Mr. Dermot Nolan:

I will reply on the issue of networks. Broadly speaking, EirGrid is a monopoly which we regulate directly. Capital expenditure and all its expenditure, capital and operating, must be approved by us. In accordance with standard practice for economic regulators, we generally do this by way of a five year plan. I hope that does not sound too Stalinist. Every five years we do a very major review of prices, capital expenditure, operating expenditure and make it as efficient and make as many cuts as possible. We are doing one again in the next 18 months. In so doing, the capital expenditure comes for approval in terms of expenditure by the CER.

Undergrounding and overgrounding have received much attention recently. We have approved some of the capital expenditure on the basis of it being overgrounded. In terms of the effect the Deputy referred to regarding undergrounding, I will try to give my best estimates. The one in three to which the Deputy referred was an independent study commissioned by the Department of Communications, Energy and Natural Resources, which focused specifically on one project, the North-South interconnector. It was done by a panel of independent experts and came out with a conservative estimate that there would be at least a 3:1 ratio in terms of capital expenditure, and maybe a little higher. The only thing for which there is very clear evidence is that there is at least a 3:1 ratio on capital expenditure.

Some of the other projects, including Grid Link and Grid West, have not been subject to that specific degree of analysis. In terms of the estimates I will talk about, we are assuming roughly a 3:1 proportion generally. That could vary according to different minds but that is our best guess now. If one gets that 3:1 proportion, and this is purely capital cost, we estimate it will lead to an overall increase of approximately €2.1 billion to underground all those projects instead of overgrounding. I will not comment on whether that is right, wrong or indifferent. That is our current estimate. In terms of the effect undergrounding would have on prices, generally capital projects cost a lot to build and are paid for over time. Something of that nature is generally recovered over 40 years, or in this case more likely 50 years. We have done some imperfect estimates. If the three major projects that are the subject of this debate, Grid West, Grid Link and the North-South interconnector, were all undergrounded, we estimate it would lead to an average increase of 3% per year for the next 50 years. That is our best estimate. That is 3% on one's bill every month.