ESB earning ‘super-normal profits’ amid ‘price gouging’, FF TD says

Provider earned €250m extra for electricity supplied over three months

Households and employers paid an extra €250 million for electricity over three months this year as State company ESB earned ‘super-normal profits, according to TD Barry Cowen

Households and employers paid an extra €250 million for electricity over three months this year as State company ESB earned ‘super-normal profits, according to TD Barry Cowen

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Households and employers paid an extra €250 million for electricity over three months this year as State company ESB earned “super-normal profits”, according to TD Barry Cowen.

The Fianna Fáil deputy told Dáil Éireann that he had obtained figures from the Integrated Single Electricity Market (ISEM) detailing movements in the benchmark wholesale power price for consumers and businesses.

“The report clearly shows that there has been a €250 million increase in the price of electricity for consumers in three months until the end of September because the ESB has orchestrated and extracted super-normal profits,” Mr Cowen said.

Recent figures show that individual ESB gas-fired power plants earned gross profits of more than €138,000 an-hour during periods of high demand for electricity in September.

The data showed that Aghada power plant in Cork earned a gross profit €138,667 between 4pm and 5pm on September 9th for electricity generated and sold.

On the same day, the analysis, provided by industry sources, shows that Dublin Bay earned a gross surplus of €132,151 between 3pm and 4pm.

The profits are gross figures, based on the difference between what it cost the plants to generate the power and the prices they received. They do not include other business costs.

Average price

ESB rejected these numbers saying the average price it sought for electricity between July and September this year was €122 a mega watt hour (MWh), 30 per cent less than the market price of €161 MWh.

Mr Cowen accused the State company of using the Republic’s shortage of generating capacity and its dominant position in the market to “increase tenfold the wholesale price of power”.

He argued that this resulted in the prices paid by Irish consumers rising at a faster rate than the increases that applied in the rest of Europe.

Mr Cowen noted that world energy prices are rising as gas prices increase. “Ireland also has a generation supply crisis caused by the failure to plan for adequate new generation capacity,” he added.

“By virtue of its dominant role as a generator, the ESB has been selling into the wholesale market where all power utilities purchase their energy at 10 times the normal levels applicable in 2019 and 2020.”

He noted that those companies included the ESB’s own subsidiary, Electric Ireland, as well as Bord Gáis Energy, Energia, Flogas, Panda Power, Prepay Power and SSE Airtricity.

The TD called for the Commission for the Regulation of Utilities to investigate how the global rise in energy prices has hit Irish consumers so severely.

Mr Cowen estimated that on their own, the increases in the three months to end of September would add an extra €150 to families’ electricity bills.

The ESB said it had no “sight or knowledge” of the report to which the TD referred.

“ESB rejects any assertion of improper behaviour in the market,” a statement said.

“It is a matter of record that wholesale gas prices have increased by in excess of 400 per cent and carbon prices by in excess of 100 per cent over the last 12 months.”

The State company added that this, coupled with lower than usual wind-generated electricity, had led to significant increases in wholesale power prices.

Mr Cowen demanded that the Minister for Environment Communications and Climate Action, Eamon Ryan, to order ESB to stop price gouging and to instruct the regulator commission new generation from alternative suppliers to boost competition.

Responding for Mr Ryan, Damien English, Minister of State for Enterprise, pointed out that the most immediate factor affecting electricity charges was the continuing rise in world gas prices.

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