Damien English (Meath, Fine Gael)

I am delighted to have the opportunity to speak on this very important issue which affects the whole country and especially my area and that of the Minister who came here last night to shout down everything we tried to say in good faith. We have many businesses in County Meath and throughout the country that are really suffering from the cost of energy. They cannot take it anymore. They have been highlighting the issue for a number of years, but nobody is listening. The Minister has allowed the regulator to approve an increase and it is getting worse as the years go on. The country cannot afford these increases, which will put people out of business. Business people write to us every day telling us that if these energy costs continue they will not be able to compete on the European market, which will result in job losses at companies like Wellman International in Cavan, Tara Mines and Kepak. These businesses are under pressure. They employ our friends, relatives and the people we represent. There is no point in saying it is big business looking for more profits. It is not about profits. They are looking to survive and they need the Government to protect them against high costs, especially high energy costs.

Ireland has the highest energy costs in Europe. We have the highest wage and insurance costs, hidden taxes such as local authority charges and so on. We are being ripped off across the board and it is leaving our industries in an uncompetitive position. That cannot continue and jobs will be lost. Many companies are being asked by their parent companies abroad the reason they are still in Ireland when they cannot afford to remain there. The increase in energy costs for one of the companies I mentioned earlier will be €1 million this year. That is a massive increase for any company to take. To deal with some of the prices, energy costs are 20% higher in Ireland than anywhere in Europe. Gas prices are up 50% since 2003. Electricity prices are up 30% and diesel oil is up 40%. The Minister said last night that we are the ones preaching doom and gloom, but that is not the case. It is the businesses which are crying out for help.

The regulator gave his reasons for the increases in energy costs. The Minister said he cannot interfere in that but we must examine some facts. The forecast price for gas next year is 45.82 cent per therm as of 6 November. That is 11% lower than the forecast for 2006, a year ago. We are entitled to expect that the regulatory regime here is such that the 11% reduction in the cost of gas is reflected in prices charged next year to Irish customers for both gas and electricity, but that will not happen because there will not be a review until September next year. The Minister mentioned last night that there is hope of a mid-term review early next year — it is a little like the mid-term elections in America — but he cannot guarantee that will take place. The Minister has the power to make the regulator act now on prices. His contribution last night was all about the future. The future is important but we are in trouble now as regards energy costs and action must be taken now.

When the regulator released his papers on fuel costs variation and the ESB tariff increases, he cited increases in gas and oil prices as the key drivers behind the increases. Correctly, coal did not get a mention. The fuel cost variation he proposed was to be based on gas price movements only. In light of that, he cannot now claim an increase in coal prices as the reason for refusing to moderate next year's electricity tariffs. Coal fired generation in Ireland accounts for only 15% to 17% of total generation. Gas accounts for approximately 50% to 55%, with oil at approximately 20%. At the end of July, when the regulator was determining the gas costs assumption to use in setting next year's power changes, the future price of coal as quoted on the intercontinental exchange for December 2006 and January 2007 were $72.65 and $72.60 per tonne, respectively. They are now lower, not higher, as the regulator claims. On 3 November, these contracts settled at $68.50 per tonne.

It is possible that the regulator is comparing apples with oranges. Whether that is deliberate, cunning or merely disingenuous, it is misleading and is not helpful to industry.

The regulator's claim that next year's increase is justified by €151 million under-recovery on fuel costs for 2005 and 2006 is not substantiated and is probably false. The Minister has a duty to explain that to us because he has a say with the regulator. He can act this year and next year to ease the pain on our employers, the people we need to give employment in this country, and those who are paying rates through county councils.

To lecture us and say it is not our job to raise doom and gloom issues is wrong. It is our job. We are being asked to do it and it is vital that we do so if our communities are to continue with their current employment levels. It is not good enough to talk about what we will do in 2012 and 2020, having been ten years in government. We are constantly being told what the Government intends to do. I read the Minister's speech last night word for word and one would think he was not in government yet but that he was only about to start the job tomorrow.

Employers explain the problem to their employees, and employees now realise who is responsible for mucking up this issue. I will know who to blame if we lose jobs, and employers will know who to blame. It is on record. The facts are there for all to see. The costs are too high. We must reduce them and we can do so. The questions I have raised, and others I have not had time to raise, must be put to the regulator. Questions are not being answered and information is not correct. It is possible to reduce these tariffs. It is not acceptable that the price of energy is set once a year. There must be an opportunity for that to be reviewed and changed on a bimonthly or six monthly basis. An attempt at a review in 2007 is not good enough. People are trying to survive. They have businesses to run. They need to plan ahead but what will happen is an even greater exodus from this country by people looking for jobs.

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