Michelle Mulherin (Mayo, Fine Gael) | Oireachtas source

I join in the welcome for the commitment to unbundle Bord Gáis, remove the energy generation aspect of the business and sell it in the public interest, as eloquently described by Deputy Joe O'Reilly, for job creation and badly-needed investment in strategic infrastructure, such as water, broadband and energy. Not too long ago, Deputy Colreavy's party tabled a motion suggesting that money should be obtained from the European Investment Bank and the National Pensions Reserve Fund to create a stimulus package for jobs. Everyone in these Houses would like to see such a package and this is a real way to do so. We are on course to do it and, from that point of view, it should be welcomed. The budget of the Department of Communications, Energy and Natural Resources is paltry compared to its potential to build our way out of this economic turmoil. The jobs of the future are in that Department but the budget does not match it. We know why that is and the role of the troika and other elements has already been explained.

I understand why there can be much emotive language about privatisation. Considering the situation of energy generation and supply, whether gas or electricity, having semi-state companies in competition with one another in this realm is not good for the Government as a stakeholder. This means that ESB, Bord Gáis, Coillte and Bord na Móna are at the same job of energy generation and, in particular, electricity generation. We witness this on the supply side when they are competing for customers. These companies spend millions on marketing campaigns and paying people to knock on doors, with Electric Ireland asking consumers to move from Bord Gáis and Bord Gáis asking people to move from Electric Ireland. A number of years ago, Bord Gáis paid €2.4 million for the naming rights to the Bord Gáis Energy Theatre. All of this is reducing dividends to the taxpayer and the shareholder, the Government, and the consumers' interest on the generation side is not best served by the State competing. We should not confuse the sale of Bord Gáis with the sale of a natural resource. Some 98% of our gas, on average, is imported. Bord Gáis takes in a commodity and converts it into energy. Private companies in the market are doing the same thing so it is not a Holy Grail as far as I am concerned.

To get the best value, the State should not be competing with itself. That position is borne out in the McCarthy report, which points to another State company, ESB, which is in control of more than 60% of generation. This introduces complications to the energy market, with energy rules requiring adjustments and equalisation exercises to reduce its generation share to 40%. This all comes at a cost. There is a problem with competition on the energy generation side. The best interests of taxpayers, consumers and the State mean that this must be addressed. It is well documented but it does not grab the headlines like privatisation.

Eircom has been mentioned many times in the House. I understand why, because it was a disaster. Adding Government involvement means it is like oil on a bad fire. We must be more discerning in respect of what happened at Eircom. A private company purchased Eircom, stripped assets and loaded the balance sheet with debt. When the generation side of Bord Gáis is being sold, we must get a company that is prepared to grow and invest in the business and compete in the Irish market in the interests of the consumer. If we learn nothing else from what happened at Eircom, we must learn that that is a prerequisite. It can be done right.

I am perplexed about the following matter and perhaps the Minister of State, Deputy O'Dowd, can provide an answer. It is generally agreed that there are benefits to competition. The wisdom is that the consumer is best served when no one has a dominant position and where no company has a market share in excess of 40%. ESB has in excess of 60% of generation and Bord Gáis has 50% of the gas market. My bewilderment arises from the decision of the regulator to deregulate ESB at 60% and to deregulate Bord Gáis at 55%. Once the market share of each company drops below these levels, the companies can control their own prices. In excess of it, the energy regulator controls the prices. That does not fit with common sense. There is a lot of talk about the burden on consumers in respect of energy prices, but the decision of the regulator does not help consumers. I would like to know why the regulator made such a decision.

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