ESB unit in High Court over regulator's direction

An ESB subsidiary has taken a High Court challenge to a direction issued by electricity regulator Mr Tom Reeves. The action is the first by the State power company since the market was partially opened to competition last February.

It follows an investigation carried out by Mr Reeves into ESB Independent Energy, an ESB subsidiary that operates in the liberalised section of the market.

That investigation is understood to have been prompted by complaints from competitors. It concluded there was insufficient ring-fencing of information, information systems and resources between ESB and its subsidiary. ESB Independent Energy purchases wholesale power generated by its parent company. It sells that power on to industrial customers in the segment of the market open to competition.

Privately-owned power supply groups also purchase wholesale electricity from the ESB. Some are thought to have alleged to Mr Reeves that ESB Independent Energy was using information from the parent company to wrong-foot its competitors.

Such groups include ePower, a company controlled by Esat's founder, Mr Denis O'Brien. Its chairman, Mr Leslie Buckley, yesterday confirmed it had complained to Mr Reeves that the ESB had abused its dominant position. He claimed ESB Independent Energy "scare-mongered" ePower's potential customers, casting doubt over its ability to supply electricity. He also claimed the ESB was slow in making crucial "load factor" information available to ePower.

In addition to other allegations, he said ESB Independent Energy sales staff did not specify to potential customers that they no longer worked directly for the parent company.

The Act setting up Mr Reeves's office empowers him to appoint an authorised officer to pursue investigations, with power to enter buildings and seize documentation.

It is thought Mr Reeves directed the ESB on December 20th to refrain from certain practices. This was the first such direction issued to the former monopoly.

But ESB Independent Energy sought judicial review of that direction and, on December 22nd, secured a High Court stay on it, pending a full hearing on January 15th.

In a statement yesterday, it claimed the direction would breach the principles of natural and Constitutional justice and basic fairness. The direction was excessive, unreasonable and would cause very serious damage to its business, the company claimed.