Dáil Éireann Debate, Thursday - 25 May 2023
110. Deputy Eoin Ó Broin asked the Minister for the Environment, Climate and Communications his views on the special interim dividend mentioned in Parliamentary Questions (details supplied); if the payments were subject to the revised estimate process; if not, what parliamentary scrutiny and oversight there was of these payments; and if he will make a statement on the matter. [25445/23]
View answerDividends are not voted expenditure and so do not fall within the Estimates process.
Formal dividend policies are in place for all of the commercial state bodies operating in the energy sector. These have been developed via the Shareholder Expectations Framework and, in each case, seek to strike an appropriate balance between the payment of dividends and re-investment in the business.
Where the dividend target is based on adjusted profits after tax, higher profits arising in any given year in the ordinary course would fall within the scope of the normal targeted dividend payments.
The Electricity (Supply) (Amendment) Act 2001, repealed ESB's break-even mandate which had existed since 1927. This, in essence, means that the ESB may declare and pay dividends in a manner akin to a commercial public limited company.
Section 7 of the Electricity Supply Amendment Act 2001 states the following -
Payment of dividend into Exchequer.
7.—All amounts representing dividends or other money received by the Minister for Finance in respect of capital stock held by him or her shall be paid into or disposed of for the benefit of the Exchequer in such manner as he or she may direct.
The sale of power stations at Tarbert, Great Island, Rhode, Tawnaghmore and two other sites at Lanesboro and Shannonbridge to Endesa S.A. was completed in January 2009 for €440 million and resulted in a net profit on disposal of €265 million.
The disposal of these assets is in accordance with the terms of an agreement with the then Commission for Energy Regulation (CER), now the Commission for Regulation of Utilities (CRU), to reduce ESB’s market share in the Irish power generation market to a maximum of 40% by 2010.
A Government Decision of 15 July 2009 approved the taking of a proportion of this exceptional profit as a special dividend of €176 million to the Exchequer to ensure National Large Energy Users (LEUs) faced no increase in network charges in 2009/10 in line with Enterprise policy.
