ESB deregulation could lead to job losses and higher prices
BY ROBBIE MacGABHANN
Privatisation of the ESB is to begin this week as the Dublin government sets out to implement an EU directive on deregulating the electricity generation industry. Public Enterprise Minister Mary O'Rourke is to publish a statement of principles on government plans for the sector.
From this Saturday, the 300 largest customers of the ESB will be able to buy their power needs from sources other than the ESB. After deregulation, the ESB will be split. An Independent Transmission System Operator will run the 26-County grid. The ESB power stations will be spun off into a separate power generation company. ESB unions have disagreed with the minister as they fear up to 1,300 ESB workers involved in grid maintenance could lose their jobs. There is also a question about who would eventually own the transmission lines in the grid, which are valued at £400 million.
Mary O'Rourke has her work cut out if she wants to convince us that electricity deregulation will not mean job loses, higher prices and of course higher profits for the new private sector consortiums
Meanwhile, a range of prospective entrants are gathering at the gates, driven by the prospect of potentially substantial profits from the power generation market.
Among them are Viridian, the Six-County power company, which was forced to pay a windfall tax of £47 million in 1997 and had to pay out £11 million in rebates to customers in 1997.
Viridian was also forced to cut its prices by 25% in 1997. Electricity prices in the Six Counties are still well above prices in Britain and Ireland. Six -County regulator Douglas McIldoon has in the past accused the electricity industry of ``hoodwinking customers''. He believed there was no reason why electricity prices in the Six Counties were higher than elsewhere.
Currently, electricity prices in the 26 Counties are among the lowest in Europe. It is unclear how the minister proposes to ensure that customers in the 26 Counties will not be asked to pay higher power prices after deregulation.
It seems highly likely that the corporate customers will get cheaper power while the ordinary householder will end up with price increases. Mary O'Rourke has her work cut out if she wants to convince us that electricity deregulation will not mean job losses, higher prices and of course higher profits for the new private sector consortiums.