Michael McCarthy (Labour)

I welcome the Minister, Deputy Dermot Ahern. This is usually the area of responsibility of Senator O'Meara, but I have done some research for the purpose of the Bill.

I wish to raise a number of issues, including the sustained increase in ESB charges. An imbalance exists in this regard in terms of the profits made by the ESB in recent times. Last year there was an increase of 13.25% and a 5% increase was imposed in January of this year. The cost of first-time connections has increased by €200. The annual report for 2002 revealed that the ESB made profits in the region of €250 million, an increase on the previous year's €159 million.

The service is a good one on which we are dependent. I accept that it must be paid for, but it is difficult to reconcile the large profits being made and the increased charges passed on to householders. This is unfair on the consumer, especially in light of the dividend that the company pays to the Minister for Finance. Last year the ESB paid €70 million to the State, the highest dividend ever paid by a State company. There is sufficient leeway to ensure that charges of this magnitude are not levied against householders.

It has been estimated that recent increases have added an average of €12 to household ESB bills. The Minister should examine this matter with a view to putting some balance into the system and halting the inordinate increase in ESB charges, particularly in view of the profits made by the company and the dividend it pays the State.

The energy regulator, Tom Reeves, warned the Minister that significant losses could be incurred by the ESB if the efficiency of older power stations is not improved. His advice should be heeded. He also stated that stations must be more often available to the national grid during the year and breakdowns or forced outages must be reduced. He probably reiterated those points when he recently addressed the Joint Committee on Communications, Marine and Natural Resources. I urge the Minister to take these points on board.

The deficit in the ESB pension fund has deteriorated by a further €100 million. The net deficit stands at €900 million. I understand that this is more to do with the actual investment as opposed to poor management, but it is a cause of great concern to employees and other interested parties.

Last February the Minister claimed that by developing an electricity interconnector project between Britain and Ireland, he was securing an electricity supply for the country. I welcome that fact. However, given the clear anti-nuclear policy of the Government, I wish to clarify if the project is dependent on energy produced at Sellafield. If that is the case, it flies in the face of Government policy. Will the Minister clarify the matter? The interconnector is a weak form of supply in the sense that we will only gain from it if there is a surplus in Britain, which cannot always be guaranteed.

There is widespread unease among the eight trade unions representing ESB workers. They warned that widespread industrial action might be on the cards following a number of weeks of talks between management and the Government. We can do without that type of industrial unease which has potential for strikes. The country was badly crippled for a number of weeks by the An Post dispute. Members of the House were aware of its negative effects. It is important that meaningful dialogue takes place between the Minister, his officials, ESB management and the unions representing workers.

Workers are seeking an 18.5% pay increase and a 20% stake in the company. Presenting a response to this will be difficult for the Government. Great credit is due to these workers in that the workforce has been reduced from 12,000 to 7,500 in recent years without them resorting to strike action, which is a considerable achievement given the number of unions involved.

The three year programme, Sustaining Progress, will lapse shortly. This provides an ideal opportunity for the Minister and others involved to reach agreement on the outstanding issues. We need to take a cautious approach. We do not wish to see a repeat of the industrial unease inflicted on the country in recent times by An Post. Many of the outstanding difficulties can be resolved through dialogue, thus avoiding strike action and power cuts.

The Labour Party has no difficulty accepting all Stages of the Bill. The role of the Seanad is to produce good legislation and it is incumbent on us to do so. By expressing our opinions in this forum we can contribute to stronger legislation.