Energy plan should lower cost - O'Rourke

The liberalisation of the electricity sector next year should lead to reduced costs for consumers, the Minister for Public Enterprise predicted. Ms O'Rourke said 28 per cent of the industry would be open to competition from FEBRUARY 2000, leading to "increased efficiency and downward pressure on prices".

Introducing the Electricity Regulation Bill, she said: "Electricity forms such a vital component of our overall energy needs - how we manage the sector and cope with dramatic growth will have a major bearing on our future prosperity and development."

She said the Bill's main purpose was to establish a regulatory body, the commission for electricity regulation.

There would be one commissioner initially, but the Bill would enable the commission to expand to three members.

The industry would fund the commission which would exercise its functions under a range of primary and secondary duties, focusing on the protection of the interests of final customers and ensuring non-discrimination between electricity undertakings, the Minister added.

Ms O'Rourke said the commission would also be given the power, currently resting with the ESB, to licence the generation and supply of electricity and to authorise the construction of electricity generating stations.

The Fine Gael spokesman on public enterprise, Mr Ivan Yates, said the Government's approach had been so slow and cautious that huge uncertainty prevailed on how many applications would be pursued to set up new generating plants.

"Hardly any can be in place by FEBRUARY 2000. This Bill only scratches the surface of these issues. There is no clarity on the trading terms for new entrants to the market. We do not know the `wheeling charges' which the ESB will charge for use of their transmission and distribution systems. So, therefore, it is impossible to quote prices to potential electricity customers."

Mr Yates was very concerned about the prospect of power cuts due to the lack of urgency in commissioning new generating plant. He understood that over recent months there had been some 14 "orange/amber alerts" due to surges in electricity demand. He understood there had been a reliance on the Northern Ireland inter-connector.

"Fine Gael believes that, if necessary, all ESB plans to commission new plant should be expedited and brought on stream. If the competition objectives are not being met, one could subsequently sell by tender some ESB plant. This would meet EU competition requirements and ensure there was no threat of power cuts."

The Labour spokesman on public enterprise, Mr Emmet Stagg, accused the Minister of having a hidden agenda. "I believe she is preparing through this Bill, and the Bill which is to follow, for the privatisation of the ESB."

The Minister should explain what would be done with the excess capacity of new entrants to the market, he added.

"She cannot say the regulator will deal with that issue - it is a matter for political decision. Does the Minister accept there will be . . . irresistible pressure to open the market further and earlier to allow other commercial users access to this new cheap energy?

"Does she not see this must lead to large scale closures of existing ESB plants: that the oil-burning stations at Tarbert, in Kerry, and Great Island, in Wexford, will be forced to close and that the turf-burning stations at Ferbane, Rhode, Lanesboro, Shannon bridge and Cahirciveen, despite a temporary reprieve, will be forced to close?"