As energy bills surge, ESB’s legacy requires a fresh focus on its customers
It won’t be terribly reassuring for householders to hear the ESB chief executive say he was conscious this is a tough time for customers and that it is difficult to be talking about profits at a time when electricity prices remain high.
That’s an understatement. It is galling for the public to see their own bills rising catastrophically high, putting a massive strain on family finances, while the State-owned energy company is raking in huge profits.
As the biggest player, the ESB has a massive influence over the market and the prices being charged by suppliers. Smaller players can attempt to shift customers by reducing their prices, but their small share of the market means they won’t have a significant impact.
Where the ESB goes, the rest have to follow. The ESB can point to the success of its ventures abroad and various commercial operations outside of Ireland. What the consumer here needs it to do is lead the line at home, be the core provider of energy at an affordable rate for the plain people of Ireland.
The ESB is all in favour of playing the sentiment card by saying it is proud of its legacy.
“In 1927, ESB took a first bold step creating a brighter future for all. Now we’re leading the way to a clean-energy future, powered by electricity,” the semi-state company’s ads say.
The late 1920s date is a reference to the construction of the dam and power plant at Ardnacrusha in Co Clare, otherwise known as the Shannon hydroelectric scheme, which gave birth to the Electricity Supply Board.
The engineering feat by a team of Irish and German engineers was ground-breaking, historic and transformational.
In the early days of the Irish State, a massive 25pc of the GDP of the nation was put into this project to modernise the country. Looking back on the last century since independence, Ardnacrusha is one of the key moments.
If the ESB is truly conscious of its heritage, then it needs to get back to basics of generating power, ensuring it is reliable and making it affordable.
The ESB will argue that, under competition rules, the parent company is not allowed to use the profitability in other parts of the business to reduce prices for electricity bills. The company claims the enormous profits are coming from other elements of the business and that it has already passed on a discount to its customers.
The dividend now being handed over to the Government is something of a Trojan horse because it will be used by opponents to point out how much profits are being generated by energy firms at the same time as bills are rising. The Coalition needs to explain fast that these funds are being pumped back into the energy subsidy.
The ESB though can also expect a greater level of scrutiny and significant pushback if it attempts to push any more price hikes on its customers or even fail to reduce the existing over-the-top high rates. As it approaches its own centenary, the ESB’s image is not being viewed favourably.