Thursday April 21 2011
CONSUMERS should enjoy lower prices if Bord Gais and ESB's energy-supply wings are privatised -- but there are no guarantees.
All households would become customers of private gas and electricity companies if the recommendations of the McCarthy report were adopted.
Meanwhile, the State would retain ownership of the transmission grid.
The impact on prices of privatising the two suppliers should be positive because of efficiencies, such as cheaper staffing costs. However, industry experts say it is difficult to gauge at this early stage.
A high level of competition already exists in the energy market, given the huge switching rates seen for gas and electricity in the last two years.
Simon Moynihan of the price-comparison website bonkers.ie said: "We now have a fully deregulated electricity market and private-sector efficiencies may even help keep prices down for consumers."
In general, the international experience of selling off major state monopolies -- such as the sale of British Gas 25 years ago -- had a positive impact on prices, although it did result in a bewildering array of tariffs for customers.
The Commission for Energy Regulation has said it will study the McCarthy report in detail before commenting.
The report advocates transferring the electricity transmission grid, including the Northern Ireland system, to EirGrid and retaining it in public ownership as a regulated monopoly.
ESB would need to sell off some of its power plants. Its energy-supply business, distribution, international investment and engineering businesses would also be sold off as a single entity.
For gas, the report calls for the transmission and interconnector assets of Bord Gais to remain in state ownership, with the option of merging them with EirGrid.
The remaining operations of Bord Gais, including its customer-supply business, would then be privatised as a single entity.