Power market move draws watchdog fire

The Competition Authority has criticised the Government approach to liberalising the electricity market and called for control of the transmission network to be taken away from the ESB. The State firm responsible for operating the national grid, EirGrid, should control the transmission network rather than the ESB, the authority said yesterday.

"Access for competing generators to the national grid on clear and non-discriminatory terms is crucial. This is best realised when ownership of the grid is entirely removed from the incumbent," says the authority.

Last year the Government directed that the ESB would retain ownership of the assets of the transmission system while leaving EirGrid responsible for the operation and development of the grid. But details of the arrangement were left to further negotiation and, if necessary, direction by the Commission for Electricity Regulation.

If the ESB must retain ownership of the assets, the next best solution would be to give EirGrid as much control as possible, added the authority in a submission to the commission's consultation paper on an infrastructure agreement between ESB and EirGrid.

This agreement will decide the control the ESB will retain over the transmission network. It is likely the Commission will make a ruling shortly. In its submission, the authority cited the Government decision to give ownership of the assets to the ESB, saying this and other recent developments in the Irish electricity market were "not conducive to competition".

"The generation capacity of the incumbent has not been split up or capped. Transmission assets remain in the ownership of the incumbent," the authority said. "Accounting separation is of dubious effectiveness in guarding against cross-subsidisation at the supply level," it added.

In recent months several independent power generators have expressed concern at the slow pace of liberalisation in the Irish market-place.

A commission spokesman said last night 12 submissions had been received. An ESB spokesman would not comment on the document, but said its regulatory affairs department were studying it closely.