Proposals on `top-up' power-published today

Final details of a plan to limit the amount of surplus or "top-up" electricity to be sold by the ESB to independent power suppliers will be published today by the Commissioner for Electricity Regulation, Mr Tom Reeves.

A High Court challenge to Mr Reeves's original proposal by ePower, an independent electricity company, was adjourned yesterday until Thursday pending publication of the final plan, which will be implemented from September 1st.

"We issued a proposal on August 1st. We sought comments and we will make a final decision by the close of business tomorrow," Mr Reeves's spokesman said yesterday.

He described a summary paper published by Mr Reeves on August 1st as a "proposal" only. The 10-point summary paper indicated that the commission was planning to limit the supply of top-up available to independent producers in accordance with a "letter of clarification" from the Department of Public Enterprise.

The letter said it would be "incorrect" to interpret a policy direction by the Minister for Public Enterprise, Ms O'Rourke, as implying that the ESB should be required to provide unlimited power to the independent sector on demand.

The summary paper said: "The overall objective is that top-up is available to the independent sector to provide adequate back-up supplies to that sector comprising both independent generators and independent suppliers."

Last week, ePower secured leave to seek judicial review of Mr Reeves's proposal and said it would study the final plan before deciding on further action.

The company's chairman, Mr Leslie Buckley, claimed last week that the original proposal made a mockery of competition. Tariffs in the proposal would mean ePower would pay more than the ESB's industrial customers in the retail market, he claimed.

Because ePower - which plans to generate electricity in a joint venture with US businessman Mr Larry Thomas and BP Amoco - does not yet generate its own power, it sources most of the electricity it sells from the ESB.

But the ESB's position is that the top-up mechanism was never intended to cater for wholesale trade. This is similar to the argument in the Department's "letter of clarification" and the ESB claims tariffs in the current system are lower than its production cost.

Mr Reeves's original proposal was to limit the amount of available top-up to 5 per cent of the amount contracted to customers of independent suppliers. "Secondary rates" would apply for additional supplies.

Pending a consultation process, Mr Reeves's document of August 1st said the secondary price applicable would be set by the ESB with the approval of the Commission. The ESB proposed a multiplier of 1.2 times the standard rate from September 1st. From November, the proposed multiplier was 3.6 times for peak-hour rates and 1.2 for the remaining hours. From December 1st, the multiplier was 3.6 for weekday peak hours and 1.7 for remaining hours outside nights.