THE national energy supplier has come under fire for agreeing to pay 4,000 staff the first 3.5pc instalment of the national pay deal.
A Fine Gael deputy described the wage deal as a "dead duck" and said the state-owned ESB could not justify the increase.
Energy spokesman Simon Coveney said he wondered if the company was "living in the real world" and suggested it should instead concentrate on reducing its costs to bring down the cost of electricity.
He said the country was "on its knees" and big state-owned employers like the ESB could not justify pay rises as the Government considered pay cuts across the public sector.
The TD was speaking after the board of the company sanctioned the first phase of the wage agreement for manual workers.
It is understood that up to 43 private sector firms have already agreed to honour the instalment of the pay deal.
"We need the ESB to be bringing forward measures that can reduce the cost of energy in Ireland, instead they are adding to the cost of producing and delivering electricity by increasing wage levels," he said.
"Everything has changed utterly since the wage deal was struck last September," he added.