EirGrid board may resolve row with regulator

The board of the national grid company EirGrid meets today amid speculation that it might agree to resolve a long-running dispute…

The board of the national grid company EirGrid meets today amid speculation that it might agree to resolve a long-running dispute with the energy regulator which is scheduled to reach the High Court next Tuesday.

It is not known whether the board will take any decision to settle with the regulator, Mr Tom Reeves, who initiated the High Court action after EirGrid refused to comply with a direction he issued on its separation from the ESB.

The grid operation is being established as an independent company outside the ESB. Mr Reeves intervened when the ESB and EirGrid failed to reach an infrastructure agreement on the detailed management of the system.

With the separation required to ensure the fair operation of the grid in the newly competitive market, the process has been described as akin to a divorce.

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The EirGrid board is understood to have brought forward its meeting by a week because the High Court case is scheduled to begin on October 15th.

A discussion of the case is on the agenda for the meeting today, but there were indications last night that no formal proposal was yet ready for the board.

The meeting was not seen as a deadline by a number of individuals familiar with the case.

Still, the company is thought to be under considerable pressure from the political establishment to settle the case as State entities rarely go the courts to resolve their difficulties.

With legal fees believed likely to reach €5 million if the case reaches court, the affair is seen as an unseemly turf war in State circles.

In addition, the structure of the separation sought by Mr Reeves has been effectively endorsed by the European Commission.

This was seen by many observers as a weakening of EirGrid's position.

For its part, EirGrid has stated that Mr Reeves's direction did not comply with the terms of the Statutory Instrument in 2000 which provided for its establishment.

It has argued that the direction puts forward a structure that implicitly favours the ESB.

The grid operation is unhappy that the ESB retains control over detailed planning of the network.

The ESB, which complied with the direction, is a notice party in the case.

With the regulator, the ESB and EirGrid, all funded by electricity tariffs, many observers believe it is customers who will ultimately fund the action.

The grid company's barrister, Mr Michael Collins SC, is meeting this week with the Mr Reeves's barrister, Mr Richard Nesbitt SC.

They are discussing a letter Mr Reeves sent to EirGrid last Thursday in which he outlined a number of difficulties with a proposed agreement between the grid company and the ESB.

"I think there is a process going on and I think that it is constructive," said one informed individual who used the expression "cautiously optimistic" when asked whether the a settlement was likely.

Mr Reeves is understood to have said that there was excessive provision for duplication of work by individuals employed by EirGrid to monitor the work carried by ESB staff.

Arthur Beesley

Arthur Beesley

Arthur Beesley is Current Affairs Editor of The Irish Times