In their article of 7 May 2006, 'Power corrupts, state monopoly power corrupts absolutely', it was argued that the average ESB wage stood at 95,000 or "around" 43 per hour. Where this figure comes from is a mystery.

The CSO reports that the average wage in the energy sector is 25.36 per hour. Average wages and salaries, including management, are less than 60% of the figure used in the article.

A network technician will earn 32,000 a year starting off, about the average industrial wage.

The argument was that public enterprise is a 'wage racket'. Yet if one compares wages in Ireland with those in the UK electricity market, one discovers they are about the same, even though the UK sector is privatised.

The ESB wage bill increased by 2% in real terms over the past two accounting years. In the past five years, ESB gained over 350,000 new customers, while the number of employees declined. We can only conclude that the allegation of a 'de facto wage racket' is ideologically inspired.

The assertion that high prices are caused by lack of competition is equally groundless.

Between 2001 and 2004, ESB operating costs, including the purchase of increasingly expensive oil and natural gas, went up by only 5% a year. Meanwhile, electricity prices increased by over 40%. Since the price increase can't be put down to rising fuel costs or some fantasy 'wage racket', what is going on?

The government wants what the authors want in the name of 'competition' and 'liberalising the market' . . . private sector companies producing electricity. But ESB prices have historically been so low that private companies couldn't turn a profit.

To entice private operators, the government increased energy costs through price rises, stealth taxes and levies. People are paying for an ideological experiment in liberalisation and the eventual privatisation of significant sections of ESB.

There's more. Consumers pay an invisible 'investment levy'. Despite the fact that the grid is a resource of vital national importance, the government, unlike those in most other countries, does not provide the capital investment. Instead, the cost is paid through higher electricity bills. Even the Department of Enterprise, Trade & Employment stated that this policy "unnecessarily adds to energy costs and undermines our commercial competitiveness".

The government also adds a public obligation levy, again criticised by ET&E, and higher VAT. Businesses lose competitiveness and householders face higher living costs, all because of the government's ideological obsession with privatisation.

The article was correct to highlight the need to develop native renewable resources.

It is an economic and environmental imperative that we switch from a fossil-fuel based economy to a renewable energy-based one.

But the article painted a backward-looking landscape of competing private companies wholly owning the generation plants. That was tried in Ireland and failed so completely that the government of the time had to establish ESB.

Back in the 1920s, we had a plethora of private companies in the energy market. They made good profits but couldn't do the thing they were supposed to: provide electricity on a national scale.

An epochal shift from fossil fuels will not be carried out by a fragmented and incoherent market. This is not a statist argument. This development can, and where possible should, take place with a range of partners such as private companies, multi-nationals, local authorities and non-profit organisations.

But we will need a substantial player with decades of experience on a national scale. We will need large-scale industrial planning. We will require considerable investment in research, design and integration, especially in the area of wave and tidal power which has even greater potential than wind.

There is one body in existence that can carry that out: ESB.

Rather than selling off an efficient and competitive public enterprise we should harness the skills, productivity and experience of the ESB workforce to make the transition to renewable technologies while maintaining competitive prices.

We need a national vision similar to that being developed in Sweden, which is working for an oil-free economy by 2020. What we don't need are pricing policies and ideological experiments that create obstacles to efficiency and damage business, living standards and our environment.

WAGE BURDEN SAPS ENERGY

Constantin Gurdgiev and Peter Nolan WE NOTE that the ATGWU seems after two weeks to be unable to "nd examples of underpaid employees at ESB. Instead, we suggest that the ATGWU should be concerned with energy users who have no choice but to accept ESB's service.

According to an Ibec report from 2005, one in six companies were considering leaving Ireland to avoid high energy costs. The burden on consumers falls disproportionately on the poorest, with 226,000 households unable to afford adequate heating.

The latest audited company accounts show that, in 2004, ESB employed 9,289 workers. The salary bill including bene"ts was 666,049,000, implying average earnings of 71,703. This compares to 67,210 in 2003, a 6.7% increase year on year. Between 2000 and 2004, the bill grew by 11.6% annually. Based on this, the projected 2006 average annual salary at ESB is around 97,000.

Perhaps the biggest, unchecked power of ESB unions lies in the fact that these bene"ts are for life. The risk-adjusted value of the ESB pay package in 2004 was more than 100,000; this does not take account of guaranteed pensions and state pay-offs for agreeing to restructuring.

In 2003, ESB offered up to 250,000 per employee to close its plant at Rhode, Co Offaly, which stood idle for two years during which workers continued to collect wages. A payoff of more than 40,000 per worker is being offered to secure employees' agreement to stay in their jobs while ESB separates Eirgrid.

The model for Irish energy policy should be Britain.

Tough and independent regulation overseeing a privatised industry saw electricity prices to households fall in real terms for two decades until 2003. UK domestic customers paid about the same in real terms in 2005 as in 1999.

The ATGWU says the ESB workforce is paid similar amounts to those doing similar jobs in Britain. This con"rms our point: ESB workers are overpaid because they collect wages 'comparable' to more productive foreign colleagues while ESB delivers the most expensive electricity in Europe.

Constantin Gurdgiev is an economist and editor of Business & Finance. Peter Nolan is a former energy trader. The views expressed are their own.