Sir, - With regard to recent correspondence on IBEC's position on government proposal to introduce competition in the electricity supply industry, I would like to take this opportunity to restate the confederation's concerns on this important matter.
IBEC has consistently called for the introduction of competition in the Irish electricity market. Following agreement on a European Union directive on electricity liberalisation, the then Department of Transport, Energy and Communications published proposals in May for restructuring the electricity supply industry. IBEC retained the international electricity experts London Economics to advise of the likely impact of these proposals on business users and in particular whether they would result in adequate competition in the power supply market.
The consultants concluded that the proposals were fundamentally flawed as they would put new power generators off entering the Irish market, thus resulting in very limited competition and possible price rises. This is due to the hybrid nature of the model proposed in the consultation paper which proposes both a competitive market arrangement and a centrally planned system, as well as a substantial regulatory risk.
In conclusion, IBEC regards the introduction of competition in the electricity market as a critical opportunity to improve the competitiveness of Irish industry. However, it is critical that the model chosen will result in real competition in the sector and price reductions for business users. - Yours, etc., From Rosemary Steen, Assistant Director, Trade and Industry Affairs, IBEC, Dublin 2