Charlie Weston: ESB customers at end of queue as staff and State cream off profit
Generosity towards its customers is in short supply in the head office in Dublin of the ESB. The semi-State company will not give a commitment to its customers that their energy prices will fall this year.
This is despite profits at its Electric Ireland retail arm soaring 63pc to €72m last year. ESB group finance director Pat Fenlon claimed it was "too early" to say what will happen to energy costs in coming months.
He was referring to the fact that wholesale price of gas has edged up since the start of the year. Gas is used by the ESB to generate electricity.
ESB said its Electric Ireland unit - which supplies electricity and gas to 1.4 million residential and business customers - made a €72m operating profit last year, compared with €44m in 2015.
Its annual report notes that the surge in profits was "primarily driven" by lower energy costs in 2016.
Electric Ireland states that it cut standard electricity unit prices for residential customers by 6pc from June 1 last year, resulting in an average saving of €58 per customers. Gas prices fell by 5pc from October 1, resulting in an average annual saving of €39 for residential customers.
The ESB has already denied that it manipulates its network and supply costs to avoid making more cuts to the retail cost of energy.
Last month, the energy regulator launched a probe into electricity and gas prices in Ireland, questioning if suppliers may be manipulating costs to keep consumer prices high.
Energy Regulation Commissioner Aoife MacEvilly said that while retail costs for consumers had fallen in recent years, the pace of declines had not matched the fall in wholesale energy prices for gas and oil.
Staff costs are high in the ESB. The 7,597 employees had an average wage of €67,000 last year. This excludes overtime, expenses and pension contributions.
When the expenses and overtime are added in the average remuneration comes close to €75,000, and that does not include €45.3m contributed to employee pensions.
Then there is the huge dividends being paid to the State from the ESB. It paid a total dividend of €116m to the Exchequer last year.
Don't forget that valued added tax (Vat) on electricity and gas bills is charged at 13.5pc.
So the ESB makes a big profit on its Electric Ireland retail arm. The semi-State company pays its staff generously, it hands over a hefty dividend to the Government, and the Exchequer hits consumers with a bumper VAT bill.
No wonder there is no room for price cuts. The consumer is hardly in the reckoning, as others busy themselves taking the cream off the top of the ESB.
Sunday Indo Business