ESB pays wage hike to workers

GenericUser

lemon123 wrote: »

educate yourselves boys and girls. the price of electricity is set by the industry regulator and not the ESB. ESB has only 40% of the market and the price is kept high to keep the competitors happy. If ESB dropped their wages by 50% it would make no difference to anyones ESB bill. Another example of how deregulation doesn't work. Eircom, CIE - markets don't work. When will we learn.

ESB has only 40% of the power generation market.
ESB customer supply has almost all of the domestic energy supply market.
ESB and ESB Independent Energy have about half the non residential energy supply market.

The issue here is residential energy supply.
Which ESB have a stranglehold on.
As I have said earlier in this thread, energy is traded wholesale on a market competitively. Energy is supplied to this market, by ESB (40%) and a load of independent generators (the other 60%). The average price recently is 7 cent per unit (wholesale). it was about 8/9 cent last year when fuel prices were higher.
This is a competitive price given the fuels used to generate electricity in ireland (Gas 65%, oil 10-15%, peat 5% ). Wholesale prices in ireland are difficult to compare internationally as our fuel mix is largely dependant on fossil fuels.
Most other european countries have large amounts of nuclear energy.

And the domestic consumer is paying 16-17 cent a unit.

To say that the regulator has kept energy prices high to encourage Independant companies into the market is a myth. I'm suprised it hasnt made an appearance on snopes yet.

The simple reason why there isnt competetion in the domestic energy supply market is that it costs alot to enter / service that market, and there isnt a huge amount of profit to be made from it.
New entrants to the market have no choice but to use ESB's infrastructure. Why? Because the investment needed to build, run and maintain another electricity distribution system would be far in excess of any profits to be made from the running of such a system (even with 'high' regulated prices).
So those potential new entrants would have to pay a fee (say 3-4 cent a unit) to ESB for use of system. Add that to the cost per unit of energy and you are approaching 10 or 11 cent per unit. Then add in the new entrants operating costs of say 2 cent per unit. Add in two cent profit and whats the cost? 15 cent which isn't too far from what ESB charge.

Bord gais are coming in soon. It makes sense for them to come into the market as they already have a country wide on the ground presence and they have the (business) systems and processes in place to handle a large amount of customers using small amounts of electricity.
They have pledged to undercut esb by 10%.

Long story short?

• there isnt much potential for competition in domestic energy supply due to the small size of the irish market and the large cost of infrastructural investment
• Prices really arent going to drop much below 15 cent a unit due to the fuels used to generate our electricity, and the reasons given in the point above.
• What to do? cut back on your electricity usage - Its a change the whole world will have to make very soon.

taung

The CEO of the ESB, Padraig McManus, was interviewed on RTE last Monday night. He duly came up with the following lines regard the ESB pay increase;


1. ESB is a signatory to the "Towards 2016" National Pay Agreement
2. ESB is treated as private sector company within this agreement.
3. ESB is a profitable company.
4. Therefore, ESB paid the 3.5% pay increase.

However, what he failed to say was that the same National Pay Agreement providies for the following;

The implementation of this Transitional Agreement at enterprise or industry level will take full account of the implications for competitiveness and employment and of the need for flexibility and change, compatible with modern organisation, design, efficiency and business processes. It will also take account of the need to develop a first class work environment which facilitates employee advancement, improves job security, promotes equal opportunities, increases training, productivity, flexibility and good working conditions which benefits everyone involved in the work process. In the current period of economic uncertainty, it is accepted that some employers are experiencing particular competitive difficulties in addressing market challenges and global competition.

and

An employer may claim that it is not possible to pay the terms of the Transitional Agreement in full or in part and / or may seek some cost offsetting measures or may claim inability to pay the terms of the Transitional Agreement in circumstances where this would result in serious loss of competitiveness and employment.

and

The parties are agreed on the critical importance of tackling inflation and ensuring that inflation rates are maintained at or below the Eurozone average in order to secure jobs and protect living standards. Public policy, both at central and local Government level, and the actions of employers and trade unions, will be framed with this inflation target in mind and its progressive achievement over the period of this Transitional Agreement. The parties also agree to demonstrate their strong commitment to achieving this goal by promoting and communicating it in order to influence the behaviour of business, consumers and employees in moving towards lower inflation.

On any of these grounds the ESB management could quite easily have argued that it was not going to pay the increases.

The ESB unions have the ESB management wrapped around their little fingers. :mad:

Is Áine Lawler docile, or what? :mad: :mad: :mad:

ytpe2r5bxkn0c1

It's amazing what people read into an agreement to suit their own needs. You read this from a macro level but it's references are taken to be implications to the particular firms/industries paying the wage deal, not how their payments would affect other unrelated firms. These clauses have been well tested in previous agreements e.g. Eircom's attempt to not pay on the last deal fell apart in court when these identical clauses were cited and debated.
"The Unions" (you obviously don't believe in them) negoiated this deal as a member of ICTU with the Government IBEC and Co. It was not a solo ESB deal and you seem to think only ESB has paid the 3.5% when at this stage 58 companies have paid it; with more due between now and May when the previous packages expire (taking the pay pause into consideration).

taung

Olive Unsightly Senior wrote: »

It's amazing what people read into an agreement to suit their own needs. You read this from a macro level but it's references are taken to be implications to the particular firms/industries paying the wage deal, not how their payments would affect other unrelated firms. These clauses have been well tested in previous agreements e.g. Eircom's attempt to not pay on the last deal fell apart in court when these identical clauses were cited and debated.
"The Unions" (you obviously don't believe in them) negoiated this deal as a member of ICTU with the Government IBEC and Co. It was not a solo ESB deal and you seem to think only ESB has paid the 3.5% when at this stage 58 companies have paid it; with more due between now and May when the previous packages expire (taking the pay pause into consideration).

OK, why does the ESB now think it can get away with not paying the additional increases due under the agreement?

What parts of the agreement will the ESB be quoting to the Labour Court?

ytpe2r5bxkn0c1

taung wrote: »

OK, why does the ESB now think it can get away with not paying the additional increases due under the agreement?

What parts of the agreement will the ESB be quoting to the Labour Court?

The managers have agreed to forego pay increases and take a pay cut and the CEO has asked the Unions to consider a Pay Freeze. The "they" in the article who will receive no pay rises for 2 years are the managers, and that is by agreement. ESB has no intentions of trying to force the pay freeze as they can't do so legally. Or more precisely they can try to force a pay freeze only after the final payment of the existing agreement. Any immeditae pay freeze will be a voluntary one. We'll wait and see what happens. Personally I think it's a properly negiated pay deal which employers in the public sector should pay where they are able.

ejmaztec

I'm having a party today as the ESB has just notified me that there's a O.8% average decrease in regulated electricity prices from 1st January 2009.

Let me crack open another bottle of Bolly. Whoopie!