Liz McManus (Wicklow, Labour)
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Question 46: To ask the Minister for Communications; Energy and Natural Resources if he will direct the Energy Regulator to abandon his plans for the rebranding of the ESB and An Bord Gais; if his attention has been drawn to the fact that the estimated cost for this measure for An Bord Gáis is €40 million; and if he will make a statement on the matter. [37997/10]

Eamon Ryan (Dublin South, Green Party)
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As part of the electricity deregulation process, the Commission for Energy Regulation (CER) commissioned market research which indicates that there is confusion among electricity consumers as to the separate identities and roles of ESB as owner and operator of the electricity network and ESB as an electricity supplier.

This is of concern because ESB Networks must provide, and be perceived to provide, the same level and quality of service to all customers irrespective of their electricity supplier.

It is vital for consumers to have full confidence that they can switch supplier without any impact on the quality of their network service. Therefore, as part of the deregulation process and the delivery of real competition, ESB is required by the CER to rebrand its electricity supply business.

ESB would also in any case be required to engage in some form of rebranding as part of the implementation of EU Internal Energy Market Third Directive. Member States are obliged under the Directive to ensure that there is absolute clarity for consumers as to the separate identities and functions of the energy network operator and a related energy supply company. For this reason, the issue of rebranding needs to be addressed for both ESB and, in due course, BGE.

ESB has advised that rebranding will have an estimated cost of between €6 and €8 million. The CER has also confirmed that there is no plan to include the costs of rebranding in ESB's regulated revenues in the period 2010 to 2012.

ESB has made it clear that the company will introduce its new brand in a practical and cost effective way without causing inconvenience, expense or confusion to customers.

Once full electricity market deregulation has been introduced, expenditure on advertising and marketing, and whether these costs are met from electricity revenues, will be a commercial decision for all competing suppliers including ESB and BGE. The deregulated market will maintain constant pressure on all costs incurred by suppliers, who will be competing vigorously on price offerings to customers.

Turning to the gas market, there is no specific proposal or timescale or firm costings as yet for rebranding. However, with the successful development of competition in the retail gas market, the CER intends to publish for consultation in the coming weeks a roadmap for gas market deregulation. The question of rebranding is likely to be addressed in that context.

In the context of delivering full competition in the gas market and delivering on EU requirements, all concerned are committed to ensuring any rebranding of BGE is done in a fully cost effective and transparent way.

Liz McManus (Wicklow, Labour)
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I thank the Minister for his reply. However, it shows a complete lack of understanding of the current situation affecting customers, who are reeling from a 5% increase in electricity prices. Many are experiencing such difficulties that their supplies are being cut off. Almost 2,500 disconnections from the electricity supply are taking place every month. Does the Minister not agree that it is totally unacceptable for the public to discover that millions of euro are to be spent on a costly rebranding exercise that is not necessary and has no justification, and whose cost will be borne in some way or another by customers? It is unacceptable at a time when public finances are dwindling and most people are desperately afraid of the impact of the economic recession.

Surely the Minister understands that the public mood cannot tolerate the squandering of millions of euro on an exercise that is unnecessary and has not been costed by the regulator. Does he accept that he has within his power, since he is, in effect, the person who regulates the Commission for Energy Regulation, that under legislation he has the power to direct the regulator to desist from embarking on this costly and unnecessary exercise? Does he not accept that there has been no complaint about electricity networks? This is not an issue for competitors who want access. It never has been an issue since competition was introduced.

The Minister has to get a grip on the reality facing people and sort out this costly exercise, priced at €40 million for Bord Gais. He gave a figure for the ESB that is only one figure bandied about. The regulator made a decision that applies to the retail sector of the ESB without having costed the price of his decision. Surely that in itself requires the Minister to take action.

Eamon Ryan (Dublin South, Green Party)
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I am absolutely aware of the disconnection and the fuel poverty issues. I am also aware that competition has helped our consumers by driving prices down and we want to keep that up. We want to see the competition that we have introduced continue to work. Deputy McManus has been saying that we want to see the ESB get into that competition to get these companies fighting each other in order to bring prices down.

In making sure such competition was possible, the ESB and the regulator agreed that they would rebrand the company's supply business as part of that move towards a more competitive market. It is the ESB cost estimate of €6-8 billion that I am quoting. Having looked at the estimates, the regulator stated that it would not be put on the price to consumers. The benefits we get in competition are a multiple of any such cost effect.

I do not know why the figure in respect of Bord Gais came up in the debate held at the committee, but there is nothing in the regulatory process that is forcing a rebranding exercise that would cost that kind of money. That is a matter for Bord Gais and its representatives, who came out with the figure in the committee hearing. It is not coming from the regulatory process.

Competition works here. It has delivered significant reductions to the Irish public. This will help it further. The regulator is given the job to manage a competitive regulated market. He is doing it well and that is the right approach for the Government to take. We should let the regulators and the company work out the finer details of how competition of how competition works.

Liz McManus (Wicklow, Labour)
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The cost of electricity has gone up considerably. It is coming down but it still is not coming down as much as it has gone up. The ESB made a strong case to the regulator not to rebrand, but the gun was put to its head. If it wanted a deregulated market, it had to go to 60% and rebrand, or 40% without rebranding, which is the true figure. What kind of a choice is that?

Those decisions were made even though the regulator did not have the faintest idea of the costs involved. He was at the joint Oireachtas committee what assessment was done on costs. He said there was no assessment and he did not know.

Séamus Kirk (Louth, Ceann Comhairle)
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Deputy, there are time limits on this.

Liz McManus (Wicklow, Labour)
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The Minister said he did not know from where the figure of €40 million came. It has come from Bord Gais repeatedly.

The Minister and others have said that everything is up for grabs now because we are in a completely new situation. Even if it is a small gesture to the hard pressed consumer who will ultimately pay, the Minister should state that he will direct the regulator not to continue on this path of squandering money unnecessarily at a time when everybody is having to watch out how they pay their bills and has to take due to the uncertain times in which we live.

Eamon Ryan (Dublin South, Green Party)
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It is not just the regulator. It is also contained within the third energy package coming from Europe.

Liz McManus (Wicklow, Labour)
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It is not. Other countries do not do this. That is crazy.

Eamon Ryan (Dublin South, Green Party)
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The directive is there. It was negotiated at great length. It was done with the interest of consumers at its heart.

Liz McManus (Wicklow, Labour)
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The Minister should not worry about the directive.

Eamon Ryan (Dublin South, Green Party)
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It clearly states that such rebranding between supply businesses and network businesses should be done.

I find it hard to understand where the Bord Gais figure is coming from, given that there have been no negotiations on rebranding, other than what already has taken place under such a European directive system. The creation of Gaslink, which is a separate name and operation to Bord Gais, came from a European directive implemented by the regulator at very low cost and with little fuss.

Liz McManus (Wicklow, Labour)
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The Minister should not hide behind the regulator.

Eamon Ryan (Dublin South, Green Party)
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I will not hide behind the regulator. I will continue to push the regulator and the companies in this market towards greater competition, because that is what brings down prices and will get a better service quality. Irish householders know that. They can see it in the 20% reductions in gas offers that have been put out to the market at the moment. We can get those 20% price reductions by pursuing the right competition policy. It is happening, it is working and we will continue with it because we will continue to bring prices down. The 20% reduction is a reality.

Liz McManus (Wicklow, Labour)
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It is a 5% increase and the Minister knows that.

Eamon Ryan (Dublin South, Green Party)
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That 20% reduction by Bord Gais is there.

Liz McManus (Wicklow, Labour)
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The Minister should have some appreciation of what people are going through.

Séamus Kirk (Louth, Ceann Comhairle)
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We must move on to the next question.

Eamon Ryan (Dublin South, Green Party)
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I do appreciate it, and the Deputy should recognise that the 20% reduction is also real.