Direction to ESB PES on Tariffs to apply from 1 st November 2007 CER/07/191

Transcription

1 Direction to ESB PES on Tariffs to apply from 1 st November 2007 CER/07/ October

2 Contents 1 Background Consultation Background Large Energy Users Format of the paper Direction to PES on 2007 Tariffs Direction relating to PES Tariffs Direction relating to LEU charges Tariffs applicable from 1 st November Detailed changes in PES tariffs Tariff levels Domestic tariffs General purpose tariffs Low voltage maximum demand tariffs Comments Received to Proposed 2007/08 Tariff Consultation Proposed Structural Changes to the Domestic, GP and LVMD Tariffs Respondents comments Commission s views Proposed Tariff Levels Respondents comments Commission s views Proposed GP price reduction Respondents comments Commission s views Dual Tariff for LVMD customers Respondents comments Commission s views Amendment to Landlord Group Account Respondents comments Commission s views Timing of proposed Tariff Announcements Respondents comments Commission s views Presentation and implementation of tariff rates Respondents comments Commission s views Misalignment of Tariff period to calendar year Respondents comments Commission s views Attachment 1: PES tariffs applicable from 1 st November Attachment 2: PES Tariffs to Apply to Consumers Affected by CER/06/

3 1 Background 1.1 Consultation Background This document contains a Direction to ESB operating in its capacity as Public Electricity Supplier (PES). It concerns Electricity Charges that will apply from 1 st November 2007 until 30 th September It is issued in accordance with Section 3 of Statutory Instrument No.60 of 2005 and applies to ESB ( the Board ) in respect of its charges for electricity ( tariffs ) to final customers who are not being supplied in accordance with a licence issued under paragraph (b), (c), or (d) of Section 16(1) of Statutory Instrument No.60 of The document also incorporates details of the comments received in response to the consultation paper 1 concerning the initial proposals for this Direction issued on 27 th September The consultation closed on 12 th October 2007 and elicited two formal responses from Airtricity and Irish Estates. The views expressed in their submissions are summarised in this paper. There have also been a number of informal views expressed and where relevant these views are also carried forward in the discussion in this paper. The tariff consultation paper observed that the implementation of the SEM on 1 st November 2007 will give rise to a substantial re-structuring of the manner in which wholesale electricity costs are recovered through the PES tariffs. Previously wholesale electricity costs had been based on the costs of specific generating plant much of which has been covered by a Public Service Order. Under the SEM wholesale electricity supplies will be procured by the PES from an electricity Pool through which the bulk of electricity generation in the island of Ireland will be sold. The price of electricity in the Pool will vary in each halfhour. It will be set by the offer price of the marginal generator, i.e. the offer price of the generator required to meet the demand of the system in that halfhour. Whilst encouraging economic efficiency, this change in the manner in which wholesale electricity is valued will create significant disturbance in some PES retail tariff rates. To give time for the customer and competing suppliers to adjust to the new market arrangement the Commission has sought to draw a balance between a tariff framework that accurately reflects the underlying wholesale costs and the disturbance to commercial arrangements that an immediate wholesale revision of tariff structures would create. In drawing this balance the Commission has been cognisant of the representations made to it by both supply businesses and customers. Where this judgement has been exercised it is with the view of being a transitional arrangement to endure for one year until the 1 st October CER/07/159 3

4 The consultation paper also noted movements in the other costs incurred in supplying customers. These are predominantly the costs of using the distribution and transmission networks, but also include supply costs and categories of costs separately recognised in the new market that were previously recovered as part of the overall generation and transmission charges. 1.2 Large Energy Users This paper also covers the tariffs pertaining to Large Energy User (LEU) customers that continue to be supplied by PES. LEU customers are those supplied at MV (10kV) or a higher voltage. On 9 th August 2007 the Commission consulted 2 on two issues concerning these customers. The first related to the restriction that applied from 8 th September This prevents customers previously supplied by PES returning to PES other than under exceptional circumstances. The second issue addressed the form of charging arrangement that PES should apply to those customers it continued to supply under the SEM. The Commission s Decision on both these matters was provided on 27 th September The Decision required that the restriction should continue so as not to undermine supply competition in this sector of the market. It also indicated that as an enduring arrangement the LEU customers that continued to be supplied by PES should be able to elect for one of two options. These are either a pure pass through of the ex-ante pool prices as declared at the dayahead stage, or a seasonal time of day (STOD) tariff calculated on the same basis but averaged over the class of customers that continue to be supplied by PES. 1.3 Format of the paper Section 2 of this paper sets out the Commission s Direction to PES in relation to tariffs that will apply from 1 st November Attachment 1 provides details of the fixed tariffs offered by PES and Attachment 2 details the tariff and expected pool prices that will underpin the arrangements for the LEU customers. Section 3 reviews the detail of the tariff revisions and indicates the rationale behind the Commission s Decision. In Section 4 a synopsis of the various issues raised in the consultation is followed by a summary of respondent s views. In reaching its conclusion the Commission has taken into account the various comments received in the formal and informal representations that have been received from interested parties in making this Direction. 2 CER/07/120 3 CER/07/149 4

5 2 Direction to PES on 2007 Tariffs 2.1 Direction relating to PES Tariffs PES is required by this Direction to charge with effect from 1 st November 2007 the tariffs set out in Attachment 1 of this document, and which relate to the supply of electricity provided at low voltage (LV). In this respect the Direction applies to the tariff categories of: Domestic Urban (Standard, Nightsaver and Group) Domestic Rural (Standard, Nightsaver and Group) Residential Business Premises Commercial and Industrial General Purpose (Standard and Nightsaver) Low Voltage Low-Load-Factor (low voltage) Commercial and Industrial Maximum Demand (low voltage) Public Lighting and Unmetered Supplies The reductions in average price levels seen by these groups are 5.4% for Domestics, 4.4% for Non-Domestic General Purpose and 2.3/8.4 4 % for Low Voltage Maximum Demand customers. However, it should be emphasised that these averages relate to all customers in the relevant class. Because the structures of some of the tariffs that PES applies have been altered individual customers may see price changes that are either more or less than the class averages displayed. The average overall price reductions noted above are slightly lower than those anticipated in the Commission s proposed Decision of 27 th September. The price reductions expected at that time reflected the then current view (August view) of wholesale electricity prices that would apply from the implementation of the SEM until the end of the tariff period (30 th September 2008). Recent movements in fuel prices and their likely impact on Pool prices has caused a revision of PES s cost of acquiring supplies of electricity from the Pool for which the price has not yet been fixed forward by the purchase of Contracts for Difference (CfD). The manner in which the impact of these higher fuel prices has eroded the scale of reduction in the average price for customer categories is discussed further below. 2.2 Direction relating to LEU charges LEU customers comprise those connected at 10kV (MV), 38kV and 110kV. Currently these customers are supplied by PES under a published Seasonal Time of Day (STOD) tariff with rates specific to the voltage of connection. 4 Existing PES customers in this category will see a higher average reduction in the rates as a consequence of a retrospective adjustment to the rates resulting primarily from an over-recovery of the tariff in the first 10 months of

6 The STOD tariff contains 7 different kwh rates that apply to designated periods covering the peak, day, weekend and night in the winter, and the day, weekend and night in the summer. In accordance with the Decision published on 27 th September 2007 PES will replace these published tariffs with a Pool price pass through arrangement that charges those customers PES continues to supply the actual costs incurred in procuring supplies of electricity from the Pool to meet their demands. Customers will be able to elect for this arrangement on either an individual or Group basis. In the former case the charge to the customer will comprise the ex-ante System Marginal Price (SMP), as published by the Market Operator (MO) on the day prior to the day of consumption, together with the attendant capacity payments, market operator costs (including imperfection charges) and relevant network charges. A supply margin of 2% will also apply. These charges will be billed to the customer in the same STOD format as the tariff that has applied during Alternatively the customer may elect for a similar arrangement but where a methodology is applied so as to average the pool and other costs across the LEU customer class as is the practice for other tariff classes. In this case the SMP component of the price will also be based on the ex-ante Pool price as for the customer specific version of the charging arrangement. The former arrangement is likely to appeal most to those customers that can manage their demand at the day-ahead stage. It thus has the attribute of encouraging the more efficient and economic use of energy by the customer. Charges will be billed as an aggregate of the half-hourly charges in each of the 7-rate STOD bands of the existing tariff. In electing for the class variant of LEU arrangement the user will be provided with an interim STOD tariff for the period from the implementation of the SEM until the end of February These rates will apply irrespective of the movement in pool prices during this period. The STOD rates for this period are given in Attachment 2. To assist customers in making their judgements on the likely cost of electricity over the period of the charges PES has produced indicative prices for the period from 1 st March 2008 until the 30 th September The indicative prices for this period are also given in Attachment 2. It must be emphasised that the prices are only indicative and the actual prices could be either lower or higher than the rates forecast in this paper. Users should avail themselves of a means to obtain the ex-ante pool prices to observe whether the LEU class will be more or less than the indicative rates. 6

7 2.3 Tariffs applicable from 1 st November 2007 In approving the structure and level of the fixed tariffs contained in Appendix 1 the Commission has had regard to representations from both customers and suppliers. The Commission is concerned that customers should benefit from the lower anticipated pool prices that should follow the reduction in fuel costs when compared to the levels seen in 2006 and It is also recognised that fostering competition in supply is an important ingredient in providing customers with choice and creating a continuing downward pressure on retail price movements. The detailed changes in both the structure and level of each of the fixed tariffs, together with the rationale for these changes, are described in the next section. 7

8 3 Detailed changes in PES tariffs 3.1 Tariff levels The proposed rates included in the September consultation paper were based on a view of Pool prices that reflected forward prices in the fuel markets at the end of August. Subsequent movements in fuel prices will influence the expectation of future Pool prices. The auctioning of Contracts for Difference in July and August has enabled PES to hedge a significant proportion of the load it expects to serve. In doing so it has insulated most of its customers demand to these future movements in market wholesale prices over the tariff period. These hedges are most effective where the PES has most certainty in its forecast of customer demand. The Commission has decided to incorporate PES s latest view of Pool prices at the point in time that rates for the tariff period are finalised. This is intended to generate more cost reflective pricing and minimise market distortions created by correction factors. An upward movement in the prices of all generation fuels between the end of August and the 15 th October has caused PES to revise upwards its view of the time weighted average of Pool prices for the tariff period by around 11%. However the impact of this movement on tariff rates will be ameliorated by the hedging of Pool prices that PES has already achieved for its forecast demand in each sector of the market. For domestic and public lighting customers the Commission has decided not to include the impact of any such changes in the calculation of tariffs for next year due to the current level of competition in these market sectors and the scale of the impact. 3.2 Domestic tariffs The overall average movement in the price seen by all domestic customers remains at 5.4% as previously announced. However, as noted above this figure masks a range of price changes that will be seen by individual customers. These result from structural changes in the tariff that should better reflect the underlying costs of wholesale electricity. The Commission agrees that it is no longer appropriate for the day rate in the Night Saver (2-rate) tariffs to be equated with the energy rate in the single rate domestic tariffs. The temporal variation of price in the Pool provides a clear signal for structuring rates that apply to specific hours to reflect the expected Pool prices in those hours. Making the tariff more reflective of the underlying wholesale electricity costs also enables the standing charges in the Night Saver domestic tariffs to be aligned directly with the underlying non-energy costs recovered by this element of the tariff. 8

9 3.3 General purpose tariffs The General Purpose tariffs apply to smaller industrial and commercial loads. This sector of the market is now beginning to see an increase in supply competition as independent suppliers contest particular areas of the sector. The consultation paper noted the PES proposal to amend the structure of the GP tariff so as to remove the two kwh block structure that applies to the day energy rates. The current structure creates a declining average cost of electricity for a customer as energy consumption increases. Under the SEM there are no economies of scale to be found in the costs of procuring wholesale electricity from the Pool. The existing GP tariff structure may also be viewed as not conducive to encouraging energy efficiency. Accordingly the Commission supports in principle the structural change that has been proposed. However, the need to create conditions that will foster competition in this sector of the market suggests that major structural change in the PES tariff should be given some advance notice. This would provide a window in which independent suppliers could adjust their commercial arrangements in response to any new PES tariff structure that is proposed within the context of a newly emerging SEM. The Commission has therefore decided to defer the introduction of the structural change proposed by PES during this tariff period but will adopt these revised structures in tariffs that apply from 1 st October Whilst the level of the various GP tariffs have been adjusted to reflect the movements in underlying costs, the GP tariff structures applying in 2007 has been retained for the next tariff period. The overall movement in GP prices is estimated as a reduction of 4.4% for the tariff class. However, this is an interim arrangement only and the Commission proposes to introduce the new GP tariff structures in next year s review. 3.4 Low voltage maximum demand tariffs Consistent with its proposals for the structure of GP tariffs PES also proposed that the LVMD tariff structure be revised to remove the separate kwh blocks that are found in the current structure, and abandon the summer maximum demand charges. The Commission agrees that these structural changes will enable the underlying costs to be better reflected in the tariff. In the sector of the market covered by these tariffs competition is much better established since PES supplies around only 25% of the sector. Accordingly the Commission believes that it is appropriate for PES to introduce these structural changes from 1 st November Notwithstanding this the continued use of a maximum demand tariff to reflect underlying costs that vary predominantly with the changing prices in the Pool is not considered to be an enduring arrangement. The Commission believes that in the medium term it would be desirable for PES to consider the use of a STOD structure for this group of customers. At the moment this possibility is limited 9

10 because only a proportion of the PES customer base in this sector is equipped with interval metering. The consultation paper contained the proposal that PES would offer two variants of its LVMD tariff. The first variant would apply to customers supplied by PES during 2007 and would indicate an average price reduction for this class of customers of 8.4%. It is understood that this reduction in the price levels reflects the higher than expected revenue recovered from these customers in the current tariff period. The second variant of the tariff would be available to new customers or those returning to PES having not been supplied by them during This variant of the tariff reflects the future expected wholesale costs of electricity and a greater exposure to the increase in Pool prices given the uncertainty of the demand forecast and consequent lack of hedges (CfD) around the Pool prices. This tariff variant indicates an average price reduction for this class of customers of 2.3%. 10

11 4 Comments Received to Proposed 2007/08 Tariff Consultation This section summarises comments received on both the draft direction to ESB PES on electricity charges that will apply to non-leu customers 5 and the charging arrangements that will apply to LEU customers 6 from 1 st November 2007, and sets out the Commission s response to these comments. 4.1 Proposed Structural Changes to the Domestic, GP and LVMD Tariffs Respondents comments A number of Respondents supported the proposed structural changes to the domestic tariff (abandoning the equation of the day unit rate in the NightSaver tariff with the unit rate in the Standard tariff), and to the GP and LVMD tariffs (the removal of the two-tier block structure of the day unit rates). It was generally believed that the changes would make the tariff more cost reflective and encourage the efficient use of electricity. However, these Respondents also observed that the notice that had been provided for these structural changes was too short and should be signalled well in advance of implementation so as to allow both suppliers and customers to assimilate the changes Commission s views The Commission welcomes the support for the proposed changes in the tariff structures; which should be a primary goal of any tariff design. However, the Commission also notes the concern that the notice given to the market of these structural changes has been particularly short. From representations made it appears that the most concern is attached to changes to the GP tariff structures. So as not to undermine the supply competition that is emerging in this sector the Commission has decided to retain the present two-tiered block structure for the day c/kwh rate for both the GP 24 rate and GP NightSaver tariff as set out in Attachment 1. This will be an interim arrangement with the intention of moving to the more reflective structure at the next tariff revision. The new structures proposed for the Domestic and LVMD tariffs have been endorsed in the tariff rates given in the Attachment. 5 CER/07/159 6 CER/07/149 11

12 4.2 Proposed Tariff Levels Respondents comments One respondent to the consultation, and a number of other parties have claimed that the tariff levels proposed in the 27 th September paper did not adequately reflect costs. It has been argued that if the view of wholesale electricity costs incorporated in the proposed rates were retained there would be insufficient margin in the tariffs, and as a result retail competition would be undermined Commission s views In response to these representations the Commission has undertaken a thorough review of each cost component underlying the PES proposed tariffs. A significant proportion of the tariff rates reflect the wholesale cost of procuring supplies of electricity in the Pool. With the implementation of the SEM it will be necessary for a supplier to take a view of the likely movement in Pool prices. Any forecast will be dependent on assumptions of generator fuel prices, exchange rates, generator scheduled outages, interconnector flows, generator opex and maintenance cost; and indeed the modelling package used to produce the forecast of market prices. Differences will inevitably arise between different forecasts due to differing assumptions. Furthermore the impact of any change in Pool price will be diluted by the degree of CfD cover that a supplier has put in place. As a result of its review the Commission is satisfied that the rates proposed by PES were a reasonable reflection of the costs PES expected to incur at the time the tariff submission (mid September 2007) was made. They were also in line with forecasts made by the All-Island modelling team at the time of the PES submission. However, since that date fuel prices have risen and will impact the market prices assumed by PES. To ensure that tariffs reflect fully the most up to date view of market prices, the end-user prices in this Direction have also been revised accordingly. 4.3 Proposed GP price reduction Respondents comments Some respondents have emphasised that the price reduction seen by a low usage customer on the GP standard tariff would be considerably greater than the overall price reduction of 5.9% announced for the General Purpose Standard tariff. It was queried how such disparities could emerge between the group average and individual customers Commission s views The average price reduction announced by the Commission on 11 th September referred to the change in revenue that would occur if the current rates and 12

13 proposed rates for the GP customer class as a whole were applied to the forecast of PES GP customer demand for the period November 2007 to September Within this overall average there could be considerably different movement in the prices seen by individual customers depending upon how their pattern of consumption interacted with the rate movements in the tariff. This was particularly the case when significant changes are contemplated to the structure of the tariff. Reporting the composite change in price in this manner has been the practice for the past six years. The Commission agrees that the percentage change for the proposed tariffs in the consultation paper would be significantly higher than the average for PES s customers on the GP Standard tariff alone and significantly lower for customers on the GP NightSaver tariff. A consequence of retaining the existing structure for the GP group will be to diminish the differential in the percentage price changes seen by customers availing themselves of these two tariffs. The Commission will consider reporting % price changes on the basis of the sub-categories of tariff for the GP group in the future. 4.4 Dual Tariff for LVMD customers Respondents comments Some respondents were concerned that by creating a dual tariff structure for PES LVMD customers, with existing customers paying the lower rates and new or returning customers paying the higher rates, would restrict competition. It was held that independent suppliers would be unable to compete for PES customers since they enjoyed lower rates when supplied by PES Commission s views As noted in the consultation paper the creation of two LVMD tariff levels for PES customers in this sector was a transitional arrangement designed to deal with a specific issue. The over-recovery of the costs of supplying existing customers in 2007 would be corrected through the lower tariff whilst new or returning customers would be offered rates reflecting the expectation of future market prices. 4.5 Amendment to Landlord Group Account Respondents comments One Respondent welcomed the proposed change to the standing charges borne by customers with a Landlord Group Account but sought details of the proposed change Commission s views The proposed change to the Landlord Group Account involves the application of a single standing charge in the tariff to reflect the underlying network charge 13

14 rather than multiple standing charges as is presently the case. The Commission believes that this is an appropriate change to make to the tariff structure so as to better reflect the underlying costs. 4.6 Timing of proposed Tariff Announcements Respondents comments A number of respondents have expressed concern at the delay in announcing the proposed price changes for the PES tariffs and the interval between the publication of the expected average price reductions and the detail of the tariff movements. It is claimed that this has significantly reduced the time available for customers to prepare bid documents, and for suppliers to respond to these with competitive quotes. Concern has also been mooted at the short interval that will apply between the setting of PES tariffs and the date for their implementation. One respondent suggested delaying the implementation of the price changes until 1 st January Commission s views The Commission acknowledges that the publication dates of the proposed and final tariffs have created tight timelines for all parties involved. However, the Single Electricity Market represents a very different market structure to the current bi-lateral wholesale market, including new rules for the procurement of wholesale electricity and new mechanisms for the recovery of costs from Suppliers. Timescales for settling wholesale costs have been further compressed by the auctioning of CfD cover in the summer. Notwithstanding this it has been important to ensure that PES costs have been appropriately assessed and the impact on customers and competition of the structural changes that logically follow from the implementation of the SEM are given proper consideration. The resulting delay in the publication date of prices has not been a desired outcome of the process and the Commission expects that in subsequent revisions a significantly longer notice will be given of any PES tariff changes. Delaying the implementation of new tariff rates until the start of the calendar year would distort retail prices since they would not align with the new paradigm for the first two months of the operation of the SEM. This impacts further the k-factor adjustment which would impede the offering of economic prices and the development of competition. 4.7 Presentation and implementation of tariff rates Respondents comments One respondent observed that by constructing tariff rates on a daily basis created difficulty for customers when validating a supplier s bill. It was claimed that a daily presentation served no useful purpose and that tariffs should revert to monthly rates. Furthermore the practice of billing new tariff rates from a 14

15 specified date results in a bill overlapping two tariff periods and thus must record two different tariff rates and two different tariff structures. It was suggested that the practice can serve no useful purpose, provides no incentive for the MRSO to manage its meter reading processes efficiently and leads to complexities for customers when validating bills. The respondent proposed that price changes should be implemented on the first billing period that commenced after the date on which the revised tariffs were introduced Commission s views The Commission is surprised by this suggestion and that the current arrangements create difficulties for a customer when validating a supplier s bill. The presentational amendments previously introduced were designed to improve the transparency of charges on a customer s bill, and allow customers to more easily replicate the bill by eliminating rounding errors. The Commission considers that method of presenting charges is helpful to customers and should therefore be retained. Applying a rate change at the start of the next billing period would introduce inequity since customers would start to pay the new rates depending on where they fell in the billing cycle. For a period customers would pay different amounts even thought the underlying costs were the same. In the present tariff revision the proposal would also generally delay the reduction in charges for customers. 4.8 Misalignment of Tariff period to calendar year Respondents comments The same respondent also wanted to see an alignment between the tariff year and the calendar year, which was also the financial year. It was suggested that this same principle should also extend to other utilities Commission s views Electricity tariffs must reflect the underlying costs of electricity supply. The introduction of the SEM on 1 st November 2007 creates a significant change in the manner in which the wholesale costs of electricity will manifest themselves. It is thus appropriate that electricity tariffs are revised from 1 st November 2007 to capture these changes. From 1 st October 2008 electricity tariffs will be aligned with the gas retail tariff year. More generally tariffs should be varied when the underlying costs move significantly to accord with the cost reflection principle. 15

16 Attachment 1: PES tariffs applicable from 1 st November 2007 The Commission has calculated an over recovery of 26 million in ESB Power Generation allowable costs and revenues in 2007 to the start date of the SEM 7. This over recovery will be rebated back to the market via the TUoS System Services charge using the TUoS System Service charge methodology. The following schedule of tariffs incorporates a c/kwh reduction to the kwh unit rate that reflects the following c/kwh reduction (at the trading point) to the TUoS System Services (c/kwh) charge. c/kwh Reduction at Trading Point Customer Credit (rebate issued via the TUoS System Services Charge ) Total c/kwh Reduction The actual c/kwh reduction to each tariff below (i.e., at customer point) will vary depending on voltage level. This is due to the impact of loss factors or the loss of energy associated with distributing energy along different network voltage levels. Supplies at lower voltages pay for line losses as well as energy usefully used therefore they benefit from the reduction in /MWh at the trading point as this covers energy lost on the lines as well as energy used. 7 CER/07/144 16

17 ESB (Public Electricity Supply) Electricity Tariffs Applying for 11 month period 1 Nov 2007 to 30 Sept 2008 Urban Domestic Urban Domestic Standard Tariff Price per Unit Annual Price Standing Charge per annum, pro-rated daily Unit Rate per kwh PSO per month end 0.00 Urban Domestic Nightsaver Tariff Price per Unit Annual Price Standing Charge per annum, pro-rated daily Unit Rate Day per kwh Unit Rate Night per kwh PSO per month end 0.00 Urban Domestic Night Storage Heating Price per Unit Annual Price Standing Charge per annum, pro-rated daily Unit Rate per kwh

18 ESB (Public Electricity Supply) Electricity Tariffs Applying for 11 month period 1 Nov 2007 to 30 Sept 2008 Rural Domestic Rural Domestic Standard Tariff Price per Unit Annual Price Standing Charge per annum, pro-rated daily Unit Rate per kwh PSO per month end 0.00 Rural Domestic Nightsaver Tariff Price per Unit Annual Price Standing Charge per annum, pro-rated daily Unit Rate Day per kwh Unit Rate Night per kwh PSO per month end 0.00 Rural Domestic Night Storage Heating Price per Unit Annual Price Standing Charge per annum, pro-rated daily Unit Rate per kwh Note: Domestic Group Account tariffs are discontinued from 1 November Customers on these tariffs will transfer to the appropriate corresponding Domestic tariff e.g. Urban Domestic Group Account Standard Tariff will transfer to Urban Domestic Standard Tariff. 18

19 ESB (Public Electricity Supply) Electricity Tariffs Applying for 11 month period 1 Nov 2007 to 30 Sept 2008 General Purpose General Purpose (QH & NQH) Standard Tariff Price per Annual Unit Price Annual Quantity Daily Quantity Standing Charge per annum, pro-rated daily SC Autoproducer per annum, pro-rated daily Unit Rate 1st Block per kwh - first 47,815 kwh consumed annually, pro-rated daily , Unit Rate 2nd Block per kwh - balance per period PSO (< 30 kva) per month end 0.00 PSO (>= 30 kva) per kva - per month end 0.00 General Purpose (QH & NQH) Nightsaver Tariff Price per Annual Unit Price Annual Quantity Daily Quantity Standing Charge per annum, pro-rated daily SC Autoproducer per annum, pro-rated daily Unit Rate Day 1st per kwh - first 47,815 kwh , Block consumed annually, pro-rated daily Unit Rate Day 2nd Block per kwh- balance per period Unit Rate Night per kwh PSO (< 30 kva) per month end 0.00 PSO (>= 30 kva) per kva - per month end 0.00 General Purpose (QH & NQH) Night Storage Heating Price per Unit Annual Price Standing Charge per annum, pro-rated daily Unit Rate per kwh

20 ESB (Public Electricity Supply) Electricity Tariffs Applying for 11 month period 1 Nov 2007 to 30 Sept 2008 Residential Business Premises Residential Business Premises Standard Tariff Price per Unit Annual Price Annual Quantity Daily Quantity Standing Charge per annum, pro-rated daily SC Autoproducer per annum, pro-rated daily Unit Rate 1st Block per kwh - first 5,110 kwh consumed annually, pro-rated daily , Unit Rate 2nd Block per kwh- balance per period PSO (< 30 kva) per month end 0.00 PSO (>= 30 kva) per kva - per month end 0.00 Residential Business Premises Nightsaver Tariff Price per Annual Unit Price Annual Quantity Daily Quantity Standing Charge per annum, pro-rated daily SC Autoproducer per annum, pro-rated daily Unit Rate Day 1st per kwh - first 5,110 kwh , Block consumed annually, pro-rated daily Unit Rate Day 2nd Block per kwh- balance per period Unit Rate Night per kwh PSO (< 30 kva) per month end 0.00 PSO (>= 30 kva) per kva - per month end 0.00 Residential Business Premises Night Storage Heating Price per Unit Annual Price Standing Charge per annum, pro-rated daily Unit Rate per kwh Note: Unit Rate 1 st Block is billed on the basis of Annual Quantity / 365 * number of days in the billing period. Any balance is billed at price for 2 nd block. Low Power Factor Surcharges (applicable to DG 5 General Purpose and Residential Business Premises tariffs) Low Power Factor Surcharge applied to kvarh in excess of one third of kwh in any bill (For NQH metered customers, the billing period is two months. For QH metered customers, the billing period is one month) /kvarh 20

21 ESB (Public Electricity Supply) Electricity Tariffs Applying for 11 month period 1 Nov 2007 to 30 Sept 2008 Maximum Demand (Low Voltage) Tariff for existing ESB PES customers 8 Maximum Demand (Low Voltage) LVMD Price per Unit Annual / Seasonal* Standing Charge per annum, pro-rated daily 1, SC Autoproducer per annum, pro-rated daily Capacity Charge (MIC) per kva per annum, pro-rated daily Excess Capacity per excess kva per billing NQH period Excess Capacity QH per excess kva per billing period MD (KW) - Summer* pro-rated daily MD (KW) - Winter* pro-rated daily Summer Unit Rate Day per kwh Winter Unit Rate Day per kwh Unit Rate Night per kwh PSO (< 30 kva) per month end 0.00 PSO (>= 30 kva) per kva - per month end An existing customer is a customer whose meter point registration number (MPRN) is registered to PES on 26 th September

22 Tariff for new ESB PES customers Maximum Demand (Low Voltage) LVMD Price per Unit Annual / Seasonal* Standing Charge per annum, pro-rated daily 1, SC Autoproducer per annum, pro-rated daily Capacity Charge (MIC) per kva per annum, pro-rated daily Excess Capacity per excess kva per billing NQH period Excess Capacity QH per excess kva per billing period MD (KW) - Summer* pro-rated daily MD (KW) - Winter* pro-rated daily Summer Unit Rate Day per kwh Winter Unit Rate Day per kwh Unit Rate Night per kwh PSO (< 30 kva) per month end 0.00 PSO (>= 30 kva) per kva - per month end

23 ESB (Public Electricity Supply) Electricity Tariffs Applying for 11 month period 1 Nov 2007 to 30 Sept 2008 Low Voltage Low Load Factor Tariff Tariff for existing ESB PES customers Low Voltage Low Voltage Low Load Factor Tariff Price per Unit Annual Price Standing Charge per annum, pro-rated daily 1, SC Autoproducer per annum, pro-rated daily Capacity Charge (MIC) per kva per annum, pro-rated daily Excess Capacity per excess kva per billing NQH period per excess kva per billing Excess Capacity QH period Summer Unit Rate Day per kwh Winter Unit Rate Day per kwh Unit Rate Night per kwh PSO (< 30 kva) per month end 0.00 PSO (>= 30 kva) per kva - per month end 0.00 Tariff for new ESB PES customers Low Voltage Low Voltage Low Load Factor Tariff Price per Unit Annual Price Standing Charge per annum, pro-rated daily 1, SC Autoproducer per annum, pro-rated daily Capacity Charge (MIC) per kva per annum, pro-rated daily Excess Capacity per excess kva per billing NQH period per excess kva per billing Excess Capacity QH period Summer Unit Rate Day per kwh Winter Unit Rate Day per kwh Unit Rate Night per kwh PSO (< 30 kva) per month end 0.00 PSO (>= 30 kva) per kva - per month end

24 Low Power Factor Surcharges (applicable to DG6 Low Voltage Maximum Demand & LV Low Load Factor tariffs) Tariff Low Voltage Maximum Demand /kvarh Low Voltage Low Load Factor /kvarh Low Power Factor Surcharge applied to kvarh in excess of one third of kwh in any bill (For NQH metered customers, the billing period is two months. For QH metered customers, the billing period is one month) 24

25 ESB (Public Electricity Supply) Electricity Tariffs Applying for 11 month period 1 Nov 2007 to 30 Sept 2008 Public Lighting Unmetered Supplies (urban/rural) Price per Unit Annual Price Dusk to Midnight per kwh Dusk to Dawn per kwh hr supplies per kwh PSO per kva - per month end 0.00 Public Lighting Metered Public Lighting * Price per Unit Annual Price Standing Charge per annum, pro-rated daily hr supplies per kwh PSO per kva - per month end 0.00 * The Metered Public Lighting (rural) Tariff is a restricted tariff and will NOT apply to Public Lighting connections that become metered as a result of ESB Networks >2kVA DUoS rule, as detailed in paragraph of Rules for Application of Duos Tariff Group (CER/04/300). Unmetered Miscellaneous Unmetered Supplies Price per Unit Annual Price Miscellaneous Unmetered per kwh PSO per kva - per month end

26 Attachment 2: PES Tariffs to Apply to Consumers Affected by CER/06/167 Large Energy User Interim Tariffs fixed price Seasonal Time of Day (SToD) Tariff available for ESBCS customers from 1 November 2007 to 29 th February 2008 only. Medium Voltage (10KV/20KV) Interim Fixed STOD Tariff Price - Annual Price - Per Day Standing Charge Autoproducers Maximum Import Capacity (MIC) per KVA Autoproducers 3, Excess MIC per kva Excess Autoproducers Per KVA per month Per KVA per month Public Service Obligation (PSO) Charges per kwh Nov 07 Dec 07 Jan 08 Feb 08 Weekday Day KWhs Non-Peak (Monday to Friday and ). Weekday Day KWhs Peak (Monday to Friday ). Weekend Day KWhs (Saturday & Sunday ) Night KWHs ( ) Wattless Units (KVARh) KVARh Excess units billed KVARh Pro-ration applies to Standing Charge/MIC = Annual Price//365*Days in Billing Period. Excess MIC is not pro-rated. 26

27 Large Energy User Interim Tariffs fixed price Seasonal Time of Day (SToD) Tariff available for ESBCS customers from 1 November 2007 to 29 th February 2008 only. High Voltage (38 KV Looped) Interim Fixed STOD Tariff Price - Annual Price - Per Day Standing Charge Autoproducers 42, , Maximum Import Capacity (MIC) per KVA Autoproducers Excess MIC per kva Excess Autoproducers Per KVA per month Per KVA per month Public Service Obligation (PSO) Charges per kwh Nov 07 Dec 07 Jan 08 Feb 08 Weekday Day KWhs Non-Peak (Monday to Friday and ) Weekday Day KWhs Peak (Monday to Friday ) Weekend Day KWhs (Saturday & Sunday ) Night KWHs ( ) Wattless Units (KVARh) KVARh Excess units billed KVARh Pro-ration applies to Standing Charge/MIC = Annual Price//365*Days in Billing Period. Excess MIC is not pro-rated. 27

28 Large Energy User Interim Tariffs fixed price Seasonal Time of Day (SToD) Tariff available for ESBCS customers from 1 November 2007 to 29 th February 2008 only. High Voltage (38KV Tailed) Interim Fixed STOD Tariff Price - Annual Price - Per Day Standing Charge Autoproducers 15, , Maximum Import Capacity (MIC) per KVA Autoproducers Excess MIC per kva Excess Autoproducers Per KVA per month Per KVA per month Public Service Obligation (PSO) Charges per kwh Nov 07 Dec 07 Jan 08 Feb 08 Weekday Day KWhs Non-Peak (Monday to Friday and ) Weekday Day KWhs Peak (Monday to Friday ) Weekend Day KWhs (Saturday & Sunday ) Night KWHs ( ) Wattless Units (KVARh) KVARh Excess units billed KVARh Pro-ration applies to Standing Charge/MIC = Annual Price//365*Days in Billing Period. Excess MIC is not pro-rated. 28

29 Large Energy User Interim Tariffs fixed price Seasonal Time of Day (SToD) Tariff available for ESBCS customers from 1 November 2007 to 29 th February 2008 only. High Voltage (110 KV) Interim Fixed STOD Tariff Price - Annual Price - Per Day Standing Charge 7, Maximum Import Capacity (MIC) per KVA Excess MIC per kva n/a Public Service Obligation (PSO) Charges per kwh Nov 07 Dec 07 Jan 08 Feb 08 Weekday Day KWhs Non-Peak (Monday to Friday and ) Weekday Day KWhs Peak (Monday to Friday ) Weekend Day KWhs (Saturday & Sunday ) Night KWHs ( ) Pro-ration applies to Standing Charge/MIC = Annual Price//365*Days in Billing Period. 29

30 Large Energy User Tariffs Seasonal Time of Day (SToD) Medium Voltage (10KV/20KV) Variable SToD Tariff to apply from 1 March 2008 : Standing Charge, Maximum Import Capacity, Excess MIC, PSO and Excess kvarh will apply as per Fixed Interim Medium Voltage (10KV/20KV) STOD Tariff. The table below gives indicative STOD kwh prices until September INDICATIVE Time Weighted Average Unit STOD RATES per kwh By Month The actual rates may be higher or lower. Unit = kwh March April May June July August September Weekday Day KWHs (Monday to Friday and Night kwhs (Every Day ). Weekend Day KWHs (Saturday & Sunday ) Notes: There is no Weekday Peak kwh price for the months March to September. The Weekday Day kwh price is inclusive of peak hours for these months. Weekdays are charged at Weekday / Night rates and Weekend days are charged at Weekend / Night rates. Public Holiday Day prices are charged at Weekend Day prices. The forecast SToD prices that ESBCS is required to publish for the period March 2008 to September 2008 are indicative, provided for information only and are not represented as firm or as information on which reliance may be placed. Actual prices can be expected to vary from these indicative prices in accordance with movements in the System Marginal Price within the SEM and other applicable factors. 30

31 Large Energy User Tariffs Seasonal Time of Day (SToD) High Voltage (38 KV Looped / Tailed) Variable SToD Tariff to apply from 1 March : Standing Charge, Maximum Import Capacity, Excess MIC, PSO and Excess kvarh will apply as per Fixed Interim 38KV Looped / 38KV Tailed STOD Tariffs. The table below gives indicative STOD kwh prices until September INDICATIVE Time Weighted Average Unit STOD RATES per kwh By Month The actual rates may be higher or lower. Unit = kwh March April May June July August September Weekday Day KWHs (Monday to Friday and Night kwhs (Every Day ). Weekend Day KWHs (Saturday & Sunday ) Notes: There is no Weekday Peak kwh price for the months March to September. The Weekday Day kwh price is inclusive of peak hours for these months. Weekdays are charged at Weekday / Night rates and Weekend days are charged at Weekend / Night rates. Public Holiday Day prices are charged at Weekend Day prices. The forecast SToD prices that ESBCS is required to publish for the period March 2008 to September 2008 are indicative, provided for information only and are not represented as firm or as information on which reliance may be placed. Actual prices can be expected to vary from these indicative prices in accordance with movements in the System Marginal Price within the SEM and other applicable factors. 31

32 Large Energy User Tariffs Seasonal Time of Day (SToD) High Voltage (110 KV) Variable SToD Tariff to apply from 1 March : Standing Charge, Maximum Import Capacity and PSO will apply as per Fixed Interim 110KV STOD Tariff. The table below gives indicative STOD kwh prices until September INDICATIVE Time Weighted Average Unit STOD RATES per kwh By Month The actual rates may be higher or lower. Unit = kwh March April May June July August September Weekday Day KWHs (Monday to Friday and Night kwhs (Every Day ). Weekend Day KWHs (Saturday & Sunday ) Notes: There is no Weekday Peak kwh price for the months March to September. The Weekday Day kwh price is inclusive of peak hours for these months. Weekdays are charged at Weekday / Night rates and Weekend days are charged at Weekend / Night rates. Public Holiday Day prices are charged at Weekend Day prices. The forecast SToD prices that ESBCS is required to publish for the period March 2008 to September 2008 are indicative, provided for information only and are not represented as firm or as information on which reliance may be placed. Actual prices can be expected to vary from these indicative prices in accordance with movements in the System Marginal Price within the SEM and other applicable factors. 32