Board to raise ESB break-up plan with Minister

ESB directors will raise concerns about the commercial impact of Government plans to break up the State electricity company with Minister for Communications, Marine and Natural Resources Noel Dempsey.

The company's board discussed the Government's white paper on energy, published by Mr Dempsey last month, at a meeting yesterday.

Following the discussion, it released a statement saying it will seek further information "clarifying how some of the proposed new arrangements might influence the value and commercial viability of ESB".

The paper proposes transferring the national grid, which transmits electricity from generating stations to the distribution network, from the ESB's ownership to Eirgrid, another State body, which currently manages the system, but does not own it.

The move would mean that the ESB will lose an asset worth about €1 billion. It is understood board members are concerned about approving the transfer in light of the fact that they are obliged to ensure that the ESB gets fair value for any property or assets it disposes of.

The ESB will not be paid or compensated for the transfer of the national grid to Eirgrid. However, Mr Dempsey's department has already said that the transfer will not result in the State company being materially worse off.

The paper proposes that the national grid's debts will transfer with it, relieving the ESB of the obligation to repay them. The company has total debts of €1 billion. It spent a high proportion of that money on redeveloping the national grid.

A department spokeswoman said yesterday that Mr Dempsey welcomed the board's statement and said that his "door is open" to the board.

Meanwhile, economist Colm McCarthy of University College Dublin told the Engineers Ireland conference in Dublin yesterday that the Government's attempts at liberalising the electricity market had been half-hearted and resulted in an unmanageable system.

He advocated the complete break up of the ESB as the only solution to the current problem.