ALLOWING private power companies into the Irish energy market will not mean lower prices for consumers and could increase the threat of power cuts, ESB unions have told an Oireachtas committee.

Mr Pearse Martin of MSF told the Joint Oireachtas Committee on Commercial State Sponsored Companies "Third party access could be very damaging for the long term interests of customers". It would lead to "stranded capital investment" for the ESB and "cherry picking of large customers" by European electricity companies.

In Northern Ireland there had been a £60 million subsidy to the private electricity industry last year, he said. The total subsidy had been £240 million since the 1980s, when the sector was privatised.

He also warned that privatisation could have serious implications for regional development in the Republic.

However, Mr Martin Cullen TD of Fianna Fail said that he did not believe that "a shake up of the market will devastate this country".

The ESB operated very competitively internationally and he could not understand why the company and its unions were afraid of competition.

Senator Fergal Quinn, Independent, said competition was inevitable and the unions would have to be ready to deal with third party access,

Telecom Eireann had reduced workforce and reduced prices. This had made it more competitive and helped generate jobs elsewhere in the economy.

Mr Finbarr Dorgan of the TEEU said privatisation in Britain had led to under capitalisation of the electricity business. Now consumers were being warned of potential power cuts.

People had to ask themselves if, a British electricity company won third party access to the Irish grid would they be happy to leave it to the British to decide where the's power cuts would fall? Many hi tech industries locating in Ireland were as concerned about the quality and reliability of the electricity supply as its price, he added.