Hoteliers slam ‘out of touch’ energy hike proposals

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Written by Rachael Finucane

Wednesday, 19 November 2008

LIMERICK hoteliers have slammed proposed hikes in energy bills, insisting that no increases are acceptable and state monopolies are “out of tune with reality”.
Requests by the ESB and Bord Gáis to raise energy charges from January 1 were condemned as “outrageous and blatantly insulting to Irish industry in its present economic state”.
The Shannon Branch of the Irish Hotels Federation (IHF) said that seeking increases at a time of economic crisis is out of step with the reality of Ireland’s worsening economic conditions and that no increases will be acceptable to the IHF and its 1,000 members throughout the country who are seriously struggling to survive.

Speaking in advance of its submission to the Open Forum on Electricity and Natural Gas Tariffs, the IHF outlines its objections to granting such unjustifiable increases which, in 2008 alone, would see increases of 25.6% and 23.4% being granted for electricity and gas, respectively.
The federation claims these increases are having a detrimental impact on the financial viability of hoteliers and guesthouses; it is estimated that each year, the hospitality sector spends approximately €150m on energy—over 10% of operating costs of most hotels and guesthouses.
Michael Vaughan, Chairman of the IHF Shannon Branch, said “it is madness that these monopolies can simply be allowed to carry on functioning as if the current economic conditions do not exist and have no impact on their models for price increases”.
“The ESB and Bord Gáis are state owned companies and if they themselves do not do so, they should be instructed by Government, their shareholder, to immediately find avenues to avoid increases and to expedite a reduction in their current charges. It is absolutely ridiculous that organisations such as the ESB and Bord Gais should hold the country to ransom in an environment where international oil prices have more than halved in the last two months,” he said.
“It should not be even considering an increase. The Commission on Energy Regulation must stipulate to ESB and Bord that any shortfalls be offset by greater efficiencies, reductions in their domestic cost base and a re-examination of capital expenditure as a temporary measure until the economy stabilises.”
He added that the Commission for Energy Regulation “must intervene to make national competitiveness a priority and ensure reductions in wholesale prices for oil and gas are reflected in prices set by the ESB and Bord Gais”.

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