Anyone notice this little piece of propaganda from the ESB in the past week. According to this article here in the Irish Times, ESB chairman Tadhg O’Donoghue is bemoaning the fact that the Irish Energy Regulator (CER) sets a price for electricity rather than setting a maximum price. This, according to Mr.O’Donoghue is preventing the ESB from reducing it’s costs now, and making them wait for the CER to reduce the prices later this year.
Firstly and by way of diversion, why the hell does the CER need to wait until later this year to reduce the price of electricity? If this was the government we were waiting to make such a decision we’d all be up in arms, and the governments defence would be that it’s busy doing other things. But why must we wait for the CER – all it’s there to do is raise (mostly) or decrease (rarely) our ESB and Gas prices. Why can’t they meet tomorrow and reduce the prices?
However, my main thoughts on the above article were how interesting it was to see the ESB actually being on the side of consumers in wanting lower prices. If you were to read most coverage of those comments, you’d see no dissenting voice and presume that we, the hard pressed consumers of electricity, now had a great new ally, and that the big bad “man” was actually the CER rather than the ESB.
I certain didn’t believe for a moment that that was the case. What is more likely is that by allowing a maximum price to be set by the CER, the ESB would use that as an opportunity whenever any new market entrant decides to enter the Irish electricity market to lower prices to make it harder for that new entrant to compete on a level playing field when it came to price. So, while the initial lower prices would be of benefit to consumer, in the longer term, such maximum pricing would be to the detriment of electricity supply competition and ultimately detrimental to the pockets of electricity consumers.
It was interesting to see that pretty much all coverage of this statement from the ESB chairman didn’t look at the longer term issues at all. Most commentators seemed to be blinded by the short term gain – obviously what Mr. O’Donogue would have been hoping for. It’s left for Arthur Beesley in todays Irish Times (hidden away on the normally quiet Finance pages) to draw our attention to the bluff being orchestrated by the ESB. Read his excellent article here.