"I was in that generation of the 1960s when the ESB was a very militant place to be," concedes worker director Mr Joe La Cumbre, who is still getting used to the notion of being deputy chairman of the company. He joined the ESB straight from school as an apprentice electrician and worked on new power stations all over the Republic. "It's why I have one daughter from Kerry and another from Dublin," the Portarlington man says.

It is also one of the reasons why his power base within the company is so big, although his union the Technical Engineering and Electrical Union is only the third-largest in the ESB.

He is now in his fifth term as a worker director and has topped the poll in the last three elections. His popularity is also based on his acknowledged skills as a negotiator.

Even though he is no longer directly involved in industrial relations he has played a major role, through the superannuation committee, in negotiating improvements in the ESB pension scheme.

While much attention focussed on the £240 million (#305 million) Cost and Competitiveness Review in 1996, the pension fund also received a massive transfusion to ensure benefits were maintained for the 2,000 workers accepting redundancy or early retirement. The total bill was around £330 million.

It is no accident that he has just become the first worker director to be appointed deputy chairman of a semi-state company. Nor is it merely recognition of long service.

Good staff relations are crucial to the success of the ESB in meeting the challenge of competition. Mr La Cumbre has shown a knack over the past decade of identifying areas where changes are needed and selling that change to his electorate - at a price.

He says ESB workers have always accepted the need for change and points out that numbers have been cut from 13,500 to just over 7,000 since the late 1980s. But the company has never sought such sweeping changes as they want now and have rarely been more poorly placed to pay for them.

Not only is it seeking jobs cuts in the Programme for Achieving Competitiveness and Transparency on the same scale as the Cost and Competitiveness Review but it wants operational savings worth £155 million a year, compared with the £65 million a year savings in the earlier programme. It argues that it cannot pay for these on the same scale as the Cost and Competitiveness Review if it is to prepare for competition.

For one thing, fuel costs this year are expected to increase by £70 million, or almost a quarter, adding around 5 per cent to overall running costs.

For another, the Government has frozen electricity prices as part of the anti-inflation package introduced this summer.

With major private sector energy companies such as Centricon in Britain saying they will absorb higher fuel costs, there is little prospect of the ESB convincing the Government it should be treated differently on the eve of competition with the private sector.

Competition is certainly coming faster than anyone, except Mr La Cumbre, predicted. The original target, when the top end of the electricity market was opened to competition last February, was that up to 28 per cent of business would be at risk. In reality, it was 31 per cent because growth meant more companies had crossed the four gigawatt consumption threshold than anticipated.

It had been envisaged that 32 per cent of the market would not be opened up until February 2003, but now 40 per cent will be available from February 2002. The whole market will be opened up from February 2005 instead of 2006.

At the same time as the company is demanding more pain, the workers want some of the resulting gain. Mr La Cumbre accepts that the headline increases won by groups as diverse as bar staff, nurses, construction workers and bank assistants have whetted the appetites of ESB workers, most of whom are used to being among the higher paid groups.

Like the former general secretary of the Communications Workers Union Mr David Begg, Mr La Cumbre sees the negotiation of a radically more ambitious employee share option plan as one way of persuading the workforce to accept change.

"The ESB needs innovative change, the most innovative change in its history," Mr La Cumbre says, "and ESB staff have the right to an innovative reward package as a trade-off.

"I am on record saying ESB staff should not be treated less favourably than the market allows and the market out there allows 14.9 per cent." At present ESB staff are entitled to 5 per cent of the company as a result of the Cost and Competitiveness Review.

There are problems implementing the 5 per cent deal, as the ESB has still to become a public limited company and staff leaving before then lose their rights to a share after 18 months. Mr La Cumbre says this issue has to be addressed; apart from anything else, it is proving a barrier to more and more of the ageing workforce agreeing to further redundancies.

At the moment the ESB group of unions is pursuing a much more traditional and adversarial route towards reward. The ESB Officers Association has served a 16.5 per cent pay claim based on past productivity, and the group is seeking a "floor" to lump sums paid to any staff being shed under the the new accord of £25,000.

Based on past packages the lump sum for many ESB workers would be around £20,000, with some of those in poorer paid grades such as cleaners receiving around £15,000. One major problem in conceding the unions' group claim is the potential knock-on effect across the public sector.

Unfortunately, resistance to change is strongest in the crucial powergen (power generation) division. In some places, such as the Midlands peat-fuelled stations, the Cost and Competitiveness Review has been marked by demarcation disputes and a refusal to embrace change. The result is the planned closure of all five stations, plus Belacorrig in Co Mayo. In their place will be two state-of-the-art peat stations, but they will only employ 80 to 100 people, compared with 500 in the existing facilities.

Mr La Cumbre accepts some people still have to come to terms with the implications of competition. "An unfortunate example of not coming to terms with change is the Midlands power stations situation." He says people must realise "the world doesn't stop for them. The philosophical debate over the rights and wrongs of deregulation is over and to continue it is a complete waste of time.

"The issue now is how the ESB is to put its best foot forward with the competition. The ESB is certainly going to lose some of its market share. Some of its power stations are very old and uneconomic and the ESB will certainly be unable to deal with state-of-the-art gas-fired stations from the private sector."

On the other hand he points out that the company successfully bid to provide the new Kilkeeragh station in Northern Ireland and was operating in 40 countries as consultants to power companies or operating power stations. Altogether ESB operates plants producing 3,000 megawatts abroad, a similar amount to that expected to be generated by the private sector here after full competition arrives.

"The message is the same for ESB workers whether they are in powergen or in the customer and business service units," he says. "The power market will change. It is sad that it had to happen, but when six power stations can close, there is a message for everyone else."

Since his appointment as deputy chairman of the board, Mr La Cumbre has been reluctant to comment on the various options open to the company, including privatisation. However, it is no secret that in the past he has strongly opposed a strategic alliance, on the basis that the only reason one of the major players like General Electric might toy with the idea would be to gobble up the Irish operation.

He says the current negotiations "will be difficult but I am absolutely convinced they will be successfully concluded. To accept anything else is to accept that the company is not able to deal with change".