Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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109. To ask the Minister for Communications, Climate Action and Environment his views on the special interim dividend mentioned in Parliamentary Questions (details supplied); if he will detail the mechanism through which the payments were made to large energy users; what the total value was for the dividend paid to the LEUs; and if he will make a statement on the matter. [25444/23]

Eamon Ryan (Dublin Bay South, Green Party)
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In 2009, the Government approved the taking of a special dividend from ESB and the then Commission for Energy Regulation (CER), now the Commission for Regulation of Utilities (CRU), was tasked with implementing this decision through the mechanism of the network tariffs.

It is important to note that the CRU was established as an independent statutory regulator by the Electricity Regulation Act 1999 and its functions and powers were extended under the Gas (Interim) (Regulation) Act 2002 and the Water Services (No.2), Act 2013.

The CRU is legally independent in the performance of its functions and is entirely accountable to the Oireachtas for such performance. It is funded by means of a levy on electricity and gas undertakings and income from licensing fees.

Following the 2009 Government Decision, the CRU, then the Commission for Energy Regulation (CER), published Information Note CER/09/117, which is attached for reference. This note outlines the CER decision to continue the rebate scheme set out in Information Note CER/09/002, also attached, for all LEUs to ensure they did not face any rise in their network tariffs.

The following extract is taken from the CER Information Note CER/09/002, which sets out the details of the rebate mechanism.

"PSO Related Rebate

Monies from the sale of some ESB power stations under the CER-ESB Asset Strategy agreement will be rebated to all customers. Some of these generation stations received support through the Public Service Obligation (PSO) mechanism and following their sale a rebate can be given to all electricity customers in 2009...

While the above contributions have offset price increases for ESB Customer Supply customers, they also benefit customers of all Independent Suppliers. Both rebates will be passed from ESB through the networks companies, EirGrid and ESB Networks Ltd. to suppliers who will distribute them to their customers."

This rebate mechanism was continued for the 2009/2010 tariff year, as outlined in the CER Information Note CER/09/117.

The following extract from CER Information Note CER/09/117 outlines the value of the rebate scheme for LEUs. The CER determined this as a targeted response to the industrial competitiveness concerns arising during the economic circumstances that pertained in 2009.

"The Government have stated their continuing concern about the impact of energy prices on Large Energy Users (LEUs), who contribute so substantially to employment and are particularly affected by electricity prices. It has therefore been decided that there will be a continuation of the rebate scheme for LEUs.

This should ensure that LEUs do not face any rise in their network tariffs from October 2009. The rebate will comprise: 1.5003 cent/kWh and €8.63/kVA per annum for the period 1st October 2009 to 30th September 2010."

The amounts received depended on the energy consumed by each LEU in that period, and the rebates were passed through the network companies, EirGrid and ESB Networks Ltd.

The Commission for Regulation of Utilities (CRU), which has full independent responsibility to regulate network charges, provides a dedicated email address for Oireachtas members. This enables members to raise questions directly to the regulator for timely reply.

If further clarification is required on the above, please contact oireachtas@cru.ie.

Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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110. To ask the Minister for Communications, Climate Action and Environment his views on the special interim dividend mentioned in Parliamentary Questions (details supplied); if the payments were subject to the revised estimate process; if not, what parliamentary scrutiny and oversight there was of these payments; and if he will make a statement on the matter. [25445/23]

Eamon Ryan (Dublin Bay South, Green Party)
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Dividends are not voted expenditure and so do not fall within the Estimates process.

Formal dividend policies are in place for all of the commercial state bodies operating in the energy sector. These have been developed via the Shareholder Expectations Framework and, in each case, seek to strike an appropriate balance between the payment of dividends and re-investment in the business.

Where the dividend target is based on adjusted profits after tax, higher profits arising in any given year in the ordinary course would fall within the scope of the normal targeted dividend payments.

The Electricity (Supply) (Amendment) Act 2001, repealed ESB's break-even mandate which had existed since 1927. This, in essence, means that the ESB may declare and pay dividends in a manner akin to a commercial public limited company.

Section 7 of the Electricity Supply Amendment Act 2001 states the following -

Payment of dividend into Exchequer.

7.—All amounts representing dividends or other money received by the Minister for Finance in respect of capital stock held by him or her shall be paid into or disposed of for the benefit of the Exchequer in such manner as he or she may direct.

The sale of power stations at Tarbert, Great Island, Rhode, Tawnaghmore and two other sites at Lanesboro and Shannonbridge to Endesa S.A. was completed in January 2009 for €440 million and resulted in a net profit on disposal of €265 million.

The disposal of these assets is in accordance with the terms of an agreement with the then Commission for Energy Regulation (CER), now the Commission for Regulation of Utilities (CRU), to reduce ESB’s market share in the Irish power generation market to a maximum of 40% by 2010.

A Government Decision of 15 July 2009 approved the taking of a proportion of this exceptional profit as a special dividend of €176 million to the Exchequer to ensure National Large Energy Users (LEUs) faced no increase in network charges in 2009/10 in line with Enterprise policy.