Employers' group wants ESB cost rise to be phased for industry

The employers' group IBEC will seek to have an impending ESB price rise introduced on a phased basis for industry when it meets the Commissioner for Electricity Regulation this week.

The group expressed concern at reports in weekend newspapers that the latest increase, due to be announced in September, could average 15 per cent. This would come on top of last year's price rise of 9 per cent.

IBEC's director of enterprise, Mr Brendan Butler, said employers had suffered "a whole range of cost increases" in the past 12 to 18 months, especially in insurance and energy, and had no chance of offsetting these costs with price rises.

This was now "one of the most challenging periods" business had faced, he added.

"It's getting to the stage where you have to ask how many more hits people can take."

Mr Butler said the ESB could not be criticised for seeking the increases which it considered necessary.

But he added that in its latest meeting with the regulator, IBEC would be pressing for a gradual "ramping up" of prices, to allow industry time to react.

This would be in contrast to the "galling" experience of last year when the increase took effect almost immediately.

IBEC would also be looking for an end to cross-subsidisation of domestic bills by commercial customers, Mr Butler said, adding that for some of industry's heaviest users of electricity, last year's increase had been 19 per cent.

"It's unacceptable to have a two-tier system where one part of society is paying the full whack and another isn't."

The electricity regulator, Mr Tom Reeves, began a review of prices in January and is scheduled to announce details of the latest increase in September, to be implemented in October or November.

According to a report in the Sunday Business Post, the increase will average 15 per cent, pushing the typical two-monthly domestic bill up by €13.46, to €103.23.

The newspaper quoted computer software manufacturers Intel as being seriously concerned about such a price rise coming on top of other increases in everything from VHI to construction costs.

It said the company's public affairs manager had warned that "costs are all going in the wrong direction".

The ESB declined to comment on the report, except to say that the company was "involved with the regulator in a process" of revising electricity prices.

But a spokesman said there would be no repeat of last year's experience, where the increase with immediate effect caused problems even for the company's own billing system.

On the issue of two-tier billing, he added that the ESB's concern to introduce "reflective" pricing - pricing that reflects the full cost of production and delivery - to all users, was balanced by practical considerations.

"You can't have somebody in Kerry paying more because the power has to travel further to them," he said.