ESB staff bonuses partly linked to level of profits, committee told

The Oireachtas committee on environment and climate action heard about 125,000 Electric Ireland customers have fallen behind with their energy bills
ESB staff bonuses partly linked to level of profits, committee told

ESB executive director Pat Fenlon said the company would review a €3m hardship fund meant to aid customers struggling to pay bills.

ESB staff bonuses are partly linked to the level of profits made by the company, senior management has told TDs and senators.

Amid deep public anger at the extraordinary profits posted by ESB companies this year at a time of multiple price increases, the ESB said it offered a “market-based” bonus package.

ESB executive director Pat Fenlon told the Oireachtas committee on environment and climate action: “The bonus is impacted by profit but up to a cap so increases in profits do not have any impact. It is a percentage as opposed to being linked specifically to the profit level.

"We are in the process of recruiting 1,000 people in what is a very competitive marketplace. Overall, it is important that we have market-based pay for our staff and to attract new talent to the company.”

Fianna Fáil TD Christopher O'Sullivan said consumers and customers would have great difficulty accepting that a €357m profit cannot translate into reduced bills for the customer.

"Mr Fenlon referred to a hardship fund of €3m, about 0.8% of the €357m profit. Clearly, therefore, there is a mechanism for ESB to do something for consumers, particularly those who are finding it most difficult to pay. 

"Surely the €3m figure can be looked at and increased significantly to ease the burden on those who are impacted most by these increasing bills,” he said.

Mr Fenlon said the company would review a €3m hardship fund meant to aid customers struggling to pay bills. “And we will review how we can help customers over the winter period,” he added.

"We understand, therefore, that when people hear those profit numbers, they can be difficult to reconcile. We understand this is a very difficult time for many of our customers who have significant difficulty paying the increased bills. 

"We are engaging daily with customers who are in difficulty and working with them to help them deal with those increases by putting in place payment plans,” he said.

Charities St Vincent de Paul and the Money Advice and Budgeting Service (Mabs) administer the fund and issue energy credits to customers.

Electric Ireland is part of the ESB Group, which owns generating plants. However, regulations demand both businesses operate separately, so ESB cannot use profits from power plants to offset Electric Ireland’s rising costs.

The committee heard about 125,000 Electric Ireland customers have fallen behind with their energy bills.

Mr Fenlon told the committee that Electric Ireland’s wholesale electricity costs would soar to €2bn this year from €300m in 2020.

Mr Fenlon said the figure of 125,000 customers falling behind with their bills, was an increase on the 100,000 who were in arrears during Covid-19.

ESB, as a State-owned company, pays half of its profits back into the State, between a dividend policy of 40% and tax, while the other half funds investment in energy infrastructure, which is critical to delivering not just reliable electricity supply but also the net-zero transition into the future for Ireland, Mr Fenlon said.

The ESB has €17bn of assets. The profit at an operating level is similar to that in the half-year period for last year.

“From a competitive point of view, our prices — we have continued to try to offer prices that are as competitive as we can — and our standard variable tariffs have tended to be at the lower end of available prices for the past 18 months,” Mr Fenlon insisted.

More in this section

Let Me Tell You

Let Me Tell You is a new bespoke podcast series from 

Logo IE

Hosts Daniel McConnell and Paul Hosford take a look back at some of the most dramatic moments in recent Irish political history from the unique perspective of one of the key players involved.

Bespoke political podcast series from

Logo IE
IE_logo_newsletters

Select your favourite newsletters and get the best of Irish Examiner delivered to your inbox

Execution Time: 0.248 s