Electricity bills to stay high

ELECTRICITY bills look set to remain high even after the market is fully opened to competition next week. Padraig McManus, the chief executive of the ESB, said the soaring price of oil and gas and the cost of investing in new power generation plants meant it was very unlikely customers would see bills decline.

From February 19, all domestic and business customers will be able to change electricity supplier.

While the move will benefit business customers, residential users are unlikely to have any option but to remain with the ESB as the main rival to the State-owned company, Energia, is focussed on industrial and commercial users.

"There is no doubt about it that the amount of competition will be slow to develop. New entrants will always look at industry and commercial sectors and only when they feel they have got the absolute maximum out of these sector will they look at the domestic sector," Mr McManus said.

"That is what has happened in every other country to date and I expect it will be the same here."

Mr McManus said the company's market share would fall to 43% by 2007 when a number of planned power stations are built and this would be a boost to competition.

He added that the ESB is considering building power stations in Britain, Holland and Northern Spain. Its international operations will make up for a loss of market share in Ireland, though it has no plans to become an electricity supplier outside of the Republic and Northern Ireland.

Mr McManus also said the review of the Irish energy sector should not lead to the break-up of the ESB.

"Breaking up the ESB will not reduce the price of electricity and I think that is a fundamental that most analysts looking at the sector will agree with.

"Creating five [companies] out of one ESB will not improve the price of electricity. In fact with smaller entities, you are likely to see price increases.

"If you look at the electricity sector across Europe, the utilities have got bigger and bigger. Even though ESB is a big company by Irish standards, in the electricity sector it is a tiny company," he said.