8% price rise for Electricity likely

Sleipnir

This really is beginning to annoy me.
ESB appears to be now run as private company instead of a Public Utility who's sole responsibility is to provide the Irish people with electrical power.

Why is the E.S.B. being run in order to make a profit when the people who own the network (i.e. us!) are paying through the nose for it?
Why am I paying for this;

"ESB International and ESB National Grid were selected as preferred bidders for the SeTrans contract in the United States."

I don't want my electricity company to make a profit, I want it to provide me with electricity as cheaply and effeciently as possible.

In its Annual Results for 2002, ESB Group reported that:

Turnover was €2,151 million
Profit before interest and tax increased to €250 million - an increase of 26 per cent on the year previous.
Capital investment was €864 million.
ESB for the first time ever, paid a total dividend of €39.7 million -- 25 per cent of the €159 million profit after tax.

If they are making such huge profits, why are we paying 38% more than 3 years ago? So that they can increase their profits?

From unison.ie

The Irish Small and Medium Enterprises Association (ISME) has slammed an expected 8% rise in ESB prices later this year. The Commission for Energy Regulation (CER) is expected to sanction the increase from September 1st, with another increase expected at the start of next year. ISME chief executive Mark Fielding said: "This will bring to 38% the rise in ESB and electricity charges for small and medium businesses over the last three years. We were told initially that the CER was being put in place to bring in competition into the marketplace so that we would have a reduction in price for our electricity, but in fact the complete opposite has happened."

BuffyBot

I don't want my electricity company to make a profit, I want it to provide me with electricity as cheaply and effeciently as possible.

So you would rather it made a loss and was being subsidised by your taxes?

As for ESBI, it isn't cross-subsidised from ESB revenue generated from the customer AFAIK. In fact, I believe it contributes quite a bit to the ESB's purse from the work it undertakes.

Sleipnir

BuffyBot wrote:

So you would rather it made a loss and was being subsidised by your taxes?

As for ESBI, it isn't cross-subsidised from ESB revenue generated from the customer AFAIK. In fact, I believe it contributes quite a bit to the ESB's purse from the work it undertakes.

I would have thought it was clearly obvious that I would like it to break even as I don't seem to receive a dividend cheque every year, even though I am one of the 'shareholders'.
Just because I don't think it should make huge profits does that automatically
mean I think it should be making a loss? Get real.

How is the ESBI financed then? Who's money was used to even to get it started up? I only ask because at the point when the ESB broke into internation energy markets, they must have got money to back it from somewhere, right?

BuffyBot

Sleipnir wrote:

I would have thought it was clearly obvious that I would like it to break even as I don't seem to receive a dividend cheque every year, even though I am one of the 'shareholders'.

It's doing better than breaking even. It's making a profit. Profit in a semi-state is good. Your "paying through the nose" is a very relative statement unfortunately. How does the cost of electricty from the ESB compare to providers in other countries?

Just because I don't think it should make huge profits does that automatically mean I think it should be making a loss? Get real.

TBH I'm not sure what you really mean.

So where do you think the profit goes? Wild ESB staff parties or re-investment in the infrastructure..which seems more likely?

How is the ESBI financed then?

Oh, I'd say the lucrative consulting and facility management contracts would have something to do with it.

Who's money was used to even to get it started up? I only ask because at the point when the ESB broke into internation energy markets, they must have got money to back it from somewhere, right?

The people who were paying them for to undertake the consulting worl, perhaps?

Sleipnir

Cool! So I should be happy that the price of my electricity has increased 38% in 3 years when their operating costs have not increased by 38% in the same period?
You're quite happy with a 38% increase in your bill in 3 years despite 250 million in profits and despite the ESB saying that they can't afford fuel.

In 2002, ESB made €159 million profit after tax.

"ESB and its divisions are engaged in an investment of over €3.5 million over the next five years"

Investing 3.5 Million over 5 years equals about 700,000 a year

159 Million in profit in a year against investing 700,000 in a year ?

Oh, I'd say the lucrative consulting and facility management contracts would have something to do with it.

I'll ask again, where did the money come from to start off the consulting & facility management abroad?
They had to begin with some cash right? I'm asking you where that money came from.

The people who were paying them for to undertake the consulting worl, perhaps?

Do you get paid for work you haven't done yet?

Tazz T

BuffyBot wrote:

So you would rather it made a loss and was being subsidised by your taxes?

.

I don't want them making a loss, cos then they'd have to put the prices up. :rolleyes:

Massive profits shouldn't mean above inflation increases. They were allowed to increase prices to encourage competition and now they're justifying more increases on that basis. It's simple greed. This thread really belongs in Rip Off Ireland.

What ever happened to that competition anyway? Seems to me if it didn't work, they should drop the prices again. Makes sense in a messed-up-government-rationale kinda way.

mike65

The profits are possibly a by-product (not intention) of the reguators actions ie carrying out government policy to make the market more attractive to other potential power providers.
Current here was the cheapest in the old EU for years then it was decided that some market competiton would be a good idea but that no-one would enter the market with such low prices.

Which is why we've seen just a huge jump - the ESB had been seeking a higher rate for domestic users (business has been paying through the nose for years) to help re-balance the mix and for future investment. However here we are in 2004 and they're making big profits which is fine but there's still no compeition to speak of, which is not.

Mike.

Victor

Sleipnir wrote:

"ESB and its divisions are engaged in an investment of over €3.5 million over the next five years"

You don't explain where this quote is from, but the figure is €3.5 BILLION. that would be anout 20 years profit. You are now paying for the underinvestment (since Moneypoint was built) and low electricity prices.

shoegirl

Out of interest, comparing to UK prices:

Per KWh price per unit Standing Charge per Q
Equipower 7.0600 pence per kWh £0
Atlantic Electric & Gas 5.4600 pence per kWh £0
Telecom Plus 5.8600 pence per kWh £ 8.27
Powergen 6.3420 pence per kWh £ 8.04
Scottish Hydro-Electric 6.5900 pence per kWh £ 9.47
npower 13.3700 pence per kWh £0
And finally, ESB, converted into sterling to compare the rates:
ESB 8.3733 pence key KWh (12.56c) £11.24 (€16.86)

This for the cheaper urban rates, so ESB is considerably more expensive than other providers in the UK, all the above are standard tarrifs, not special ones. The standing charges is 20% to 50% more than those who have standing charges, and the electricity rate is about 20% more than all bar npower (which has no standing charge). ESB is fairly expensive and when you consider that resididential owners are a captive audience with no alternative providers, then yes, ESB is expensive.

Victor

Per KWh                        price per unit                       Standing Charge per Q
Equipower                      7.0600 pence per kWh           £0
Atlantic Electric & Gas      5.4600 pence per kWh           £0
Telecom Plus                  5.8600 pence per kWh          £ 8.27
Powergen                       6.3420 pence per kWh         £ 8.04
Scottish Hydro-Electric     6.5900 pence per kWh         £ 9.47
npower                          13.3700 pence per kWh        £0
And finally, ESB, converted into sterling to compare the rates:
ESB                               8.3733 pence key KWh (12.56c)  £11.24 (€16.86)

Where do these figures come from?

ChipZilla

According to this report from 2002 (The most recent I could find) Irish prices weren't that bad in a European sense:



Belgium, Denmark, Germany, Luxembourg, The Netherlands and Switzerland were all more expensive in Band 1 (Less than 2MWh). Work out the other bands yourselves...