Warning over electricity price rise
Households and business owners could feel the pinch with electricity prices set to rise significantly next year, it was warned today.
Tadhg O’Donoghue, chairman of ESB, said the continuing rise of fuel prices was sending the cost of supplying electricity soaring.
Any price rise would have to be approved by the Energy Regulator – but Mr O’Donoghue said a price hike of up to 9% was likely.
“Last year I shocked you all by saying I expected double digits, this year I will equally shock you by saying while we at the company might like that we don’t anticipate that,” the chairman said, as he launched the company’s annual report for 2004.
As the group reported a 7% rise in last year’s after-tax profits to €267m, Mr O’Donoghue said fuel accounted for over 55% of all energy generation costs.
The chairman also assured pension holders there was no need to be concerned by the ESB pension €511m deficit.
“The assets of ESB’s Pension fund are currently valued in excess of €2.8bn. The fund has no immediate liquidity problems and is capable of meeting pensioners’ entitlements for decades ahead,” he said.
Mr O’Donoghue said he was confident that discussions between staff and workers would address the long-term problem.
He said that ESB had put in place the necessary infrastructure to facilitate full market opening but as yet no major competitor had entered the domestic market.
The company reported a record 90,600 new connections of homes to ESB Networks last year.
However, Mr O’Donoghue said the company lost €1,100 for each connection which amounted to a €100m loss for the 90,600 connections.
“We no longer can say that we will collect this over the next 30, 40 or 50 years so we need to rectify that and we are making strong representations to the regulator to rectify it. Now the cost of installing new connections must pay for themselves,” the chairman said.
Mr O’Donoghue said the company was involved in major renewal programmes in both Networks and Generation which would benefit electricity customers across Ireland.
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