Once-off energy price cut not close to being enough, dire need for regulatory change - Coveney

Fine Gael National Press Office Press Statement
Leinster House Contact Simon Coveney TD
Dublin 2 Mike Miley Communications, Energy
Ireland (01) 618 4254 / 086 3811203 & Natural Resources

Tuesday March 3rd 2009

Once-off energy price cut not close to being enough, dire need for
regulatory change - Coveney

Proper price competition can deliver more significant price reductions than
the Minister's announcement today

The once off energy price reduction announced today (Tuesday) is welcome but does not even come close to tackling the issue of high prices as fundamental reform of the regulatory system is urgently needed, Fine Gael Energy Spokesman, Simon Coveney TD has said.

"Today's announcement of a 10% cut in energy prices is proof, as if proof were needed, that the regulated electricity price in Ireland has been far too high. While any price reduction is of course welcome what is needed now is a fundamental change in the way energy prices are regulated.

"It is no longer appropriate to set ESB domestic prices for a 12 month period. Instead we should now open up energy supply to full price competition. This will allow the ESB to aggressively compete with Bord Gais, Airtricity and any other electricity supplier wanting to enter the domestic electricity supply business and will ensure the lowest possible prices.

"The current regulatory model was set up to encourage new entrants in to the energy generation and supply business. We now have competition from a number of companies and so it's time to see the benefit of that competition for consumers and businesses.

"Ironically, while the Government needs to introduce much tighter regulation in the banking sector, we need to loosen the tight regulation of prices in the energy area. This idea that we have to go though a long energy price review process to respond to market conditions is no longer appropriate for the energy market. Proper price competition can deliver far more significant price reductions than have been announced by the Minister today."

Ends

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