Paul Kehoe (Wexford, Fine Gael)
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Question 423: To ask the Minister for Communications, Energy and Natural Resources the steps he has taken to reduce the cost of electricity here; the timescale in place that will see a reduction in price; and if he will make a statement on the matter. [5749/09]

Eamon Ryan (Dublin South, Green Party)
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The regulation of ESB customer supply electricity tariffs is the statutory responsibility of the Commission for Energy Regulation (CER) under the Electricity Regulation Act 1999.

I welcome the fact that the CER announced on 1 December 2008 that there would be no further increase in the price of gas from January 2009 and that there would be a small average decrease from that month of just less than 1% in the price of electricity supplied by ESB Customer Supply. This decision is reflective of recent easing in international fossil fuel prices, which follows a period of exponential increases in global oil, gas and coal prices. I also welcome the substantial rebate being provided by ESB to all electricity customers, irrespective of supplier, which has helped to stabilise electricity prices for 2009.

The CER is required to examine the costs underlying the regulated tariffs to ensure they are cost reflective. However, I believe that we can lower energy costs to consumers in a non-distortionary fashion, through an expedited review of tariffs. To achieve this, I have asked the energy regulator to undertake an immediate review of options to bring forward a reduction in electricity prices. I expect this review to be completed by the end of this month. As I have previously stated, if current trends in energy prices particularly gas, continue, I would expect a double-digit cut in electricity and gas prices to become a reality later this year.

I would stress that the large commercial sector, which covers approximately 35% of the electricity market by volume, is not subject to price regulation. In this sector there is competition among the various independent suppliers. I understand that depending on the contracts in place in this sector, the benefits of reductions in the cost of gas can be passed on quickly to customers and that many of these large commercial customers are already benefitting from substantial reductions in electricity prices.

Encouraging a competitive energy supply is a key policy objective for the Government. Rising energy costs are a major concern for all sectors of the economy and for consumers. It is a major concern for the European Union and globally. In this context, I welcome Sustainable Energy Ireland's report on Understanding Electricity and Gas Prices in Ireland, published in September 2008, which provides a valuable insight into the drivers of higher energy costs in our market. In particular, it underlines the imperative to reduce Ireland's dependence on imported fossil fuels and our exposure to volatile international market prices for these commodities.

The Government's Energy Policy Framework and the Programme for Government set out the actions being taken to deliver security, sustainability and competitiveness of energy supply. We must use energy far more efficiently, deliver on our ambitious renewable targets and progress vital strategic energy infrastructure such as the East West Electricity Interconnector. Initiatives in all these areas are being progressed.