ESB pays over €70m in rates to local authorities

The ESB is paying more than €70 million in local authority rates each year and the company's chairman has criticised the imposition…

The ESB is paying more than €70 million in local authority rates each year and the company's chairman has criticised the imposition of such high costs on business.

The company does not disclose detailed costings in its annual report but The Irish Times understands that the ESB is now paying 10 per cent of all local authority rates in the Republic.

Chairman Mr Tadhg O'Donoghue said that, while the company accepted it must pay its fair share, the level of local authority rates on business needed to be closely examined.

"It is a major cost now. Any business operating on a large scale has to budget for this huge cost. The ESB is bearing a large burden the way the system operates at present," he said.

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Mr O'Donoghue said the rates were among a group of factors pushing up the company's operating costs, which increased from €1.9 billion in 2002 to more than €2 billion last year.

Of the €70 million in rates, some €5 million are commercial rates for ESB offices and shops located around the State. This money goes directly to the local authorities where the premises are situated.

The remaining funds are accounted for by "technical rates" for generation stations, substations and network assets spread all over the Republic.

These technical rates are set by the valuation office in Dublin and distributed among every local authority. If this was not done, Clare County Council would stand to gain a massive revenue stream from Moneypoint, the coal-burning station located in that county.

But instead, technical rates are distributed throughout the State and even councils in Dublin benefit from the link that runs between Moneypoint and Dublin.

ESB accounts for 10 per cent of all rates in the Republic, but the amount the company pays may be about to change.

The 2001 Rates Act will take the generating stations out of the "technical rates" area and into the commercial rates area. However, this Act has not yet taken effect.

While local authority rates were a major cost imposition on the company, other items were a bigger strain. For example, escalating fuel costs totalled €732 million in 2003, while payroll came in at €481 million.

Last week two major business organisations - IBEC and the Chambers of Commerce of Ireland - raised concerns about the charges imposed by local authorities on business.

IBEC said water charges were being imposed in a "punitive" and inconsistent manner while the Chambers of Commerce drew attention to the area of development levies.