Irish consumers are paying the second highest electricity bill in Europe, second only to Germany. The cost to the average household is an extra €350 a year.
Yet Ireland once provided the cheapest electricity for the domestic users. This was when the ESB operated on a not-for-profit basis.
Fianna Fáil, however, embraced the Thatcherite dogma of ‘deregulation’ and blindly followed EU directive to liberalise the market.
In 1996, the EU issued a directive to ‘unbundle’ electricity. This meant breaking up the state-owned electricity entities into different companies for producing, transmitting, and supplying electricity. It was supposed to lead to more competition. But in a small country like Ireland, it was a particular disaster.
Then the Electricity (Supply) (Amendment) Act 2001 radically changed the mandate and remit of the ESB to a for-profit mandate.
It was claimed that competition would lead to cheaper prices. But the exact opposite has occurred.
Despite Ireland having a lower tax on energy, we end up with the dearest cost. The plain reality is that creating multiple companies that supply electricity on a small island has added to the costs. Once the need to create profit and dividends emerged, it was inevitable that prices would rise.
In addition, consumers directly subsidise private companies by paying a Public Service Obligation levy.
Rather than one-off electricity credits, we need to return the ESB to a not-for profit mandate to reduce the cost of living.
The cost of living crisis is far from over. This is precisely why People Before Profit introduced a Bill to cap electricity prices at 25c per kilowatt hour. People should not have to choose between energy for their homes and feeding their kids.