ESB to pay State record E80m

Ian Guider

The company's annual report for 2004, which is due to be published next week, will show the dividend payment to the State coffers has risen by E13m on the E67m paid out in 2003.

The payment makes the ESB the largest contributor of the semi-State sector to the public purse. It will be paid out of the company's profits, which are expected to hit 270m. The annual report was due to go to the Cabinet for formal approval yesterday and is expected to be released next Thursday.

The dividend payment is much higher than what Bord Gáis paid out in 2004 E9.6m even though its profits are nearly half that of the ESB.

The Dublin Airport Authority handed over E2.2m in dividends to the Department of Finance last year.

The ESB will also say that it added 90,000 new customer to the national grid last year and that demand for electricity continues at a faster pace than in other EU countries.

It connected 77,000 customers the previous years.

On the downside, the annual report will also show that the employee pension fund deficit has increased.

The fund had a liabilities of E500m in 2003 and this has more than doubled since then.

The rise in profits at the firm will increase pressure on its management to provide extra funding to the scheme.

The deficit will also place pressure on the company to borrow to plug the hole.

The ESB recently completed a E1.2 billion loan facility from a consortium of Irish and international banks, though these funds are expected to be drawn down for capital investment and not the pension fund.

Much of the borrowing facilities have already been earmarked for a major upgrade of the electricity network. Last year the ESB spent E700m on the network and over E2bn since 2002.

A new peat generation station is set to open in Offaly later this week, at a cost of 100m. The company also spent E120m on an IT system to allow other energy suppliers to bill customers.

Although the residential electricity market was opened to full competition in February of this year, the ESB has yet to face a challenger to its dominance of the domestic market. The company is believed to be seeking another price increase form the energy regulator Tom Reeves, its fourth in four years.

Much of the increase is to offset its higher fuel bill.