ELECTRICITY CONSUMERS are being overcharged by as much as 10 per cent in a “scandalous rip-off”, Fine Gael’s spokesman on energy Simon Coveney told the MacGill Summer School in Glenties, Co Donegal.
In a session on Energy and the Economy, he pointed out that the Government was providing Carbon Allowance Credits free of charge to suppliers of electricity but that these companies were required to add those charges to the bills issued to their customers.
“After 2012 all electricity generators will have to purchase carbon credits for every tonne of carbon emitted while generating power,” Mr Coveney said.
“However, from 2008 to 2012 the Government is giving Carbon Allowance Credits for free to all generators as we prepare for full carbon trading, post-2012.
“This approach seems reasonable until you consider that power generators are required to charge energy users for the full value of carbon emitted during generation.
“So generators get the credits for free but they charge full price for those credits when billing consumers. As a result, the average electricity bill for families and businesses in 2008 had a 10 per cent increase directly attributable to carbon charges even though there is no added cost for electricity generators attached to carbon credits.”
He said that, “getting rid of carbon charges, on a temporary basis, until 2012, would reduce electricity costs by between 7 per cent and 10 per cent overnight.”
On electricity prices in general, Mr Coveney said: “Sustainable Energy Ireland this week confirmed yet again that, in the business sector, Irish electricity prices are above the European Union average in all bands, ranging 12 per cent to 38 per cent above the EU average. Domestic household electricity is also the most expensive in the EU.”
He continued: “We have the ridiculous situation at present where Bord Gais and Airtricity are offering households significantly cheaper electricity than the ESB . . . yet the ESB is not allowed by the Commission for Energy Regulation to reduce its prices to compete. So we have spent 10 years trying to deliver a competitive marketplace for households and, now that we have real competition, the regulator is keeping ESB prices artificially high.
“The reason given is that Bord Gais and Airtricity need to be allowed to get a sizeable foothold in the market . . . This is nonsense and consumers are paying too much for their ESB bills as a result.”
On a separate pricing issue, he said: “The ESB’s response to high electricity prices for business is to ‘re-balance’ electricity prices in favour of business. In other words, they want to reduce electricity prices to business by increasing them for households. I’m happy to consider any proposal but remain to be convinced that households should have to have an increased price burden to give business some relief.”
Rejecting claims that Irish electricity prices were among the highest in Europe, ESB chief executive Pádraig McManus told the school: “In Ireland as in some other countries there is a standing charge: this distorts price comparisons for lower users. Approximately 300,000 out of two million customers use very little or no electricity – empty houses, holiday homes, farm buildings. Eurostat figures show that, in the domestic and commercial sectors, electricity prices in Ireland are only marginally above the EU average.”
In terms of electricity prices, “Ireland’s problem lies in the industrial sector. In the 1990s when ESB was virtually the only supplier in the Republic, the tariff, as structured, favoured the industrial sector. Today, all prices are cost-reflective. However, in countries like Denmark, Germany and Holland, the domestic and commercial tariff is way above the European average, while the industrial tariff is below the European norm.
“This fact is well-known in the energy sector,” he said. “We cannot redress this imbalance overnight, but over a more gradual period it would be possible to realign tariffs in favour of the job-creation sector.”
In the past year, the ESB had subsidised the entire market including competitors’ customers to the tune of €567 million: “It is time for others to play their part.”
