Minister for Communications, Marine and Natural Resources Dermot Ahern has said he does not have the power to intervene with the electricity regulator on prices under current regulations.
But he told RTE radio he was drafting new legislation which would allow him to issue policy directions to the regulator. He said the Commission for Energy Regulation should take national competitiveness into account when considering applications for price changes. The Minister said the Government was wary of dramatic price increases and the effect they would have on the industrial and commercial sectors.
Minister Ahern was speaking after the ESB said it would apply for a significant rise in electricity prices as a result of the sharp increase in global oil and coal prices in recent months.
ESB chairman Tadhg O'Donoghue said that on the basis of oil prices alone, a double-digit increase would be required to keep the company on an even keel.
Earlier the Minister said it would be better that such a profitable company as the ESB did not look for this price rise but looked instead for efficiencies within its own organisation.
He said the increase in the price of oil was only a very short term issue and the ESB should take a more long term view.
This morning, the ESB reported after-tax profits of E249m for 2003, an increase of more than 56% on 2002. A dividend of E67m will be paid to the Exchequer.
The company said another 500 staff would leave the company under its Programme to Achieve Competitiveness and Transformation agreed with the unions.
The ESB also reported a pension deficit of E510m, but chief executive Padraig McManus said he was confident this could be overcome in consultation with staff.
The company also said a decision on its coal burning plant at Moneypoint, which needs a E250m investment to meet EU environmental requirements, was needed by the end of June.
Small business group ISME said it was 'shocked' by the ESB's move to apply for a price increase.
Chief executive Mark Fielding said the public and the business community 'should not be expected to pay for ESB deficiencies', and described the ESB's references to higher oil prices as a red herring.
Mr Fielding said ISME would be seeking assurances from Minister Dermot Ahern that there would be no further increases in electricity costs in the short-term.
