The ESB has confirmed it expects electricity prices to rise by between 10 and 20 per cent next year due to escalating fuel cost, particularly for gas and oil. Emmet Oliver reports
It is likely that households will face increases at the lower end of the scale, while major corporate customers of the ESB will face bigger increases.
A final decision will be made in September by the energy regulator, but ESB chairman Tadhg O'Donoghue said he anticipated a figure of 10- 20 per cent.
Asked was this the correct range, he replied: "I think you are talking in that box, yes".
He said the ESB was better positioned than most because it was able to balance rising costs across its four fuel groups - oil, gas, peat and coal.
A number of the ESB's rivals who relied heavily on gas were pushing the regulator for price increases he said.
"ESB would certainly not want 20 per cent, but we are not the only player in the market. If you are gas only or oil only, you are going to be pushing the regulator for the highest price you can get. You can't have a separate price for each generator."
He said those relying solely on gas would need a 40 per cent increase.
Mr O'Donoghue was speaking as the company announced its annual results for 2005. They showed turnover rising from €2.4 billion to €2.7 billion, with pretax profits up from €182 million to €240 million.
The company's group finance director Bernard Byrne said while the profit performance was healthy, it was fully appropriate for a company that scale of the ESB. A dividend of €77 million is to be paid to the Government.
He said customer connections were growing strongly and the company's debts were rising, but he said the gearing was comfortable for a utility firm and urgent capital investment had been put into its network. Mr O'Donoghue said there was a "glass ceiling" above which ESB could not borrow anymore. He said the business was only "throwing off" about €600-€700 million a year in cash and it had major commitments to meet.
A media briefing at the company's Dublin headquarters also featured several questions about ESB's future.
A green paper to be published shortly on energy is expected to address the idea of ESB's 19 power stations. Mr O'Donoghue said there was a lot of talk about selling these stations, but they were not necessarily attractive to the private sector.
"Some people tell you ESB must sell off half its power stations, the problem with that is, even if we were willing to sell, it would be difficult to find willing buyers.
"If you ask anyone prepared to invest in the industry, they will tell you they want an old clapped out ESB station like a hole in the head," he said.
ESB would no longer be offering power purchase contracts to private sector companies in future, said chief executive Padraig McManus. He said this increased ESB's market share in Ireland, when it was trying to lower its share.
