O'Rourke unveils procedure to deregulate power sector

The Government will today unveil a fast-track procedure to deregulate the Republic's electricity market, calling for a short period of intensive consultations with the industry after it releases an outline proposal in the spring. The Minister for Public Enterprise, Ms O'Rourke, will announce the move when she addresses a discussion forum in Dublin on the European Union's electricity directive. Under EU rules, there must be some competition in the Irish electric power market by February 2000.

Ms O'Rourke will tell the gathering that crucial decisions must be made by the Government over the next three or four months.

The Department of Public Enterprise is to prepare final proposals which will form the basis of the new industry structure. In an unusual procedure, these will be made publicly available once they have been agreed by the Cabinet.

Such a move should allow all interested parties lobby the Government before a final decision is made.

Analysts say there are several issues at stake which will determine the supply and price of electricity for decades to come. Because of the EU-imposed deadline, any mistake could prove costly.

As well as teasing out these issues, many of those at today's forum will be jostling for position in advance of the new rules.

Under the directive, 28 per cent of the market - in effect those 300 corporate customers that use the most electricity - must be able to choose their power provider by February 2000. In 2003, one-third of the market must be given access to competition.

It now seems unlikely that the Government will allow organisations spread out over several sites - such as a group of schools or hospitals - to pool their bills in order to qualify as one of the top 300 customers.

The directive also insists that the ESB's generating business and its supply business should not be allowed to subsidise each other, but stops short of ordering the company to be formally split up.

ESB executives attending the gathering will raise a number of issues that worry the company, especially the fear that the ESB will be restricted in how it can compete with new entrants.

The company will argue that it should not be forced to carry the full cost of supplying remote areas, running expensive peat-burning generators and guaranteeing that there is, and will be in the future, enough power to meet demand at all times.