Feargal Quinn (Independent)

How many Australians does it take to change a lamp bulb? The answer, according to the newspaper today, is every one of them. Yesterday, the Australians announced that the traditional lamp bulb, which has been used throughout the world for more than 125 years, will be outlawed in favour of the more effective and energy efficient lamp bulbs currently available. The traditional lamp bulb apparently wastes 90% of the energy it uses. The new lamp bulbs are more expensive but are far more efficient. Given that the Minister, Deputy Noel Dempsey, was responsible for introducing the plastic bag levy and received accolades from around the world for doing so, he should consider taking on board this policy.

The concept and the figures I read this morning were startling. Australia is imposing the ban in 2010 and in three years the traditional lamp bulb will be outlawed. The benefits appear to be huge. I mention this because previous speakers have referred not only to energy regulation but also to the challenges, threats and opportunities facing us with regard to carbon emissions and the Kyoto agreement. There is little doubt that the way we use energy and electricity will influence our way of life and our ability to maintain our traditional way of life in the years ahead.

I have no difficulty welcoming this Bill. On an island of this size, there are obvious economies of scale that can be gained by operating one electricity market rather than two. To put this in perspective, even the single market catering for the whole island of Ireland will be always a small market by European standards. That is why, in the long run, we must look beyond the confines of this island in organising our electricity supplies and think not just on an all-island basis but also from a regional perspective.

My reservations about the Bill are fundamental. I am concerned as to whether we have got the regulation of energy right. The present system of regulation, put in place largely at the behest of the EU, consistently acts against the interests of the customer and, by doing so, puts several important national interests at risk. The driving force behind the regulatory process is the creation of a competitive and profitable marketplace at any cost, even if that works against the interests of the customers in that marketplace. If that is the case, it is a crazy situation and one that should not continue.

From a customer's point of view, there are two main priorities with regard to energy. The first is guarantee of supply, that when one turns the switch, a light actually comes on. In the past 20 years we in Ireland have come to assume this will always happen. In some other countries, hotels supply a candle beside a bed because of a lack of guarantee of supply. A national electricity market needs, therefore, to be organised so that the available generating capacity always keeps ahead of peak demand, with a suitable level of reserve constantly available. Traditionally, Ireland has always had that guarantee of supply. It is ironic that in recent years, since this regulatory system was put in place, the issue of security of supply has raised its head. The regulator's first priority, before everything else, should be to provide an assured supply of electricity.

The second important issue to the customer is the price paid for energy. Naturally, people want to get their electricity as cheaply as possible. In many ways, it is a grudge purchase. From the national point of view, however, it is even more important that energy prices are kept to an absolute minimum.

There are two reasons for this, both of which bear on national competitiveness, an issue I have raised in the House on many occasions. Energy costs flow directly into the cost of living, so any increases are directly and immediately reflected in our inflation figures. When the rate of inflation rises, the cost of all items we buy rises as the multiplier effect kicks into action. That is bad for businesses that must compete on international markets. It is made worse when these businesses are also hit directly by increases in their energy costs. It is nationally important to keep electricity prices low. A sharp increase in electricity prices, such as those the regulator sanctioned in the latter part of 2006, can have a severe impact on our ability to compete as a trading nation in markets around the world. That should give us reason to pause. If we are concerned about national competitiveness, as I believe we should be, we must attach a high priority to containing our energy costs to the maximum extent possible. However, that priority, regardless of whether it is shared by the Government, certainly does not seem to be shared by the energy regulator.

The Minister will recall what happened last September. On the basis of what turned out to be a temporary peak in the price of oil, the regulator made the erroneous assumption that oil prices would remain at that peak level for the whole of the following year. He therefore sanctioned increases in the price of electricity to cover that assumption. This was a truly disastrous mistake and only partly undone.

The current price of electricity is still too high. If we need proof of that, we only have to look at the spectacle of the ESB paying the Government a dividend of €350 million from its excess profits. The ESB has no business paying the Government a dividend at all. It should make no more profits than are necessary to invest in its business and provide for its growth. The €350 million, which disappeared into the maw of the Department of Finance never to be heard of again, is money from electricity customers that should never have been taken from them in the first place.

This is not small change. It amounts to €300 for every household. A figure such as €350 million is hard to understand. It is easier to understand a figure of €300 for every household, a significant part of each one's total annual electricity bill. It is not just about robbing €300 from each family, serious as that is in itself. Robbing each family of this amount just adds to the cost of living and to the spiral of inflation, delivering another body blow to our national competitiveness.

We are the envy of the world in how we have transformed the economy since 1987. Last year I was asked to give several speeches on the Celtic tiger success story in Latin America. I stated there are several reasons but one is our ability to compete. We recognised national competitiveness was important and kept costs low. We are in danger of letting this slip from our minds.

Is our system of energy regulation part of the solution or part of the problem? Our experience so far would lend credence to the theory that it has become part of the problem. A basic question must be addressed. If we fail to address it, we do so at our peril. Have we got our energy regulation right or have we gone astray? If we have gone astray, as I believe there is at least a risk that we have, then it is incumbent on us to acknowledge that fact and take remedial action. If we do not, we will be laying up problems for the future that will become increasingly difficult to resolve as time goes on.

While I support the Bill, I have some concerns about it. We have led the world in other areas. Ireland, for example, is admired around the world for its plastic bag environmental levy, which the Minister, Deputy Noel Dempsey, introduced. However, we cannot be afraid to challenge our traditional thinking in energy generation and regulation.