ESB staff angry over €176m subsidy

WORKERS at the ESB have told the company its board willbe compromised if it agrees to subsidise large electricity users to the tune of €176 million at the behest of the Government.

Unions have also threatened they may pull out of partnership agreements with the company if the ESB board accedes to the Government request.

What particularly galls the electricity provider’s unions about the €176m demand is that the money will be used to give discounts to Large Energy Users (LEUs) which the ESB does not even supply. A large number are provided by the likes of Viridian, with which the ESB must compete.

There are more than 1,000 LEUs in the country, including all the major American multinationals. There is an impression among ESB unions that, as Ireland has among the most expensive electricity in Europe, the Government is trying to keep these large employers onside through the discounts.

The €176m supplement would be another bonus to the companies after the ESB announced earlier this year that LEUs would not face any rise in their electricity network tariffs from October 2009 to September 2010.

Davy Naughton of the ESB group of unions said the €176m figure was on top of a €300m subsidy by ESB to all electricity customers which arose last year and was described as a “once-off”.

“Our concerns are further compounded that this extra payment by ESB is to be used to subsidise a select number of customers (LEUs) only,” he said. “There is a certain irony in this, considering ESB cannot cross-subsidise between its own activities but is now going to subsidise LEUs, 90% of which are supplied by their competitors. ESB customers – small and medium size businesses and domestic customers – who have their prices regulated and are under the same pressure in the current financial climate, are now to subsidise the non-regulated sector whose prices are set by the open competitive market.”

Mr Naughton said the ESB was already under severe financial pressure paying for multi-billion investments in transmission and distribution networks which would benefit everyone.

“Considerable changes have taken place in ESB in the recent past, in addressing deregulation, market opening, market share, environment and climate change issues. These matters were dealt with through a partnership approach with pragmatic solutions found on all issues. The prospect of this partnership approach from staff continuing will be called into question if ESB is to be used as the singular cash cow to provide aid/subsidies to selective areas of private industry.”