ESB makes contribution but prices set to rise

The ESB is to make a once-off €300 million contribution to the cost of electricity aimed at offsetting forthcoming price increases due to rising international fuel costs.

The move, announced today at the launch of the company’s annual report for 2007, is estimated to reduce average network charges for its customers by between 8 and 10 per cent.

However, this contribution is expected to only partially offset overall price increases due to be announced by Commission for Energy Regulation in the coming weeks. Even after the contribution, consumers are likely to face price increases of about 20 per cent in October.

Labour spokeswoman on communications, Liz McManus, said the expected price rise was “very worrying,"

"I recognise that our dependance on costly imported fossil fuels have impacted on the cost of generating electricity but the ESB and the Government must be aware of the needs of those on lower incomes,” she said.

She called on the Government to come up with a strategy to ensure that families on low incomes will be able to heat and light their homes in face of escalating costs. She called on the Commission for Energy Regulation to ensure that any price hike is not introduced until after this year’s Budget.

ESB chief executive Padraig McManus said agreement had been reached with the Commission for the ESB to make a €300 million exceptional contribution to help offset forthcoming price increases.

The ESB declared after-tax profits of €432 million for 2007, based on a turnover of €3.5 billion, the largest in the company’s history.

A dividend of €123 million is to be paid to the Government.

The report showed the company connected 94,400 new customers last year, bringing the level of connections since 2001 to over 580,000.

Chairman Lochlann Quinn said: “In an industry facing unprecedented challenges, ESB’s healthy financial performance provides a solid foundation for its recently announced €22 billion investment strategy aimed at radically reducing carbon emissions while enhancing security of supply.

Mr Quinn said: “2007 was a year of significant change in the electricity sector in Ireland with the introduction of the Single Electricity Market. ESB’s generation market share is now 40 per cent of the all-island market.”