Verona Murphy (Wexford, Independent)
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Amendments Nos. 1 and 2 are related and may be discussed together.

Pa Daly (Kerry, Sinn Fein)
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I move amendment No. 1:

In page 3, between lines 19 and 20, to insert the following:

“(2) To insert new subsections after subsection (4):

“(4A) The Board shall borrow to invest in projects on the basis of a prioritisation framework which encompasses—

(a) congestion softeners in areas of high congestion,

(b) security encompassing hospitals, Garda stations, water safety and wastewater treatment,

(c) basic needs encompassing residential constuction,

(d) exceptional cases of public interest,

and will exclude grid infrastructure upgrades or connections for data centres.

(4B) The Board shall, within 6 months of the commencement of this Act and annually thereafter, lay before the Houses of the Oireachtas a report detailing:

(a) the amount borrowed under section 4(4) of the Electricity (Supply) (Amendment) Act 1954;

(b) the purposes for which such borrowing was applied including a breakdown of project type;

(c) the projected borrowing required for the next year including a breakdown of project type;

(d) the impact on consumer electricity prices;

(e) the report shall be subject to review by the Oireachtas Committee on Climate, Energy and the Environment and the Oireachtas Committee of Public Accounts.

(4C) The Board shall ensure that any borrowing under this Act does not result in an increase in domestic electricity tariffs beyond inflationary adjustments, and shall publish an annual statement confirming compliance to be laid before the Houses of the Oireachtas.”.”.

Due to decades of underinvestment, our energy system is not fit for purpose. With rip-off costs and a regressive approach to financing, our electricity grid is another in a long line of Government failures. It has been plagued by critical infrastructure deficits. Millions of euro have been wasted in renewable energy every year, driving up the cost of energy. One of the current members of Government described the Government's approach in recent years as navel-gazing and sitting on their hands. It has also stopped people moving into their homes. The need for urgent action and investment in the grid is clear.

This amendment relates to a series of Acts going back to 1954. It concerns the framework that will guide the borrowing capacity of the ESB into the future.

It is, of course, the State-owned agency but it should be mandated with a focus on the common good. It will seek to safeguard against future investment in and development on the grid that may repeat the mistakes of the past, which we do not want to do. The grid needs upgrading at present and while Sinn Féin is totally in favour of increased investment in the grid, it must be done in a way that covers and supports ordinary workers and families and works for the common good of people in the State. A grid that is fit for purpose is a linchpin of many of our priorities. Of course, we want to solve the housing crisis, end the energy rip-off, bring down prices for good and create an energy market that is based on a fair funding model in which energy is treated as a public good, as I have said.

Amendment No. 1 proposes three subsections. Subsection (4A) mandates that the increased borrowing capacity of the ESB from €12 billion to €17 billion is targeted towards the public good rather than being gobbled up by data centres. The increased borrowing capacity will allow the ESB to access the capital required to fulfil the investment required in the network as outlined in the draft decision in price review 6, PR6, a final determination on which is due towards the end of this year. Grid capacity in recent years has been gobbled up by data centres and other key strategic priorities such as housing are suffering as a result. As ESB Networks itself warned against this in a recent appearance at the committee, Sinn Féin wants to ensure that the enhanced investment is targeted towards the social good rather than corporate interests. The prioritisation framework is modelled on the Dutch authority for consumers and markets, ACM, model, which refers to congestion softeners, security encompassing Garda stations, hospitals and wastewater treatment, basic needs, including residential construction, and exceptional cases of public interest. It excludes connections for data centres. They are not a priority in contrast to the priority for the need for housing.

Our amendment inserts the new subsections to include the congestion softeners in paragraphs (a), (b), (c) and (d), and proposes that within six months of the commencement of this Act a report would be laid before the Houses of the Oireachtas detailing the amount borrowed under section 4(4) of the Act of 2001, the purposes for it, the projected borrowing required for next year including a breakdown of project type and the impact on consumer electricity prices. That is vitally important in a time where we have seen the supports ripped away. Even though prices on the wholesale energy markets have been reduced by 70% over the last three years, electricity bills have increased by around the same amount. We must also ensure that borrowing under this Act does not result, as I said, in domestic electricity tariffs beyond inflationary adjustments. There should be published an annual statement confirming compliance, and that would be laid before the Houses.

Subsection (4B) enhances the transparency, accountability and oversight which, of course, is necessary. This lack of oversight was recently highlighted in the Bill's digest.

Subsection (4C), as I have said, ensures that it does not result in an increase in domestic electricity tariffs.

Réada Cronin (Kildare North, Sinn Fein)
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First, we support the need for this Bill but objected to the fact that there was no pre-legislative scrutiny. I hope the Minister will look at our amendments in good faith.

The ESB must focus on the public good. The Minister will have heard me on several occasions, here and in the planning committee and the infrastructure committee, talking about the need to strengthen the infrastructure to strengthen the grid but that it cannot be just for data centres. We have to make sure that the grid is fixed. It has been weakened by decades of lack of investment and we have to make sure that we are prioritising the grid to make sure that we can deliver the homes we so need. I was talking in the infrastructure committee today where we had the construction workers in. I was saying that when you go away on your holidays, no matter how lovely the hotel was, when you come home and you get into your own bed with your own pillow, there is nothing like it, and we have now passed the point of 5,000 children homeless. The Government is shameless. We have to make sure that by investing in the grid, we are making sure that it is for houses and not data centres. We have to treat energy as a public good and not just about increasing the data centres.

In subsection (4B), we want to strengthen the transparency and oversight. We were not happy about not having pre-legislative scrutiny. We have to make sure that the ESB publishes its annual reports and spending outcomes and price impacts.

Subsection (4C) prohibits the higher household electricity tariffs. I was talking to somebody a few weeks ago and they were saying that we used to have the cheapest energy in Europe and now have the dearest. It makes no sense.

We absolutely support the need for investment in the ESB but we have to make sure that it is done for the public good and not to supply more data centres with energy. I hope the Minister will look at that and that he agrees there has to be oversight on the expenditure of public money in the ESB.

Darragh O'Brien (Dublin Fingal East, Fianna Fail)
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I thank my colleagues for amendments Nos. 1 and 2, which I am taking together.

At the outset, I appreciate the support for this important legislation. We are about to embark on the largest and most significant investment in the grid infrastructure, pretty much in the history of the State and certainly since rural electrification. This Bill is an important part of that because it allows an increase in borrowing and it allows for the first time an equity injection in ESB, which will reduce the overall borrowing cost for it.

Unquestionably, we have a country that continues to grow. We have a population, thankfully, that continues to grow. We have full employment in this country. We have an economy that is the envy of most of Europe. I accept we still have challenges. There is no doubt about that.

This legislation will help to underpin price review 6, which is our investment in the electricity grid and in the network over the course of the remainder of this decade. I thank the Deputies for the suggested additions but I am not in a position to accept either of those amendments. In relation to pre-legislative scrutiny, I wrote to the committee seeking a waiver. That was granted by the committee. I thank the committee for doing that. I think it was recognised that this is urgent and important legislation.

The Deputies explained their new proposed subsection (4). That would bring about a prioritisation framework that would require investment in the grid along certain prioritisations. I genuinely recognise the positive intent of what is proposed to ensure the network development priorities will prioritise the connection and supply of hospitals, Garda stations and houses. PR6, when the Deputies see it published, will identify exactly what this grid investment is underpinning. That is underpinning the houses that we need. It is underpinning the social infrastructure, the schools, the industrial infrastructure that we need and the future growth. To present the argument that the amendments here are about us trying to stop Government investing in a grid purely to allow further growth in data centres is not correct. On PR6, the Deputies have seen the draft decision and the final decision should be out shortly. The Deputies will see how that is clearly itemised.

We are considering how this matter can be reviewed but as it currently stands under EU law, connection and supply must be carried out in a non-discriminatory manner. That is prescribed in EU law. However, we are currently considering how this can be reviewed and I will be happy to share that information once that review has been concluded.

Within price review 6, we will have 29 very significant projects for onshore network development planned by ESB Networks, ESBN, and EirGrid within the period of the investment programme.

The vast majority of these will serve the multiple needs I mentioned - security of supply, gird resilience and grid expansion - enabling us to bring additional renewable energy generation and distribution into our grid. Ireland is a European leader in the integration of renewables into our grid. While there are still challenges, it is important we recognise that things have been done well, although we need to do better. We need to meet the critical demand for increased power supply that is there for both residential and business customers.

The new subsection (b) will place specific reporting requirements on the ESB regarding its borrowing. Its borrowing is already outlined and published in its annual report and accounts, which are audited. In light of the significant investment by the State, and as part of the ongoing engagement with the ESB, we will develop a share subscription agreement that will require ESB Networks to provide significant detail on how it is financing, and the financing of its programme of investment, including its debt raising. As part of this agreement, ESB Networks will be required to deliver a quarterly report to me in relation to its ongoing expenditure, its project management and project delivery of the core infrastructural projects of PR 6. First, it is the investment in the quantum of money we need to invest and then it is about making sure it is delivered upon because this is absolutely critical. That will be reported to me directly as Minister. It will of course be open to ESB Networks, EirGrid and others to come in front of the Oireachtas committee, and rightly so.

In addition to the oversight by my Department, the CRU, under the PR 6 guidelines, will also require a significant increase in reporting by ESB Networks on its expenditure and programme delivery. The combined efforts of the CRU and my officials will result in very significant and appropriate oversight of this Government investment on behalf of our people. It will ensure value for money and, most importantly, expedient delivery of the critical grid infrastructure we need to support families, our citizens and businesses in the State.

On the impact of the ESB's borrowing on consumer energy prices, the amount charged to customers by electricity suppliers, including network charges, are a matter for the supplying company. We have oral questions tomorrow morning on this, but I will say that we have already published the national energy affordability task force interim report. We have taken some measures already in the budget. There are further longer term measures we will be working on towards publication of the final report in 2026. We will look at things such as network charges and length of borrowing repayments to reduce that charge on customers. To be helpful, and this is just a guide, the average annual increase for a typical domestic customer's network tariff will be around €6 over the five years to 2030. This does not mean the overall energy bills will rise by the equivalent amount because some of the investments will drive lower overall system costs.

One significant investment that will drive down overall electricity costs is the North-South interconnector, which needs to be delivered. It will be a major project to deliver grid resilience and expansion and will drive down costs for households. I hope and expect we will get support to commence and complete that consented project, which is critical to the all-Ireland electricity network and to our citizens on this island North and South.

The proposed new section 4(c) would prevent any borrowing activity by the ESB that could lead to domestic increases in electricity tariff rates beyond inflation and require the ESB to publish an annual statement confirming compliance. Under its legal mandate, it is the CRU, as the independent regulator, which is responsible for the network tariffs and grid investment plans. Network charges are a primary manner in which grid infrastructure is funded. What we have done, not just through the equity investment in the ESB but the further equity investment we will make in EirGrid, is reduce the amount of borrowing required to allow both organisations to leverage off the capital investment. The CRU sets out the network tariff to align with the grid investment plans. As such, it would not be appropriate to legislate to restrict activities related to the network.

Amendment No. 2 relates to section 3. The Deputies outlined its content. I thank them for the suggested addition, but I propose to reject this amendment also. The proposed new section 7(d) would require an independent audit of the employee share ownership plan, ESOP, as the approved scheme and for the findings to be published within three months.

The proposed new subsection (8) specifies that nothing in the Bill should be construed to allow the sale or transfer of capital stock to anyone other than the relevant Ministers and the employees of the ESB, or the trustees on their behalf. It is already the case that stock in the ESB can only be owned by the Ministers, employees and their trustees through the ESOP. Employees can only sell their stock shares to other employees, the ESOP trustee or to the ESB in a closed market. Any shares purchased by the ESB are cancelled.

The proposed new subsection (9) would involve the creation of a prioritisation framework that would require the investment provided by Government through capital stock subscriptions to be used only for projects that contribute to specific use or specified uses, while excluding upgrades or connections for data centres.

The proposed new section 10 would place specific reporting requirements on the ESB relating to the use of funds invested by the Government by way of the capital stock subscriptions.

The proposed new section 11 would, like the proposed subsection 4(c) and amendment No. 1, prevent any borrowing activity that would lead to any increases in electricity tariffs. I have already responded to the points as to why we cannot accept them.

I thank the Deputies for their support for this legislation. It is critical and important. Everyone in this House recognises the urgent need for increased investment in our grid to ensure that we can continue to expand renewables and drive costs down for domestic and business customers. We are on the cusp of a significant level of investment and output through renewable energy when, last year, over 41% of our electricity was generated through renewable sources. We intend, through these and other measures, including successful auctions we have had in relation to onshore renewables as recently as a number of weeks ago, to further expand the renewables base we have and work towards reaching our target of 80% renewables by 2030. I thank the Deputies for their amendments but I am not in a position to accept them.

Pa Daly (Kerry, Sinn Fein)
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I will come back in regarding a number of matters. One relates to what the Minister said about PR 6. While I appreciate that what was published during the summer is a draft decision, that is all we have to go on at the moment. We do not fully know what will be there but under the CRU's draft decision, households and SMEs will see their electricity network charges increase, while large energy users, such as data centres, will see reductions of up to 18%. It also stated that the grid upgrades are being driven in part by growing electricity demands from the same data centres, whose usage has increased by 400% since 2015. In effect, the entities that are driving the increased need for grid investment will be asked to contribute less while the public pays more.

Amendment No. 2, which the Minister dealt with, involves direct State investment, or money that is taken from the State coffers, in order to finance improvements that are needed. While there is overlap between the two amendments, this is more important because it relates to the investment from the Central Fund. As noted by the Oireachtas Library and Research Service, the Bill as drafted provides for the relevant authorisation of funds totalling €1.5 billion. There is no other mechanism to ensure Oireachtas oversight or control of the use of money from the Central Fund for the purchase of capital stock.

Our amendment deals with a prioritisation framework, which has been done in other countries, notably, the Netherlands. It will include security, which includes hospitals, Garda stations, water safety and wastewater treatment because it is important the structures are put in place. There has been a lot of talk recently about wastewater treatment systems around the State, or the lack of them. It is also about housing, where people who have made agreements to go into their homes have not been able to do so because the connections have not been there. It also prioritises the basic needs of residential construction and exceptional cases of public interest, as I mentioned, which also relate to the previous amendment.

The amendment also states:

(10) The Board shall, within 6 months of the commencement of this Act and annually thereafter, lay before the Houses of the Oireachtas a report detailing: (a) the purposes for which the payment was applied [so necessary oversight] including a breakdown of project type;

(b) the purposes for which the pay will be applied in the next year including a breakdown of project type;

(c) the impact [if any] on consumer electricity prices; the report shall be subject to review by the Oireachtas Committee on Climate, Energy and the Environment and the Oireachtas Committee of Public Accounts.

(11) The Board will ensure that any borrowing under this Act does not result in an increase in domestic electricity tariffs beyond inflationary adjustments, and shall publish an annual statement confirming compliance to be laid before the Houses of the Oireachtas.”.”.

While we agree with the need for more borrowing and we agree that there should be more investment in the grid, this should be done with some safeguards in place because we do not believe that they have been in place. The priorities are not there and there should be a prioritisation framework. Amendment No. 2 addresses this issue in the Bill. I accept that the committee agreed to waive pre-legislative scrutiny even though there was opposition to that. It is now ten months since Storm Éowyn took place and it was a bit rich of the Government to come in to say that it needed to do it all in a hurry when the Bill was not published until the middle of the summer. We are now being pushed into a corner with the suggestion that there is a panic that we have to do it all in a hurry. We should be getting it right before we agree to all of the legislation without what we feel are necessary amendments.

Due to the constraints on the grid, there has been a history of failing to plan properly and treating affordability as an afterthought. Since June, there have been a series of energy bill hikes from various companies. One even increased its bills on two occasions. The corporate balance sheet certainly seems to have been the priority. Checks and balances need to be put in place particularly through the provisions of amendment No. 2 where we feel that public investment should be delivering for the public good. I know that the €1.5 billion was announced in the revised NDP in July. When it was announced, the Government said that it would be targeted at expanding onshore and offshore capacity and the distribution network infrastructure. Our amendments, particularly amendment No. 2, seek to ensure that this is the case and that past mistakes are not repeated.

Réada Cronin (Kildare North, Sinn Fein)
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I am disappointed that the Minister is not accepting our amendments in whole or in part. About 21% of our electricity goes towards data centres. I think I read recently that was set to increase to 30% by 2030. In France and Germany, it is around 3% or 4%. We have to make sure that the increased investment in the grid goes towards the public good.

More importantly, amendment No. 2 deals with €1.5 billion in public funds drawn from the Central Fund rather than borrowed. The fact that this money is not voted by the Oireachtas means that there will be limited scrutiny of it. I believe the Sinn Féin amendment helps to close that gap to ensure that there will be transparency and accountability in how that money is spent, and to ensure that the investment goes towards renewable capacity, network upgrades and the public good. I believe no funds should be used for new data centres. We just do not have the energy there and the data centres are insatiable. The more we produce, the more they look for. Meanwhile, we need to start building houses.

Energy affordability has to be protected to make sure that households are not forced to pay for this through higher bills. I would like the Minister to reconsider amendment No. 2 in particular.

Darragh O'Brien (Dublin Fingal East, Fianna Fail)
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I do not intend to accept either amendment. I have outlined why that is the case. I appreciate the Deputies' remarks but have nothing further to add.

Pa Daly (Kerry, Sinn Fein)
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I move amendment No. 2:

In page 4, lines 32 to 36, to delete all words from and including “and” in line 32 down to and including line 36 and substitute the following:

“ “(c) up to such amount as will enable such employees or trustees to maintain the same percentage of capital stock they held of the total capital stock issued by the Board that they held immediately before the relevant stock was issued, and

(d) the approved scheme shall be subject to independent audit and the findings shall be published within 3 months of completion.

(8) Nothing in this Act shall be construed as permitting the sale or transfer of capital stock to any person other than:

(a) the Ministers specified in subsection (5);

(b) employees of the Board or trustees on their behalf under an approved scheme;

any future proposal to alter this arrangement shall require prior approval by resolution of both Houses of the Oireachtas.

(9) The Board may only use this payment to invest in projects that have been identified as part of a prioritisation framework which encompasses—

(a) congestion softeners in areas of high congestion,

(b) security encompassing hospitals, Garda stations, water safety and wastewater treatment,

(c) basic needs encompassing residential construction,

(d) exceptional cases of public interest,

and will exclude grid infrastructure upgrades or connections for data centres.

(10) The Board shall, within 6 months of the commencement of this Act and annually thereafter, lay before the Houses of the Oireachtas a report detailing:

(a) the purposes for which the payment was applied including a breakdown of project type;

(b) the purposes for which the pay will be applied in the next year including a breakdown of project type;

(c) the impact on consumer electricity prices;

the report shall be subject to review by the Oireachtas Committee on Climate, Energy and the Environment and the Oireachtas Committee of Public Accounts.

(11) The Board will ensure that any borrowing under this Act does not result in an increase in domestic electricity tariffs beyond inflationary adjustments, and shall publish an annual statement confirming compliance to be laid before the Houses of the Oireachtas.”.”.

Verona Murphy (Wexford, Independent)
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Amendment No. 3 is out of order.

Verona Murphy (Wexford, Independent)
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The Bill will now be sent to the Seanad. Before we move on, there are four lovely medical students in the Gallery, one of whom is the daughter of Deputy Martin Daly. They are all very welcome.