Sparks fly in power struggle

It's been a bad week for the ESB and its subsidiary, ESB Independent Energy.

The subsidiary is competing with Denis O'Brien's ePower and Viridian to supply that part of the power market recently liberalised. To do so fairly, it was ringfenced from its parent to ensure it would not have a head start in winning business.

It emerged this week that at least one competitor felt there was not yet a sufficiently level playing field. EPower complained to the regulator about certain goings-on regarding ESB.

While Tom Reeves, the regulator, and his team failed to substantiate some of ePower's main allegations, he did decide that there was insufficient clear space between ESB and its subsidiary.

As a cure, he prescribed an onerous list of measures including the removal of the subsidiary's staff from the offices, phone lines and resources they would have enjoyed when they worked as part of the parent company.

On top of that, he decided that every single contract the ESB subsidiary wanted to sign with a customer would have to cross the desks of his office. So much for trust and a good working relationship.

ESB Independent Energy has gone to the courts to overturn the regulator's ruling. Whether it succeeds or not, we will have to wait and see. One thing is for sure: given Mr Reeves's ruling, the ESB company had little option but to lay down a challenge, if only to preserve its credibility.