the liabilities of a generating station used as a stand-by should be transferred to those who are actually benefiting by the stand-by service. I would like if Senators would consider that, and let me have their ideas of what amendment is required in Section 61. I will be prepared to meet them then. I am not prepared to meet them whether the Board itself uses or does not use the generating station. In one event it hands over the station, and I am asked that the proceeds of the scrap of the station are to be given over to the ratepayers, and in another event we are to consider the value as a going concern torn away from its value as a distribution or transmission system.
As I pointed out, I laboured under a great disadvantage in moving the amendment in the absence of Senator Hooper. I am at a still greater disadvantage in considering what I should do with the amendment in his absence—whether I should ask leave to withdraw it or to put it. I am inclined to the former course. I cannot help thinking that, whatever the fate of the amendment, we have had a very interesting and illuminating discussion. Some Senators are very much amused at that. I do not see why there should be any cause for amusement. I think, after all, some points have been cleared up. If I could interpret the mind of my colleague in his absence, I think his object was to include compensation for any value the Dublin generating station might have. That may not have been made clear in the amendment, but the undertaking we have got from the Minister with regard to the value of the station as a stand-by station shows that there is a great deal more in the amendment than some Senators seem to think. I beg to withdraw the amendment with the leave of the House.
I want to make it clear that the value should be the excess value over the liability of the Dublin station as a stand-by.
I think it is very objectionable to have all this discussion for the sake of talk. If a Senator puts down an amendment he should allow it to be moved. I do not know whether this amendment should be passed, but we have been talking here for the last hour and now the amendment is being withdrawn. I protest against that.
CATHAOIRLEACH
I will put the motion that leave be given to withdraw the amendment.
Motion put and declared carried.
Amendment, by leave, withdrawn.
I move:—
To add at the end of Section 39 a new sub-section as follows:—
"(14) Whenever a person transferred by this section from the service of the former undertaker to the service of the new undertaker is required to take up duty in an area other than the area where he was formerly employed, the new undertaker shall pay to such person such fair compensation as the Board or (in the case where the Board is the new undertaker) as the Minister may approve or direct."
All I can say in regard to this amendment is that it has been suggested to me by people outside, and I think the Minister gave an undertaking in connection with it in the Dáil. Another amendment in similar terms was moved in the Dáil and the Minister said that he would be prepared to accept some items, that he thought it might be a hardship if a person receiving a low rate of wages were moved from Dublin to some place like Limerick and had to bear the expenses of removal. I do not intend to elaborate the matter, but I think the Minister should be prepared to accept this amendment in a modified form.
The Senator has quoted my remarks. They obviously apply to expenses of removal, but the term "compensation" is much wider. I am quite prepared to make the Board accept liability for the expenses of removal of certain officials but you could not ask me to say that in the case of a highly-paid official removed, say, from Dublin to the station at Ardnacrusha— incidentally some of the highly-paid officials in Dublin have asked to be removed to Ardnacrusha—that there should devolve on the Board a liability to pay the expenses of removal. I only referred to people who were in receipt of wages that certainly would not reach the engineer's scale, people in receipt of low wages, to whom the expenses of removal would be a hardship. It would have to be limited and it would only apply to the expenses of removal in the case of lowly-paid officials.
I ask the leave of the House to withdraw the amendment as I see the weakness of my position.
CATHAOIRLEACH
Are you wise in withdrawing the amendment? The Minister has offered to accept the amendment if you change the words "fair compensation" to "expenses incidental to removal."
There will have to be regard to the application of this amendment to people below a certain rate of wages.
CATHAOIRLEACH
Better let the amendment stand over for the Report Stage and in the meantime the Senator can consider what the Minister is offering him.
Question—"That Section 39 stand part of the Bill"—put and agreed to.
I beg to move amendment No. 32:—
New Section. Before Section 40 to insert a new section as follows:—
"40. The rates for electricity charged by the new undertaker under Section 39 of this Act shall in no case exceed those charged by the former undertaker."
This is a very simple amendment that requires no elaboration. The Minister a moment ago said he was prepared to insert such a provision.
And to take out sub-section (1) of Section 59.
I will have to consider that and bring forward the amendment on the Report Stage.
CATHAOIRLEACH
If Senators would consider these matters beforehand they would not put down these amendments.
This is entirely a new point which has not arisen before.
Oh, no. This point was raised in the Dáil and there were two amendments put down. One was put down by myself and one was put down by a Deputy on my suggestion, and the Dáil, having its choice between saying what is set out in this amendment, that the maximum charges for electricity shall in no case exceed those charged previously, and what is set out in Section 59 (1), adopted 59 (1) in preference to this, I would like to repeat what I have already said in the Dáil. I think it is quite unfair to have both put into the Bill. There is a good case for one, but not for both.
I will let the matter stand until the Report Stage, and for the present I ask leave to withdraw the amendment.
Does this amendment mean that in no case shall the charges for electricity be more than have been previously charged?
That is what the Senator says.
Is the Minister wise in accepting that?
Amendment, by leave, withdrawn.
SECTION 40.
I move:—
To delete the section.
I put down this amendment in order to ask the Minister to state what the object of the section is. It appears to create a certain temporary disturbance in the work of an existing undertaker. The business may be taken over for a period and then handed back to him. It is very hard to see the object of that. Why not take it over completely or leave it alone? It seems to me to create a lot of disturbance without any corresponding advantage.
Would the Senator advert to (g) in sub-section (3), which says that the authorised undertaker at any time during control may require the Board to acquire the undertaking. That has been, in fact, described as control by agreement. I described it as a half-way house towards acquisition. I think there are cases in which an undertaker would like to have a chance of saying to the Board: "You gave me a scale of charges. I do not think that an undertaking can be run on these charges. Come in and run it yourself." The undertaker has now this advantage: he can say to the Board: "Take the further step of acquisition." There can be no handling of property in such a way as to depreciate it and then hand it back for the purpose of acquiring it. With sub-section (3) (g) in the section I do not think there is any harm in leaving the matter as it is.
I understand the Board can compulsorily take control.
The Senator's point was: "Why not acquire completely?" The undertaker can insist on acquisition the day after control. In so far as the people that Senator Keane has in mind are concerned, they are people who would rather be acquired than controlled. They are met, because they can insist on acquisition right away. Why should the Senator rule out the case of an undertaker who might like to be controlled rather than acquired, and see if the Board could run it better than the previous owner did?
I think there is a verbal error in sub-section (3), line 18, of the clause. The word "he" ought to be "it."
CATHAOIRLEACH
With regard to paragraph (e), which deals with profits, I thought the essence of this was that there was to be a minimum charge made on the consumers.
This covers the case of a company already running, and entitled to run, and being controlled by the Board for a period in order to get its undertaking in a better condition.
At the current charges to the consumer?
At whatever charges the Board might think fit to appoint.
Certainly; and I think the profit will be paid into a renewal fund, etc.
Section agreed to.
Sections 41 to 44 agreed to.
SECTION 45.
(5) Nothing in this section shall authorise the Board to acquire, use, or otherwise interfere with compulsorily under this section any land or water which at the date of the first publication of notice of the intention of the Board to consider the making of a special order in that behalf belongs to a gas or water undertaker and is used or authorised to be used by such undertaker for the purpose of his undertaking.
I have a number of amendments on the Order Paper, all intended for the protection of the Grand Canal Company. I have had a conversation with the Minister on this subject and from what he says I think it is quite clear that if they are allowed to remain over until Report there will be no difficulty at all.
CATHAOIRLEACH
The amendments will stand over until the Report Stage.
Agreed.
Amendment 36 reads:—
Section 45, sub-section (5). After the word "water" in line 15 to insert the words "or any easement or other right over land."
It is almost consequential.
CATHAOIRLEACH
What had you in your mind? Easements seem to cover them all.
I simply followed the Minister.
Amendment put and agreed to.
Amendment 36 reads:—
Section 45. To add at the end of the section a new sub-section as follows:—
(6) If the exercise by the Board of the power conferred by this section to acquire compulsorily any land or to acquire or use compulsorily any easement or other right over land should result in interference with any pipe, main, or other work belonging to a gas or water undertaker so as to render such pipe, main or other work useless, or of diminished value, or should otherwise result in loss or expense to such gas or water undertaker, then the Board shall pay to such gas or water undertaker such sum by way of compensation for such loss or expense as may be fixed by agreement, or in default of agreement by an arbitrator appointed by the Minister.
I think I shall ask leave to withdraw it and raise it on the Report Stage.
Amendment, by leave, withdrawn.
In the last line of sub-section (5) of Section 45 there should be a verbal correction.
Question—"That Section 45, as amended, stand part of the Bill"—put and agreed to.
Section 46 agreed to.
SECTION 47 (5).
(b) authorising the compulsory acquisition or use of, or interference with any land or water which at the date of the first publication of notice of the intention of the Board to consider the making of the order belongs to a gas or water undertaker and is used or authorised to be used by such undertaker for the purpose of his undertaking.
I move amendment 37:—
Section 47, sub-section (5). After the word "water" in line 5 to insert the words "or any easement or other right over land."
Amendment put and agreed to.
Amendment 38 not moved.
Question—"That Section 47, as amended, and Section 48 stand part of the Bill"—put and agreed to.
SECTION 49.
(1) The Board may manufacture and the Board and also any authorised undertaker with the consent of the Board may provide, sell, or let on hire any electric lines, fittings, apparatus, and appliances for lighting, heating, motive power or any other purpose for which electricity can or may be used and may connect, repair, maintain, and remove any lines, fittings, apparatus, and appliances so provided, sold, or let on hire, and may in respect of such lines, fittings, apparatus, and appliances demand and take such remuneration or rents and charges and make such terms and conditions as may be agreed upon.
I move amendment 39:—
Section 49, sub-section (1). To delete in line 16 the words "The Board may manufacture and."
This is to prevent the Board from manufacturing. The Board still retains, under this section, power to sell and hire, but if this amendment is passed it will not be allowed to manufacture. I think the Seanad is getting weary of these arguments, but you cannot vary them. I ask the Seanad do they know of any instance where a body of this kind has manufactured successfully? I ask them to agree with me that manufacture is a highly specialised operation that people are brought up to and is totally alien to Government or State Boards. You have got one illustration which, of course, does not count very much—you had recently the attempt of the Post Office to manufacture—but you have had similar illustrations everywhere. The experience of the British Government during the war did not count. The war is no analogy. Time, and not production at an economic rate, counted. What is the necessity for this when you have huge institutions like the General Electrical Company, Thompson-Houston, and others with large resources who have made a speciality of their business? It is absurd to think that you can have any State concern manufacturing more cheaply than these institutions. Even if they make profits the profits are small compared with their turnover. Those profits are made as a result of brains, technical aptitude, and one hundred and one other considerations that no such Board will ever permit of. You call this permissive, but I can see all kinds of arguments and specious reasons being advanced to the Board as to why it would be desirable that it should manufacture, perhaps beginning in a small way but gradually expanding; before the Dáil will ever know of it this thing will grow up and the next thing is that we will discover, long after, revelations like those of the Post Office. If there were any remote chance that they would give you greater service I would let the matter stand. But there is none, and I really think this temptation should be kept out of the way of the Board.
I hope the House will not accept this amendment. If there is one thing more than another that operates against the extended use of electricity it is the cost of electric fittings. They are sold at an enormous cost and obviously at an enormous profit. Quite recently I had an opportunity of inspecting an invoice of an electrical firm. They were selling, wholesale, to retailers at a discount of 55 per cent. or 60 per cent. for cash. In other words, what the retailer sold at £100 he only paid £40 for if he paid cash down, which shows an enormous profit. Surely the Board is going to be a miserable failure if it cannot turn out electrical fittings at prices considerably less than those charged at present. It is the principal obstruction to the poor and middle-class people getting any electrical light. Senator Sir John Keane makes a lot about some mistake which was made by the Post Office factory. He need not go to the Post Office for mistakes of that kind.
We need not condemn State enterprise because one failure can be quoted. Private enterprises have been guilty of greater mistakes, and unfortunately have caused greater losses to their shareholders. Some of the principal British concerns connected with electricity have gone into bankruptcy recently, and these should be tabulated and read out to the House as examples of the inevitable failure, not of State, but of private enterprise. The failures of private enterprise are lost and forgotten because no one takes sufficient interest in them to draw attention to them in Parliament. I hope, in the interests of the success of the scheme, that the section will remain as it is.
May I point out with reference to what Senator O'Farrell has said that his argument lies really against the retailer and not against the manufacturer. It is by no means clear from what he stated that if the Board manufactured at a very much lower cost than the present manufacturers they still would not be compelled to give a discount of 60 or 40 per cent. to the retailer. I have heard cases in which 95 per cent. was given.
I oppose this amendment because I think it is entirely against the spirit of the times to suggest that anything that can be manufactured in Ireland or in Dublin by a Board should not be preferred to that coming from an outside source. We have an instance in the Great Southern Railways' Works at Inchicore. There the Railway Company employ hundreds of men and the work is done as efficiently and as cheaply as it could be done in any country. I think the first preference should be given to anything that can be turned out in the way of manufacture in our own country.
Might we not have the views of the Minister on the subject? It is a very debatable point whether it is advisable for any Department of State to enter into competition with private enterprise in manufacture. Of course a powerful Board can always obtain, as cheaply as possible, all the articles they require under a system of tender.
I am definitely opposed to this amendment. It is not at all new that powers like this should be looked for. Any electricity supply company which has taken the necessary powers under its articles of association can manufacture, and any local authority which is an undertaker or even a joint electricity authority may manufacture the electrical appliances if authorised to do so by special Act or order. I think it is a very necessary power to give to this Board, even if it was only to guard against the point that Senator O'Farrell has raised. If the Board finds itself able to buy, as it will be able to buy, more cheaply than an ordinary individual, then, although I do not see why it would ever embark upon manufacture, still it is necessary to give it this power.
It is well to remember that this Bill has to be related to the Industrial Property Bill under which Senators will remember that in the case of a patented article, if not manufactured on a commercial scale within the country within a certain number of years, the licence may be taken from the ordinary patentee and given to anyone who will work the patent. It may be that, in some instances, the Board should become the holder of the licence rather than anyone else. Recently there have been revelations in the English newspapers where four large tenders had to go outside England in order to break English rings. Two of these rings were retail rings and two of them were manufacturers' rings.
I think it would be a very good thing to leave that provision in the Bill as long as the auditor, who goes into the accounts, gives us the information year by year as to what the cost of manufacture was so that we may know where we are, and whether the thing is going along on good business lines or whether the articles, as manufactured, exceed the price at which they could be purchased in the open market. That is what Senator Sir John Keane wants—correct accounts.
Sub-section (4) indicates that the Board shall keep separate accounts in relation to all its dealings under this section.
That does not satisfy me a bit. You are going to apply commercial accounts to the manufacturing activities of a Board which, as a manufacturing Board under this Bill, has got to pay no income tax and is to pay no rates. There is no comparison here with an outside manufacturing commercial firm. It is a prostitution of language to suggest that there is. Senator O'Farrell talks about shareholders losing in certain concerns. Let the shareholders lose. That is the whole basis of private enterprise. They take the risk. Some lose and some make. The Government has nothing to do with it. It is private money that comes in and fertilises the whole thing.
Would Senator Sir John Keane accept his own argument that because one private company fails, to the detriment of its shareholders, therefore private enterprise is proved to be inefficient?
No. The question here is a much bigger one. I ask you to show me anywhere where Government enterprises have succeeded, and if you show me one I will give you a whole array of failures as against that. And all this loss has to be provided by the people. It is the people who will have to pay, unless this Board makes a profit. I would like to know where a Government enterprise has ever made a profit. They always handle work badly. That is the record all through history.
But leaving that aside, there is a much bigger issue involved. It is contemplated that we are going along altogether by the aid of State money. That is the tendency that is creeping in, and inevitably that tendency is to discourage outside money coming in. Of course, if the State think they are going to finance all the trade and business and that they are to go on flirting with socialism without any deterrent effect on private enterprise, well and good, but I deprecate the creation of such a situation. I have heard people that control big financial interests express themselves as very much alarmed at the way this policy of socialism is creeping into Ireland. There was the case the other day of the Liffey scheme, where there was £1,000,000 of money prepared to come in and to be spent on electricity, but that scheme was extinguished. If we are going to get on without the outside big investment market, well and good, but I think you are running a grave risk. It is fundamental to my opposition to the Bill that you are trying to do by the State what you never will efficiently do, and you are going to deter private enterprise. People will come to realise this and it will be only a short time when you will see men like Senator O'Connor finding their own interest threatened rallying together in opposition to such proposals.
The Senator has made two or three points which cannot be allowed to pass unnoticed.
How can the taxpayer be mulcted under this? There have to be separate accounts, and the Board have to make both ends meet——
Suppose they make a loss, who will pay?
The Senator started off with one item, namely, that the whole operations will be free from income tax, and so on. He throws in the items that are favourable to back up his unfavourable arguments. There is no compulsion on people to buy the articles manufactured by this Board. If they cannot manufacture at a cost at which they can undersell other people who are overcharging, then obviously no manufacture will take place. As to technical capacity and ability and so on, the Senator says the Board never can have them. The Senator undoubtedly is doing his best to pass a whole lot of unnational opinion along in reference to this scheme through newspapers, propaganda and otherwise.
CATHAOIRLEACH
I shall now put the amendment.
Instead of calling for a division, I shall be satisfied if the names of those supporting the amendment are recorded, as has been done recently in the Dáil.
CATHAOIRLEACH
We have no machinery for doing that.
Amendment put.
The Committee divided: Tá, 3; Níl, 23.
Tá
- Sir John Purser Griffith.
- Henry S. Guinness.
- Sir John Keane.
Níl
- T. Westropp Bennett.
- William Barrington.
- Sir Edward Coey Bigger.
- P.J. Brady.
- Samuel L. Brown.
- Mrs. Costello.
- John C. Counihan.
- William Cummins.
- The Dowager Countess of Desart.
- James G. Douglas.
- J.C. Dowdall.
- Sir Nugent Everard.
- Benjamin Haughton.
- Patrick W. Kenny.
- Thomas Linehan.
- John MacLoughlin.
- Joseph O'Connor.
- John T. O'Farrell.
- Michael F. O'Hanlon.
- Bernard O'Rourke.
- James J. Parkinson.
- Thomas Toal.
- The Earl of Wicklow.
Amendment declared lost.
Sections 49, 50, 51 and 52 agreed to.
Amendment 40—to add new section before Section 53—not moved.
Section 53 agreed to.
SECTION 54.
Amendment 41 to Section 54, not moved.
Sections 54 to 58 put and agreed to.
SECTION 59.
(1) The Board may make scales fixing the methods of charge and the rates of charge for electricity (whether supplied in bulk or otherwise) by the Board and by authorised undertakers and permitted undertakers respectively and may at any time and from time to time as the Board thinks fit revise or revoke the scales so made or any part thereof or any particular item therein. The Board in making scales fixing the methods of charge and the rates of charge for electricity supplied to consumers (including consumers in an area which was the area of supply of an authorised undertaker whose undertaking has been acquired by the Board under this Act) shall not include in any scale applicable to such consumers any charge in respect of charges for distribution in any other area including liabilities assumed or payments made by the Board in consequence of the acquisition by the Board under this Act of any other undertaking.
(5) So long as any such scale as aforesaid is in force it shall not be lawful for any authorised undertaker or any permitted undertaker to whom such scale applies to give any supply of electricity to which such scale applies at any other price than the price fixed by such scale, and every authorised undertaker or permitted undertaker who gives any supply of electricity in contravention of this section shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding five pounds for every day during which such supply is so given.
I move amendment 42:—
Section 59, sub-section (1). Before the word "rates" in line 45, to insert the word "maximum."
I am not quite clear what the intention of this section is, but I imagine it is that the Board shall fix exact and definite rates and not allow any elasticity to the undertakers. The Board should aim at securing certain maximum rates, and if the undertakers want a lower rate they should be allowed to do so.
I decidedly object to this amendment. The net effect of this amendment would be that the Board would have no powers with regard to tariff policy, striking of rates or devising schemes to attract consumers. That would be entirely ruled out. All they could do would be simply to fix the maximum, and there would be no power in the Board to protect the consumer against maximum charges which might be properly instituted at a particular time, but which might be clearly shown at another time to be more than was necessary. The Board should have power to go into every detail of the rates and to cut down to the bone so that the consumer would be attracted to the fullest extent. The Board will be run on the assumption that the greatest protection will be given to the consumer. It is to be run on the basis of neither profits nor losses. The rates must be left entirely to the Board.
Could not the maximum rates be the bone rates? If the undertaker wants to go below these rates why not allow him to do so? Is the undertaker that remains to be given any discretion at all about rates? Is he to take the whole tariff from the policy of the Board and to become a hewer of wood and a drawer of water?
The point is that there are different scales and rates for different classes of consumers. There are seven or eight kinds of rates in force in a particular area. There are also cases at the moment in which rates are made which are uneconomic, and the ratepayers have to pay for it. There should be protection against that.
Amendment, by leave, withdrawn.
I move:—
Section 59, sub-section (1). To delete all after the word "charge" in line 55 down to the end of the sub-section and to substitute therefor the words "other than the cost of the bulk supply as defined in this Act and the cost of the distribution in the area of the undertaking."
I am moving this by request. I look upon it as a drafting amendment. The Minister will tell us if there is more than that in it.
Yes, there is considerably more.
The words in the section state that no charge shall be included in respect of charges for distribution in any other area, including liabilities assumed, and so on. The amendment proposes that the cost in each area shall be the cost of the bulk supply, plus the cost of distribution. I understand that the cost of distribution also covers the cost of the acquisition of the undertaking; and if it does, my amendment seems more compact and expressive than the words in the section, that is, if the cost includes the cost of acquisition. If it does not mean that I will not press the amendment.
That is really my difficulty. I would like to give notice that sub-section (1) of 59 will have to be re-amended before we get the intention made clear. I have been advised that the cost of distribution would be taken to mean the actual operation cost in the area. One could not set that against the capital liability. I think also that Senators might well have noticed this, that it is a desirable thing in areas indifferently that the Board should have a right to make some small additional charge in order to pile up a reserve fund that may have to be used to support uneconomic areas, these uneconomic areas having to pay their way eventually. I intend myself to bring forward certain amendments on the Report Stage to 59 (1), so as to make it absolutely clear what was expressed in the Dáil and to give a safeguard that any liability against any area would only be its own liability. In that way there would be put on all of them indifferently a charge for building up a reserve fund. The sub-section will have to be re-amended, but I would have a decided objection to the proposed amendment.
Would it not be desirable in line 56 to add after the word "distribution" the words "and transmission"? In a certain area transmission might be costly and any area should only pay its appropriate percentage of the cost. Transmission is a factor as well as distribution. I might, at this stage, also say that I do not see how that section could be regarded as a substitute for one I previously brought up. One is to ensure that a certain area should be kept water-tight for the purpose of costs, but the demand that no rate shall be increased is a totally separate matter. When the Report Stage comes on I shall ask the Minister to consider the previous amendment, and leave this section stand.
That is what I have a decided objection to. People must take their choice. I do not think it is fair to tie up the Board in this way. Let it be clearly stated that there is to be no possibility of charge against the particular area of another area's liability. That can be stated clearly. If an area has a decreasing liability it gets, from year to year, the advantage of that. On the other hand, if people would rather have the security of paying no rates higher than previously charged, that is an absurd proviso. It is not that the Board could stereotype that charge. One could have that amendment in opposition to 59 (1). It is a much simpler amendment.
CATHAOIRLEACH
Is Senator O'Farrell moving his amendment?
CATHAOIRLEACH
The Minister says that the section does not carry out all that he intended but that he proposes to introduce an amendment to it on the Report Stage. We had better wait until we see that.
Is it understood that if there are 500 authorised undertakers that each of them has his own area and schedule of prices, all different from one another? Is there any such intention?
The position is at the moment that each authorised undertaker has an area marked out, and it was supposed that no one could sell within that area but that undertaker, but there are pirates within those areas. The unauthorised undertaker has no special area marked out for him. What is to be the future? That is where I regard this sub-section as being deficient. The effect of it would be in relation to Dublin briefly this, that one would have one's area served by a transformer station and there would be a rate for the Dublin consumers, another rate for the Rathmines consumers, and still another for the Pembroke consumers. There would be three other rates for additional consumers in these areas, and there would be a seventh rate for people in the ring outside those areas. That is a wholly absurd proceeding and that would be what would be imposed upon the Board under this section. I want to amend it so that the area for the future would be the area served by the transformer station. There are a variety of circumstances to be taken into account before you get your area delimited.
Amendment, by leave, withdrawn.
I am not moving amendment 44, to Section 59 (5). I am withdrawing it in view of what the Minister has said.
CATHAOIRLEACH
We are really turning this Committee into a Report Stage. We must be careful that we will not turn the Report Stage into a Committee Stage. In view of what the Minister said about this section, it is, however, better to withdraw this amendment and then see what the position will be when we come to the Report Stage.
Amendment not moved.
I move amendment 45 standing in the name of Senator Sir Thomas Esmonde:—
Section 59. To add at the end of the section a new sub-section as follows:—
(7) The scale of charges to be made under this section shall be such as will provide an income sufficient to meet the expenditure of the undertaker in carrying on his undertaking.
It has been pointed out that in this section, which deals, amongst other things, with the making and revision of charges in the case of authorised undertakers, there is not a definite provision that the charge shall be such as will cover the actual cost of the undertaking, the actual cost that is sufficient to meet the expenses of carrying on the undertaking. The effect of the amendment is to ensure that the charge will be sufficient to meet the expenses and only the expenses involved in carrying on the undertaking. I move it accordingly.
This amendment would make it applicable to companies, and if companies operate for the future as authorised undertakers they must be allowed to make profits. There must be some return on the money invested. In addition, supposing that the amendment had to be construed rigidly by the Board, it would always have to strike a rate which would be sufficient to cover every conceivable item of expenditure that might fall within the year. You might, in fact, get charges that would be too much. They would always have to keep them on the right side of the line. I spoke of uneconomic areas. Certain rural areas must be electrified. Certain areas in portions of the country do not seem to offer a return at once. One cannot enforce that section against these areas. They will have to be allowed a certain period in which a deficit will have to be made up out of some reserve fund. On the whole, I think the amendment has a wider application than the Senator intended. I think what he is aiming at is that the Board, having imposed on itself the necessity of making both ends meet and operating on the basis of no profit or loss, should see that that system is carried on. The Board will have no interest in doing anything else, and it will have no incentive to charge more. In fact, its incentive will be the opposite in order to get a bigger number of consumers. Allowance must be made for the private concern which may be permitted to carry on by the Board.
Amendment, by leave, withdrawn.
Sections 59 and 60 put and agreed to.
SECTION 61.
(1) Whenever—
(a) it appears to the Board that it is expedient that any generating station should wholly or in part cease to be used as a generating station, and
(b) a sufficient supply of electricity is available to the person owning such generating station and such person can be compelled under this Act to take such supply,
the Board may by order require such person within such time as the Board shall specify in such order (not being less than three months from the date thereof) to cease to use such generating station as a generating station either wholly or to such lesser extent as is specified in such order and shall under the powers conferred on it by this Act compel such person to take the supply of electricity so available as aforesaid.
I move:—
Section 61, sub-section (1). After the word "sufficient" in line 64 to insert the words "and assured."
It appears to me that the word "sufficient" in the sub-section is really insufficient, if I might put it so. My reading of it is that the Board can force an undertaker to take a supply of current if they can prove it to be cheaper than his own. But surely there is the factor of an assured supply. There is the liability to a breakdown. It is an undoubted fact that these overhead transmission lines are liable to break down. In the event of a breakdown is it not unreasonable to expect an undertaker to shut down his local station, or, alternatively, is it not reasonable that the Board shall give some assurance of continuous supply? In some cases it is conceivable that damages might lie against the station for failure to supply. It might be possible that supply is so important that an assurance of supply is given by the local station, and if it is shut down that assurance cannot be carried out. It seems to me unreasonable to ask a local station to shut down unless a supply can be assured, for the consequent loss to the consumers may be serious.
In every other country long distance transmission has been availed of by industrialists, and we have no querulous complaints as to whether the supply is assured or not. We cannot assume that. Irish concerns are no more timorous, or as timorous as Senator Sir John Keane would make them out, in the matter of supply. There are concerns that have that peculiar fear. The "Independent" Newspaper Company at the moment is so lacking in faith in the Dublin station that it has its own private plant, and uses only the Dublin station as a stand-by. If every other concern showed as little appreciation of the Dublin station as the "Independent" there would be no supply from the Dublin station, for there would be no consumption. What is this assurance as far as private consumers are concerned? If the Board cannot give sufficient assurance in making contracts to the private consumers then the play of economic forces is going to drive them out. If people put the case that they regard the thing as so delicate that there is a fear of breakdown present to their minds then they might use the other station as a stand-by, for which an allowance would have to be made. In no country is there this fear of long distance break down that Senator Sir John Keane thinks. If other countries can make it a success I cannot see why this long distance supply scheme should be a failure here. There is no reason why the Shannon scheme should be a failure. We have the same type of technical capacity for keeping that plant running successfully as elsewhere, and there is no use in throwing cold water on this scheme by people with unnecessary fears.
I am dependent on what is told to me on these matters. I have been told that in Switzerland a break down is of frequent occurrence. The Minister should not be too hard on a person who adopts a healthy suspicion towards legislation. It breeds a critical spirit which is necessary, so that particular things cannot get through owing to want of vigilance. One has to examine these matters, not with suspicion, but vigilance, and because one points out certain things one should not be accused of being almost unnational. Possibly the Minister's suggestion might meet the case. Would it be possible to bring into the Bill some provision so that where a stand-by was proved to be necessary some allowance should be made by the Board to maintain it, or is that already provided in the Bill?
That would be a matter for agreement afterwards. That is not provided in the Bill, and should not, I hold, be in the Bill.
I am sorry to hear the Minister say that it should not be in the Bill.
Surely it is a matter for an undertaking putting a clause into a contract with its customers.
Amendment, by leave, withdrawn.
Would I be in order in asking the Minister for an explanation?
CATHAOIRLEACH
I notice an amount of anxiety in the country on the part of people who have private installations. Perhaps the Minister would tell us whether Section 61 could by any possibility be construed to govern these cases.
This is a point on which I have been questioned so often, that I asked for an opinion on it, and I have got that opinion. This is it:—
"I agree with the view expressed in your minute of the 30th April, that the owner of a private generating station which is engaged in the generation of electricity solely for the use of such owner cannot be required by the Electricity Supply Board by an order under Section 61 to cease to use such generating station as a generating station. It is clear from paragraph (b) of sub-section (1) of the said Section 61 that an order can only be made under that section in respect of a generating station owned by a person who can be compelled to take a supply of electricity from a particular source; such compulsion can only be exercised under Section 56 of the Bill and under that section clearly could not be exercised against the owner of a private generating station generating electricity, solely for the use of such owner."
Thank you. That is quite sufficient.
I move:—
Section 61, sub-section (1). After the word "supply" in line 66 to insert the words "provided always that the rate charged for the new supply shall not be increased within a period of ten years."
This, I suggest, is a more important and vital amendment than the previous one. What is there to prevent the Board going into an undertaker and showing a figure cheaper than that of the undertaker? There would be nothing more difficult than to get the true cost. The Board can show a figure that has not to pay income tax or rates, as the undertaker has, and there would be unfair competition from the start. What is there to prevent the Board when it has acquired an undertaking from raising the rates again? I think this is a matter that should be provided for. When the undertaker has closed down his plant and dispersed his staff it would obviously be most unjust to have the old rates restored, and that is a thing which should be specifically provided for in the Bill.
Again I cannot understand the Senator. He shows very clearly the points which go to help the Board in giving a generating cost at a less rate than one can generate at the moment. He says the section dealing with the remission of income tax and rates is all to the advantage of the Board and goes to prove that they would be able to come in and supply at a cost under that of the other generating station. We are asked to see that the cost to the consumers will not be increased in the new area of supply. The Senator throws a doubt on how it is to be determined. It will be difficult to determine whether the generating cost is lower than that of the local station. That has to be determined by an arbitrator if there is a dispute. After doing it the Board is going to raise, the charges. If the arbitrator has decided on the figures shown to him that the Board is generating less than the local station, where is the incentive to raise it to as much as, say, a private company, where they may want bigger dividends, or a local authority which, under the present régime, would seem to be tending towards making more money for the ratepayers? Any incentive of that sort is absent from the Board. The Board is out to get the consumers and having got them to treat them fairly. Is it not clear that the Board, having closed down a small local plant and having got them to take the current, in proceeding to raise the rates would destroy its credit throughout the country in any other operation of this sort? Would the Senator believe that there is any undertaking at the moment which would give the guarantee demanded here, that the rates shall not be increased within a period of ten years? If the Dublin station had given that guarantee two years ago surely the coal strike would have meant an increase? One cannot advise against all contingencies. No undertaking could give a guarantee of that sort. I do not see why the Board should be asked to do so.
Why not take the current in bulk? As I read the experts' report they contemplated that the undertaker should get the current in bulk. I suggest that the Board might be mistaken in the price under which it steps in. Contingencies might occur afterwards and there may be unexpected increases of prices or depreciation may make it necessary for the Board to increase the price. People make contracts. Sometimes you can get contracts for ten years to supply current at a certain rate. There is nothing to prevent the Board making a ten years' contract with an undertaker by coming to a certain arrangement.
Can the Senator view it from the point of view of the consumer and that is all I am concerned about? Is it more likely that the rate will go up under the Board or under a municipal authority or a company with the drive to make profits?
That is an acceptance of the amendment?
Would any undertaker at the moment give a guarantee?
Would not the undertaker be protected provided the rate charged for the new supply would not be increased for ten years? Certain contingencies may arise. In view of the contingencies would Senator Keane be prepared to give a little to the other side and say that the rate charged for the new supply shall not be increased or decreased for ten years?
We all lose sight of the fact that the purchasing power of money decreases in a couple of years. I think in putting down the amendment there should have been a fixed rate for Dublin. As time goes on for some mysterious reason money seems to have only a nominal value. I think it is impossible to fix a rate for even five years.
Amendment put, and declared lost.
Question: "That Section 61 stand part of the Bill"—put and agreed to.
SECTION 62.
Notwithstanding anything contained in any special Act or any provisional or other order in force at the passing of this Act, it shall not be lawful for any authorised undertaker without the consent of the Minister before the constitution of the Board and after the constitution of the Board without the consent of the Board to establish a new or extend an existing generating station or transmission system or distribution system.
I move:—
Section 62. To delete the words "or distribution system" in line 58.
It is felt that there should be no hindrance in the way of extending the existing distribution system. In certain areas such as Dublin and, possibly, Cork, the work of extending the distribution system and the wiring of houses has been going on. The result of this section, I understand, is that men have been taken off that work which was necessary for the use of electricity during the coming winter, and that a number of people are now unemployed. That is work that will have to be done in any case.
As far as the extension and distribution system is concerned it should not be necessary to wait for the consent of the Minister or the Board, if that means delay. This is work that has to go on constantly if the use of electri- city is to become wider. I think it is quite unnecessary to put on any restriction of this kind as far as the distribution and extension of the system is concerned.
I oppose the amendment for this reason: that under the distribution system all fitments for electricity are expensive. The greatest scandal in connection with the demand for electricity is the expense of fitments. If these fitments were used for any other purpose except for electricity they would be sold at one-sixtieth of the present price. I understand there is given under the Shannon scheme power to supply the apparatus at practically cost price. If we allow the distribution system to be done at the choice of any undertaker it would interfere with the chances that people have of getting electrical fittings at something like cost price. The question of employment does not arise at all, and is not as serious as the Senator thinks. Employment will have to be given no matter what the quality of the fitments are.
I think the Senator is mistaken about Senator O'Farrell's intention. I take it that what the mover of the amendment was thinking of was of a person who wants electricity and has not got it in his premises at present. It is in his own hands whether he will take it or not. What the Senator, I think, is afraid of is that there would be an interval before the Board comes along and is able to give a supply of electricity. As the section stands no extension is possible in the meantime. One could understand why an existing station should not be extended, but why prevent a person who wants current getting it at present? If people do not like to pay for the fitments they need not do so. No one can compel them to do so. The amendment asks for leave for an undertaker to supply customers in the interval.
This is continuing simply what is the present system. If an undertaker or local authority has to extend the transmission or distribution system leave has to be got for the loan required. That is simply carrying on, and stabilises the present position until the establishment of the Board. Then the power now in the Minister passes to the Board. It is simply carrying on what is in existence. The Senator talks of men being thrown out of work because consent was not given. Whether that is the case or not, at any rate the extension of the distribution system depended largely, apparently, on the sanction of the Minister. That will continue up to the constitution of the Board and the making over of the power to the Board. If, hereafter, an undertaker wants permission to extend the transmission or distribution system he is prevented from doing it without the consent of the Board. Is the Board likely to refuse consent except in cases where it seems consent should be withheld? The Senator referred to men who have been deprived of work. They were. But not by my fault. It is said that sanction was not given. What happened was that people began to spend money without having sanction. We had not clearly particulars before us with regard to the spending of more money, and did not know if the extension of the system would fit in hereafter with the Shannon supply. Within the last couple of months we have been able to persuade the Rathmines system that in the extension of the service they should have overhead wires instead of the extravagantly dear underground system. That will be a saving in the future, and is simply carrying out what is required at the present—the Board taking the place of the Minister when it is constituted.
Has any arrangement been made for the extension of the distribution system at present? The complaint is that work has been held up and that the undertakers had to apply under certain other Acts before they could extend. I do not know why it should be made compulsory to apply to the Minister under these other Acts, seeing that they will have to apply to the Board once it is established. If the Minister can say there will be no delay in issuing authority for the extension of the distribution system there would be no necessity for the amendment. I am told the position is the reverse. Men have come on deputations and said that they were out of employment as a result of this embargo.
By no means. There has been no delay. Occasionally people have been asked and have refused to bring particulars of what type of distribution system was intended. I have a different view about the people thrown out of work. The thing happened to coincide—and it is a peculiarity it did coincide—with the start of the campaign against this particular Bill. I have no doubt whatever it was definitely manoeuvred, even at the cost of the working men, in order to draw attention to what was called the absurd power, although it was quite clear that the absurd power was not one given under this Bill and was already in my hands. I am quite ready to submit to examination to see who was in fault. I can say quite clearly that sanction was not refused in any case in which extension was applied for, and that definitely there was no delay where particulars enabling a judgement to be based on them were given.
In view of the statement of the Minister, I ask the leave of the House to withdraw the amendment.
Amendment not moved.
The next amendment reads:—
Section 62. To add at the end of the section the words "Provided that the consent to extend generating stations shall not be withheld unless there shall be a bulk supply available at a price not greater than the cost of generation by the existing or extended station."
The same principle is involved here, and I ask the leave of the House to withdraw the amendment.
Amendment, by leave withdrawn.
Question—"That Section 62 stand part of the Bill"—put and agreed to.
SECTION 63.
(1) The Board may after consultation with an authorised undertaker make contracts for the execution of works for or on behalf of such authorised undertaker, and the Board may after consultation with an authorised undertaker prepare plans, maps, and specifications in relation to any works to be executed by such authorised undertaker and supervise the execution of such works.
(2) The Board may after consultation with an authorised undertaker make contracts for the sale of electricity by such authorised undertaker and may after consultation with an authorised undertaker, and if so requested by such authorised undertaker, shall supervise the making of contracts for the sale of electricity by and on behalf of such authorised undertaker and the execution of contracts so made.
I move the following amendments—
Section 63, sub-section (1). To delete in line 59 the words "after consultation" and to substitute therefor the words "by agreement."
Section 63, sub-section (1). To delete in line 62 the words "after consultation" and to substitute therefor the words "by agreement."
These are really verbal amendments. I submit the words "by agreement" would be much better than "after consultation." Consultation does not necessarily mean by agreement.
I think the amendments should not be inserted. What is intended in sub-section (1) is to prevent undertakers entering upon contracts for the execution of particular work if in the opinion of the Board—having specialists with regard to certain items in its personnel—a less expensive system would do. At the moment we have the situation in which the whole thing is done by a consulting engineer. It is quite clear that systems have been erected without any regard to the capacity of particular areas to meet the charges, even in the case I spoke of—the overhead system in Rathmines—as opposed to the costly underground system. I think it is right the Board should have power to impose on the undertaker the necessity of consultation.
Amendments, by leave, withdrawn.
I move:—
Section 63, sub-section (2). To delete in line 66 the words "after consultation" and to substitute therefor the words "by agreement."
Section 63, sub-section (2). To delete in line 1 the words "after consultation" and to substitute therefor the words "by agreement."
Amendments agreed to.
Question—"That Section 63 as amended stand part of the Bill"—put and agreed to.
Sections 64 and 65 agreed to.
SECTION 66.
An authorised undertaker may, with the consent of the Board, erect, maintain, alter, improve, and renew by-product plant with all necessary machinery and apparatus, and do all such acts as may be proper for working up and converting the residual products arising directly or indirectly from the generation of electricity.
I move:—
To delete the section.
I cannot understand what the section means.
I had the advantage of a private conversation with Senator Dowdall on this matter but I do not expect to satisfy him any more publicly than I did privately. It has been definitely put to me that there is no power in Section 66 for an authorised electrical undertaker to become a gas undertaker and that is what the Senator is anxious to prevent. If the Senator still has his fear instead of deleting the section, which is a valuable one, I am prepared to add on some limitation such as that which follows in the Senator's alternative amendment, No. 56, the only thing being that it is very difficult for me to accept an amendment which, in fact, says that an electrical undertaking becoming a gas undertaking shall not enter the trade of a gas undertaker, when I hold and believe that the electrical undertaking can never become one for the sale of gas.
What are the by-products the Minister has in mind? Surely there can be no by-products from electricity?
It is not so much from electricity. An authorised undertaker may have a steam station. The by-products come from a by-products plant, not from the ordinary plant. There can be no by-products from the Shannon, but we could imagine other things. If the Senator likes to leave it over we can look into it on Report. That will give me another chance of giving the Seanad my point of view as regards this section.
One can quite understand the production of something else than electricity that is by no means a by-product.
Amendment, by leave, withdrawn.
Question—"That Sections 66 to 78 inclusive stand part of the Bill"—put and agreed to.
SECTION 79—PUBLIC SAFETY REGULATION.
I wish to make a statement on Section 79 with your permission. I have been asked questions with regard to the upkeep of transmission lines. In the event of accidents happening to human beings or stock where does the liability or responsibility lie? A good many people have asked that question. A lady friend of mine has a farm which runs in the direction in which the poles are erected. There are ten poles in about 60 acres. In the event of these poles going through a tillage field is there any arrangement whereby they could be put on the fences and will they be so high as not to interfere with the passing of loads of hay? Questions such as these are being asked.
These matters are not referred to in this Bill. What the Senator spoke of will be found in the 1925 Act. I could comprehensively answer the Senator by saying that pretty nearly every point he has spoken of would be a matter on which, if damage were avoidable, compensation would have to be paid. As to the question of the upkeep of the poles, they remain more or less my property and the control of them is passed on to the Board. The Board is liable for their maintenance and safeguarding. As to the payment of rental on any of these poles I have already said that there may be some very nominal sum paid. It is a sum that will have to be taken into relation with the actual amount of land occupied.
I suppose it will be analogous to the position of the Minister for Posts and Telegraphs with regard to telegraph poles?
Question—"That Section 79 stand part of the Bill"—put and agreed to.
SECTION 80.
Whenever a local authority which is an authorised undertaker has in its hands at the end of any local financial year any surplus funds arising from the authorised undertaking after discharge of all liabilities in relation to such undertaking, such authorised undertaker shall not allocate or apply such surplus funds to any purpose save a purpose approved in that behalf by the Board.
With regard to the wording of this section, of course there are annual liabilities, and there is also the discharge of portion of the principal and the interest. Does that mean that after discharging all the liabilities accuring annually in relation to the scheme, if there were a surplus that it should be disposed of by the Board? Does it mean all the liabilities?
It means everything. It says "all liabilities."
In any legal financial year—that same may apply to the liabilities attached to that financial year with regard to the scheme? I want to make it clear whether it is to be interpreted that way or not, that there must not be one penny owing at all.
So far as I understand the point made, the State discharges all liabilities. It means every liability. If there are capital charges they will be divided up into annual repayments, redemption, and so on. It is, after paying all those things, that a company would proceed to show a profit and declare a dividend.
Question—"That Sections 80, 81 and 82 stand part of the Bill"—put and agreed to.
SECTION 83.
(1) The Minister may compulsorily acquire any land permanently for the purpose of erecting thereon or of using the same as barracks for the accommodation of members of the Defence Forces of Saorstát Eireann or of the Gárda Síochána engaged in the defence or protection of the Shannon works.
Amendment 58 reads:—
Section 83, sub-section (1). To add at the end of the sub-section the words "or for the erection of factories or other works by persons under agreement with the Electricity Supply Board."
This amendment is consequential on the one I was given permission to hold over to the Report Stage, and I will hold this over also.
Amendment not moved.
Question—"That Sections 83 to 89 inclusive, stand part of the Bill"— put and agreed to.
SECTION 90—STAND-BY SUPPLIES.
Notwithstanding anything in this Act or in any other Act or any order made under any such Act, a person shall not be entitled to demand or continue to receive for the purposes of a stand-by supply only from the Board or an authorised undertaker a supply of electricity for any premises having a separate supply of electricity or a supply (in use or ready for use for the purposes for which the stand-by supply of electricity is required) of gas, steam or other form of energy unless he has agreed with the Board or such authorised undertaker (as the case may be) to pay such minimum annual sum to be determined by the Board as will give to the Board or the authorised undertaker (as the case may be) a reasonable return on the capital expenditure incurred in providing such stand-by supply and cover other standing charges incurred in order to meet the possible maximum demand for those premises.
I move amendment 59:—
Section 90. To delete in line 52 the words "to be determined by the Board."
I think this is an agreed amendment.
To a certain extent I have agreed to the principle of this. I shall suggest another form of words which can be considered on the Report Stage.
Amendment, by leave, withdrawn.
CATHAOIRLEACH
That applies also to the Senator's next amendment.
Amendment 60 not moved.
Section 90 agreed to.
Sections 91 to 101, inclusive, agreed to.
SECTION 102 (1).
In this section the expression "authorised gas undertaker" means a person who is for the time being authorised by any local or personal Act of the United Kingdom Parliament or any private Act of the Oireachtas or any provisional or other Order made under statutory authority (whether before or after the establishment of Saorstát Eireann) to supply gas to the public in any specified area and by virtue of such Act or Order has for the time being the exclusive right of so supplying gas in such area, and the expression "area of gas supply" means an area within which an authorised gas undertaker is for the time being so authorised to supply gas to the public and has for the time being the exclusive right of so supplying gas.
I move amendment 61:—
In sub-section (1) to delete in line 18 the word "exclusive."
Amendment agreed to.
I move amendment 62:—
Section 102, sub-section 1. To delete in line 22 the word "exclusive."
Amendment agreed to.
I move amendment 63:—
Section 102. To add at the end of the section a new sub-section as follows:—
(4) The power conferred on the Board by this Act to acquire or take control of an undertaking shall not extend to the acquisition or taking control of the gas undertaking or any lands, buildings, plant, machinery or works essential thereto of any authorised gas undertaker who by virtue of this section becomes an authorised undertaker under this Act.
This amendment really means that in case the Board acquires any undertaker who may be generating by gas that that undertaker may sell gas for light or heat which is absolutely essential for his purpose.
The position with regard to this amendment is somewhat this. Here you have an authorised gas undertaker coming under the Bill. He may have funds at his disposal and he may wish a change over in order to take on the business of electricity, as by one section in the Bill he would be able to do, either completely or in part. If he becomes an authorised electricity undertaker completely, he falls within the scope of the Bill and is subject to the liabilities imposed upon any other electricity undertaker. If he becomes only in part an electricity undertaker there is provision made, after acquisition, in Section 41, for segregation, and it ought to be clearly understood that when segregated anything that is definitely and clearly part of the electricity undertaking is subject to the Board. It may be acquired and controlled, but the Board would have no power to interfere with such portion as is essentially only a gas undertaking. The point is made in the Bill, and if the Senator will consider Section 41 he will see that the whole thing is met.
Amendment, by leave, withdrawn.
Sections 102 and 103 agreed to.
Section 104 ("Transfer to the Board of certain functions of the Commissioners of Public Works").
I move amendment 64 to delete the section. I hope to persuade the Minister to consent to the deletion of this section, which is meant to transfer to the Board certain functions of the Board of Public Works embracing the drainage and navigation interests of the Shannon catchment basin. It seems to me scarcely possible that the Board which has been so much discussed and is meant for the supply of electricity would be a suitable Board to take charge of such complex problems as the drainage of the Shannon. The experts in their report drew special attention to the question of drainage works for the Shannon and pressed upon the Government that these should take almost precedence over any other works. At any rate that they should go on at the same time as the power. Funds for this drainage are not included in the estimates for the Shannon power scheme and these works would require special legislation and funds. I submit they should not be left in the hands of the Electricity Supply Board, but should remain in the care of the department which has been responsible for the Shannon for so many years. In my opinion the Shannon power works will increase the difficulty and cost of dealing with the drainage problem, and I maintain that a Board responsible for these power works should not be placed in the position of judge and jury as to the drainage works necessary to remedy the injurious effects of the power development. The Board shut off from Parliamentary criticism might feel justified in following the views of the experts expressed as follows in their report: "It should however here be noted"—these are their very words —"that from the view point of the cost of production of power flooding on a greater scale with a lessening of embankments to be built would be more advantageous." I do not say that the Board will follow that, but it is an expression in a report which is a very valuable one. I therefore move the deletion of the section.
This clause is so objectionable that I do not know how it got into this Bill. What it does for practical purposes is this: it makes the only body who is likely to interfere with the navigation of the Shannon, or the drainage of the country surrounding the Shannon, the guardian of these important matters. I cannot imagine a more objectionable section.
I presume the Minister will explain the necessity for the section, because as you are aware these duties have been carried out for a century or more by the Board of Works. Perhaps the Minister would explain why it is necessary to transfer these to the new Board. Surely the new Board will have sufficient work to do without looking after the drainage and the navigation work which is involved in this section. I cannot think that it is the intention that the Board of Works should be superseded.
I was very anxious not to have the duties of the Board complicated by these extra duties under Sections 104 and 105. But it was by the special request of the Board of Works that this was first considered. The Minister for Finance, who is responsible for the Office of Works to a certain extent, insisted that those powers should be transferred. Senator Sir John Griffith has referred to the point of finance. If the section remains it will be necessary to have an addition to it transferring to the Board not merely the duties of the Board of Works at the moment, but also to transfer the property and revenues which the Board of Works derived out of it in order to meet whatever expense is necessary with regard to navigation, the preventing of flooding and one thing or another. There are two points in question. Senator Brown speaks of how surprised he was at finding this section in the Bill. His surprise is legitimate. I was surprised too, when it was first intimated to me that it was necessary, but it was made clear to me in this way—that we may have to make up our minds for a particularly small period as between navigation and the production of electricity. We may have to lower navigation levels for a short period in order to give the assurance of supply of which Sir John Keane was so apprehensive a moment ago. It was found quite impossible to have two Boards—one dealing with navigation and drainage, and the other with the production of electric power and light, each depending completely upon the same flow of water on this river. One has to consider whether dual control over the flow of a certain amount of water down to the turbines is going to work well for the purpose of navigation and for the supply of electricity. There may be a period when it would work well for electricity but it may be bad for the navigation. When it is a question between the two the point of view of the Government is that the electricity should take precedence. The question is who is to be in control? The point that Senator Sir J. Griffith makes is a sound one. If the Board takes over this power the Board would also need to have transferred to it the property connected with the navigation of the river. This Board is to take the place of the Board of Works in the matter of navigation in reference to the Shannon scheme. That may seem an astounding proposition, but you have to remember that the Board of Works would be rendered powerless in the matter of keeping on the navigation levels at a certain point.
It may be necessary for us to have particular interference with the level at Lough Derg. One has to consider a very dry year occuring once in thirty years. One would have to consider that there may have to be interference then, and in that case the supply of electricity would take precedence over the navigation level. The same remarks would apply to the matter of flooding.
Two departments of the State would be involved.
The arrangements made in this Bill would remove the Board from Parliamentary supervision. Here is the case that instead of having the Minister to come up and answer questions in the House we would have a Board to whom nobody could put a question at all, and it might take over functions and do things that would cause immense damage and there would be nobody to answer for any regulations they might make. Surely, the Oireachtas is not going to give entire control of a huge section of the country to this Board and put them in the position that they could be asked no questions about it. There would be no Minister responsible. I must say that this is the most revolutionary proposal that we have come across in the whole Bill as far as I have been able to read the Bill. Why we should take the Board of Works and put it above business in a section where it is essentially required that there should be Parliamentary control for the protection of the rights of the people, I cannot understand.
There are two ways of dealing with this question— the procedure that is outlined here in Section 104. We might go warily through whatever Acts have reference to navigation and drainage on the Shannon and repeal them and re-enact a certain number of those because that would be necessary with regard to navigation and flooding on the lower Shannon. In that matter the Board of Works have been already wiped out. They will be powerless to carry out certain duties once the canal is completed and the water begins to flow. Certain navigation will have to be abandoned then, and the Board of Works cannot possibly carry out duties imposed upon them. We may have to meet that situation in another way by deleting Section 104, and bringing in a whole series of new clauses to the navigation side of the Act, from which flow to the Board of Works their present duties and responsibilities in the matter of navigation and flooding. The mere passing of the first Shannon Bill implied that there were certain duties imposed on the Board of Works as navigation authorities in the lower Shannon which cannot be carried out. Supposing we decide to drop out Section 104 and come around by the other way of amending these earlier Acts, a further question falls for consideration.
If there is going to be any conflict as between the Board of Works and the new Board of Electricity, is it desirable that that conflict should be allowed to continue? Should there not be a decision that in the event of an emergency as to the one which should get the precedence? I think there can be no doubt as to which ought to get the precedence. Personally I would like, from the majority point of view, to see the Electricity Board not encumbered with these duties, but one must remember that there will be serious reaction on the Electricity Board in carrying out its duties if it is not allowed to have those powers.
This is a very difficult question to vote on. The Minister has stated the difficulties of the case quite clearly, but he has not at all removed the objection one feels to taking out of the control of the Oireachtas such a large part of the duties of the Board of Works, with the Minister at the head having to answer for whatever happens. It looks undoubtedly as if further thought was required before we pass this section.
The Senator's point could be met. According to the section the Executive Council may by order divest the Minister or the Commissioners of Public Works of essential functions relating to certain things, and upon an order made power is to go. However, we could insist that that order should come before both Houses. That would give a certain power of Parliamentary control and of criticism —when the powers were to be divested and handed over to the Board. That would meet the difficulty Senator Jameson has pointed out. On the other hand, if the Board of Works are to be left in control of navigation, then a decision taken on that means that you have to have two authorities controlling navigation, as far as the Shannon is concerned, for the new navigation course will be down the canal. Nobody is to have control of that except the Electricity Board. That means that in the future the powers of the Board of Works with regard to navigation terminate at the end of the head-race. As meeting one of the objections put forward we could have an amendment to this section insisting that any or all orders under the section should come before both Houses, and on an adverse vote be rejected.
I think that is the wisest thing to do. I suggest to Senator Sir John Griffith to withdraw his amendment so that the matter may be considered between this and Report.
CATHAOIRLEACH
Or let the further consideration of this amendment stand over until to-morrow.
The Seanad went out of Committee.
Progress reported.
The Seanad adjourned at 6.55 p.m., until 11.30 a.m. on Friday, May 13th, 1927.
