Dr. Muireann Lynch:

I will come in on that second question. The evidence for those excess generation gains being passed to supply arms is that, believe it or not, I would expect to see consumer prices being even higher than we are seeing were that not happening. That is based on a little bit more than back-of-the-envelope calculations but not much more. The reason it is not much more is because the way these costs and revenues are passed among the different arms of generation companies is not very transparent. It is also highly complicated because it depends on how they hedged, how did they buy forward and whether that was on gas markets, electricity markets or both.

The Deputy's second question was around how we prevent that happening, were we to tax windfall gains. The answer, unfortunately, is that it is really difficult if the Government wants to mess around with taxing or to try to target what we call inframarginal gains in the generation market itself, because we simply do not know what they are doing with those inframarginal gains. Particularly when it comes to renewable generators, we do not actually know where that gain is going to. Is it going to the generation company? Is it going to the supply company it contracted with? In some cases, it might even be going to the windfall owners themselves. Then, if they are in the new renewable electricity support scheme, RESS, it is going back to electricity consumers.

Much of this might prove moot, depending on what happens at a European level because it seems that the restructuring they are going after is to try to remove those inframarginal gains regardless. In that case, Government would have nothing to tax anyway. Leaving that aside, however, I think going after corporate profits would certainly be prudent. That way the Government is just taxing the profits, as opposed to trying to get to the gains inside. That would certainly clear up an awful lot of the issues the Deputy raised.