ESB under fire over move to seek price hikes

THE ESB was severely criticised yesterday for seeking to charge customers between 12 and 13% more when the company made profits of €249 million last year.

The price hikes, if granted in September by Commissioner for Energy Regulation Tom Reeves, would represent the fourth series of increases in as many years.

The Fine Gael spokesman on marine and natural resources, Simon Coveney, said additional increases would be “totally unacceptable”.

“While I recognise that the cost of oil and coal has increased in recent months, to expect consumers to pay considerable price hikes on their electricity bill is unreasonable when the cost of living in Ireland is at an all-time high and when businesses and industry are weighed down by cost increases,” he said.

“It also has to be asked why the price increase is being passed on by a company that last year made a profit of €249 million.”

The increases granted in 2001, 2002 and 2003 saw the average price of electricity climb by 24% for businesses and households combined.

When taken alone, the price for domestic users rose by 27% in that period.

Last year’s hike meant the average two-monthly bill for households reached €100 for the first time.

Now, if the additional increases are granted, that bill could jump to more than €110. Labour spokeswoman on consumer affairs, Kathleen Lynch, said consumers would be hard-pushed to afford further increases.

“A wide range of stealth taxes has driven up household bills,” she said. “Just recently, we found that VHI costs have doubled since 1997; since 1999 gas bills have risen by 9.1%, while motor tax has risen by 12%. The energy regulator must insist that the ESB look for efficiencies within its own company rather than seek another rise.”

The ESB was reluctant to comment yesterday, other than saying it was “engaging” with the regulator on the issue.

However, when announcing the company’s 2003 results in May, ESB chairman Tadhg O’Donoghue warned consumers to “brace themselves” for the possibility of higher prices because of the increase in oil, gas and coal costs over the previous six months.

However, the Irish Small and Medium Enterprises Association (ISME) yesterday said the fuel increases were “a red herring.”

“The question needs to be posed whether it is merely a coincidence that an application for a further price hike is forwarded at a time when the ESB is fending off threatened industrial action on foot of a further 18% wage rise demand by employees,” said ISME chief executive Mark Fielding.

“The excuse provided with regard to increased oil costs is a red herring and an opportunistic attempt to once again pull the wool over the meek eyes of the regulator.”