ESB's role:In a significant overhaul of the electricity market, the Government has announced an end to the ESB's involvement in electricity transmission - the movement of electricity via pylons and high-voltage cables.
The change is one of several outlined in the Government's White Paper.
The Government also plans the establishment of a landbank of sites to be used by ESB's rivals to compete more effectively in electricity generation.
The ESB is to remain in State ownership and will continue to control electricity distribution - the physical network of cables and wires used to channel electricity to customers.
But its power to increase prices is to be curbed by a new formula applied to future price increases.
Both ESB and EirGrid, the company responsible for the transmission of electricity, will remain in State ownership.
Northern Ireland electricity company Viridian, the ESB's main rival in the market for generation, welcomed the moves. "'We commend the Minister's commitment to increasing competition and creating an efficient and affordable energy market in Ireland," Viridian said yesterday.
Taoiseach Bertie Ahern and the Minister for Communications, Marine and Natural Resources Noel Dempsey stressed that the White Paper had resulted from "lengthy consultations". Mr Dempsey described the White Paper as a "strongly action oriented" document that would achieve greater competition.
"There is widespread consensus that we must reduce energy costs for consumers and deliver the best possible conditions for competition and customer choice in the Irish energy market," he said. He said the measures would be implemented by the end of 2008, but said a target date for price reductions could not be guaranteed.
"This is a series of decisions that create the atmosphere for a reduction in prices. The Regulator [chairman of the Commission for Energy Regulation, Tom Reeves] decides the prices at the end of the day."
Under the reform a "risk related rate of return" formula will be applied by Mr Reeves when it determines the prices that the ESB can charge for distributing electricity to end users. The formula will contain a downward bias on future price increases to account for the ESB's ongoing monopoly in this market.
The Government aims to enhance liberalisation of the market for electricity by completing an all-island electricity market and the building of an interconnector with the UK.
Compared to a rise in the general price level of about 30 per cent since January 2000, electricity prices have climbed by 240 per cent over the same period, significantly exceeding the extent of oil price increases.
"A portion of blame for job losses in the economy has been assigned to energy costs," Mr Dempsey said.