Oireachtas Joint and Select Committees

Wednesday, 11 December 2013

Committee on Transport and Communications: Select Sub-Committee on Transport, Tourism and Sport

Rationale for Sanctioning Energy Price Increases: Discussion with Commission for Energy Regulation

2:40 pm

Mr. Dermot Nolan:

I will explain the process and we can try to provide further calculations as necessary. We began with the €2.1 billion figure. I indicated earlier to an idea that the way major network investments are made - particularly one of this magnitude - is to pay for them over 50 years. We considered the €2.1 billion as going over the 50-year period. It is repaid according to a rate of return, which is standard for all major network investments. We used a couple of different rates of returns and got a figure around that. We have basically considered how to pay the €2.1 billion over 50 years, which is standard practice, with a rate of return allowed on the investment.

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