ESB to seek sharp rise in electricity prices

A sharp rise in the charges for electricity is to be sought by the ESB because of the recent price rises for oil and coal.

Announcing the company's annual report for 2003, ESB chairman Mr Tadhg O'Donoghue said the ESB had hoped to seek "modest" increases from the Commission for Energy Regulation but "because of the current fuel crisis such a modest increase is no longer possible".

The ESB reported after-tax profits of €249 million in 2003, an increase of nearly €89 million, or 56 per cent, compared with 2002. The company said it would pay the State a dividend of €67 million.

The Minister for Communications, Marine and Natural Resources, Mr Ahern, gave a frosty reception to reports that the ESB will be seeking to increase its charges. He suggested it would be better for such a profitable company to look for efficiencies within.

The reduction of the ESB workforce by 1,100 under the Programme to Achieve Competitiveness and Transformation (PACT) agreement had reduced operating costs, the company said, adding that a further 500 staff will leave in 2004.

Mr O'Donoghue said cash flow from operations could fund only 41 per cent of the ESB's capital programme for 2003, resulting in net borrowings of over €700 million on investment of €1,294 billion. The company plans to invest another €1.5 billion in its network over the next two years.

He said the electricity market grew by 3.3 per cent in 2003 as the company reported a record 77,000 new connections to ESB networks.

The annual accounts also show a €510 million deficit in the ESB pension plan. ESB chief executive Mr Padraig McManus said he was confident this could be overcome, in consultation with staff.

The company said a decision would be made later this year on the future of Moneypoint, which requires an investment of over €200 million in emissions-cleaning technology under the terms of the Kyoto Protocol.