DOMESTIC AND business electricity customers are likely to foot the bill for €150 million in cost overruns for upgrading the network because, the energy regulator said, these are outside anyone’s control.
The Commission for Energy Regulation said yesterday it believed the overruns were “allowable” because they were caused by factors beyond the control of Eirgrid and ESB Networks.
A spokesman for the commission said both companies had suffered significant delays due to land access problems, as reported in yesterday’s Irish Times.
He said the cost of materials used in transmission projects had risen significantly over the past five years – aluminium by 50 per cent and copper by 100 per cent.
“Such increases could not have been anticipated by Eirgrid or ESB Networks in 2006. They are outside their – and Ireland’s – control,” he said.
The commission’s view was that because the costs had been “efficiently incurred” taking account of the land issues, the overrun was acceptable. When savings in other areas are taken into account, ESB Network’s net overspending was €80 million.
The commission will make a final decision on costs for the next five years with the next month.
Asked about a €201 million deficit in the company’s pension fund, the spokesman said the ESB was in discussion with its unions and proposals had been made to staff. The commission “does not envisage a burden for electricity customers on this matter”.
Fine Gael energy spokesman Leo Varadkar said: “Customers who will see higher bills coming through their door in a matter of weeks will rightly be furious at hundreds of millions more being spent than were budgeted”.