ESB 'not allowed' to pass on flood costs to customers

The energy giant could be facing huge payouts in compensation after the Supreme Court ruled it was negligent when floods deluged Cork City in 2009.
ESB 'not allowed' to pass on flood costs to customers
Flooding on Cork's Carrigrohane Road and Lee Fields in 2009. Picture: Denis Minihane

The ESB will not be allowed to pass the potentially massive compensation cost of the 2009 Cork flood onto customers, the Commission for Regulation of Utilities (CRU) has said.

The energy giant could be facing huge payouts in compensation after the Supreme Court ruled it was negligent when floods deluged Cork City in 2009.

In a judgement earlier this month, the court found the ESB was negligent in its operation of the River Lee dams and is liable for some of the flood damage caused to parts of University College Cork (UCC).

UCC suffered extensive property damage on the night of November 19, 2009, and the morning of November 20 when, after days of heavy rainfall, the ESB discharged tonnes of water from behind its hydroelectric dam at Inniscarra.

The subsequent flood swamped the Lee Fields and continued towards the city, impacting vast tracts of the inner city centre.

There have been questions as to whether the ESB Group, which owns ESB Networks, could potentially pass on costs to customers in the coming years to shore up funds.

The CRU, which oversees utility pricing, has now confirmed the ESB Group will not be permitted to do so.

“ESB Networks DAC is a legally separate company within the ESB Group and is regulated by the CRU," said the CRU in a statement to the Irish Examiner.

"The money that ESB Networks is allowed is approved by the CRU every five years through a price control. 

"The costs that are allowed by the CRU are the reasonable and efficient costs incurred by ESB Networks for the operation and maintenance of the electricity network only. Any costs incurred by ESB Group will remain their responsibility.” 

It emerged earlier this month that the ESB made no financial provision for claims arising out of the 2009 Cork flood because it did not think UCC’s appeal to the Supreme Court would be successful.

In its 2019 annual report, the company said that as well as the UCC claim, the ESB has been served with 388 sets of proceedings relating to the flood event. 

It said details of amounts claimed have not yet been received and a reliable estimate of the cost was not possible pending the ruling.

The ESB declined to comment.

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