Paudie Coffey (Fine Gael)

I move:

That Seanad Éireann notes with concern:

that Ireland has the fifth highest domestic electricity prices out of 31 countries in Europe, third highest when tax is excluded, and sixth highest electricity prices for business;

that the impending PSO levy due this month will see household bills indiscriminately rise by 5% and small businesses paying €100 more on annual bills; and

that the head of IDA Ireland recently stated that Ireland needs to address competitiveness issues such as energy prices in order to grow and win more business;

and calls on Government to postpone the introduction of the PSO levy on electricity prices.

I welcome the Minister for Communications, Energy and Natural Resources, Deputy Ryan, to the House to discuss this motion, which affects every household, large business and small corner shop in the country. In a modern society, the price of electricity is one of the main facets and energies of every household and business. Everyone depends on their source of electricity. As a society, we have all become very accustomed to electricity. It is only on those rare occasions when we do not have electricity - I refer to blackouts, for example - that we truly realise the value and importance of electricity. It keeps our households lit and warm and keeps our businesses functioning and working as best they can.

I wish to explain why Fine Gael has tabled this motion. The Minister will probably give the House some very good reasons for the introduction of the PSO levy. We are concerned about the hardship and devastation that is being experienced in the current economic climate, which is unprecedented in Ireland's modern history. Many large businesses and small and medium sized enterprises are struggling to stay competitive on a daily basis. The introduction of this levy will push many of them up to the threshold, or over the threshold, so they are no longer viable. The same thing applies to domestic households. The Minister can probably give the House the relevant figures for the large increase in the number of disconnections. This issue has been played out in the media over recent weeks. ESB Networks is disconnecting domestic households even though the people in question may be in dire circumstances. It is a reflection of the substantial financial pressures they face as they try to pay their everyday bills.

I am sure Members will agree that people do not pay their electricity bills because they have little or no other option. The introduction of the PSO levy will bring a new raft of people into the category of those who are struggling to pay their bills. As far as many of them are concerned, it might be the last straw that makes them unable to afford to pay their bills and keep their electricity switched on, especially as we enter the winter period. It would represent common sense, particularly in light of last year's cold snap, one of the worst for over 100 years, for the Government to review this policy and postpone its implementation until the economy is more stable and people's homes and businesses have more secure futures. Agencies such as the IDA, ISME and other business organisations do not normally come out so strongly or state quite so categorically that the Government should postpone the increase in the public service obligation, PSO, levy on electricity prices. They are saying this because they know the people with whom they work and the members of their organisations are put to the pins of their collars to remain competitive, viable and in business.

The lifeblood of electricity is an area that has been identified in the EUROSTAT figures. It is highly worrying to note that Ireland has the fifth highest domestic and sixth highest commercial electricity prices among 31 countries in Europe and that the Minister now proposes to introduce such a levy at such an economically sensitive time for everyone. This does not show much consideration for the hardship and realities that obtain in all our communities. The Minister will argue the reasons for the original introduction of the public service obligation, namely, to secure energy supplies and competitiveness in the market and to introduce new suppliers. While that is all well and good, there is a time and a place for so doing. Were the Minister to consult the Society of St. Vincent de Paul, MABS, the Department of Social Protection or any other agencies that deal on a daily basis with people who struggle to pay their electricity bills, he would realise the great hardship that exists at present.

I acknowledge the Department of Social Protection has announced a package of €12.6 million to assist those in receipt of the electricity allowance under the household benefits package. However, it appears quite crazy that one Department must hand out such entitlements and benefits to try to cover costs imposed by another Department and a great irony exists in that regard. I always will argue the case for those whom I describe as being from middle Ireland who are working hard - those who are lucky to have jobs - but who receive no benefits. What about those people, who are put to their pins of their collars to pay their mortgages, as well as their education and medical costs? Although they pay for everything at this time in this society, this proposal constitutes another increase on the monthly bills they also will struggle to meet. The timing of this introduction must be reviewed. While I understand the reason for a public service obligation levy and the reason this area requires attention, the Fine Gael Party believes this increase should be postponed.

I must declare a slight conflict of interest as I worked for the ESB for 20 years, albeit on the network, rather than the supply end of it. I do not believe the people, the Minister or anyone else realises the frustration experienced by the electricians of ESB Networks who must cut off families' electricity supply. I worked for the ESB when it was the main supplier and even the electrician who went out to cut off supply to a house could always engage in a certain degree of negotiation with the relevant householder. Were such an electrician to receive a fiver on having been called out, he could drive the van away and not disconnect the house. However this can no longer happen because the entire market has shifted with the advent of the new suppliers, such as Airtricity, Bord Gáis and many others, including Electricity Customer Supply. Once an instruction to disconnect comes from those organisations to ESB Networks, the same electrician who went out ten years ago to cut off supply to a house but who could turn away the van without disconnecting the family concerned no longer has such a choice or discretion. This point needs to be made and it is a sad indictment of our society that hard-nosed business decisions of suppliers now come into play and that the ESB Networks technicians who are sent out to disconnect a house or business for non-payment of bills over a period now are obliged to proceed with that, even if the affected bill payer makes offers or pleas. This is a sad development in our modern society because discretion, understanding and human feeling are gone. Without the protection of organisations such as the Society of St. Vincent de Paul, and the MABS associations nationwide, people literally would be on their own.

Members will have noted a case a few weeks ago in which a man chained himself to the nearby ESB headquarters. This man genuinely was trying to address the backlog in his bills but because of the hard-nosed business attitude of suppliers, which do not appear to recognise the hardship that exists on the ground, his offer to try to pay off his backlog over a period was rejected. This is not the kind of society we need to develop as one cannot lose sight of real need, especially in a recessionary time. I remember when the ESB operated retail departments and people could buy appliances such as washing machines using their ESB bills. However, as I have told many people, those who could not qualify to have the price of their washing machine put on their ESB bills and who were struggling with their bills, qualified for mortgages shortly afterwards. This demonstrates how the ESB always had a responsible role in the manner in which it managed its customers and bills. It had the track record of not lending to those who it knew could not afford such appliances. Shortly afterwards however, banks, credit unions and other institutions lent money hand over fist to such people, who then got into difficulty and tried to repay the loans through recourse to moneylenders and others who prey on such vulnerable people.

These are the matters that must be considered before coming up with the great principles and policies of increasing the price of electricity simply to secure our energy supplies. Our energy supplies will survive and have done so since the original setting of the public service obligation levy to zero. Moreover, they will continue to survive over the next number of years because those companies and the State are strong enough to carry it. However, many of the people who will be cut off will not survive and this is the reason I have tabled this motion. It is an appeal for common sense to enter the debate to reflect the pure pain being experienced on the ground at present during the current recession.

On the subject of energy supply and security, some Members of this House serve on the Joint Committee on Climate Change and Energy Security and progress has been made on the main interconnector to the United Kingdom. However, I have always thought it would be better to build a second interconnector to mainland Europe to facilitate the establishment of a ring main encompassing Ireland, the United Kingdom and mainland Europe. We then could consider all the possibilities of getting highly competitive prices from mainland Europe and the United Kingdom. This would introduce the necessary competition into the markets and also would enhance security of supply because we no longer would be an island sitting out in the Atlantic Ocean but would have a ring main, similar to that which can be found in any commercial installation or household, whereby in the event of one element of the ring main being unable to provide supply, one can always divert to the other.

Moreover, there is potential in such an approach because one can also export, were we to develop some of the renewable energies about which one likes to hear. Other speakers may develop the point further to the effect that many barriers exist to the development of wind energy farms. Some that come to mind are the problems associated with offshore licensing and the lack of a long-term spatial planning strategy for wind energy. There are areas of detail that must be ironed out to introduce proper competition in the area of renewable energy. Many barriers exist to companies that are interested in investing in renewable energies, both in the planning and regulatory systems, that must be ironed out. This is how competition and security of supply should be introduced.

I conclude by noting that my former employer, the ESB, pays millions of euro in dividends back to the State. I understand that €74 million was paid a couple of years ago and the amount probably was greater this year. Surely some of these millions of euro in profit could be diverted into postponing this PSO for the reasons I outlined previously. I refer to the humane reasons that would help people who now are put to the pins of their collars to meet their weekly and monthly electricity bills.