Eirgrid, the semi-State power grid operator, boosted its dividend to the exchequer to €4 million last year, despite an 80 per cent drop in reported profits due to the return to electricity operators of charges from previous years.
Eirgrid, which operates the grids in both jurisdictions on the island, attributed most of the slippage in its profits to returns associated with its east-west interconnector (EWIC), which hooks up Ireland and Britain.
Explaining the slump in its 2016 annual report, the group said it was required by regulators to estimate its costs and revenues in advance, with the figures used by regulators to calculate what it can recover from operators.
If it subsequently recovers more than expected from operators at electricity capacity auctions, it must then return some of that in the next accounting period, hitting revenues and profits.
The company’s total revenues fell last year from €706.2 million to €672.7 million, with most of that due to adjustments related to the EWIC.
Total profits before tax fell from €40.7 million to €7.9 million. It also recorded an impairment charge of €7.1 million in relation to its licence for Soni, the group subsidiary that operates the grid in Northern Ireland.
However, the company estimated its “underlying profits” were €16 million before the effects of the impairment charge and the EWIC returns were stripped out. This compares with about €16.9 million the previous year.
The company increased its dividend to the State from the €3.5 million it paid in the previous year.
Eirgrid reaffirmed its commitment to the proposed new North-South interconnector hooking up the State’s grid with the network in Northern Ireland, in the face of Brexit.
It has established a Brexit review group, which reports directly to its board. “Regardless of the UK leaving the European Union, there will always be many shared benefits of working closely with our nearest neighbours,” said Fintan Slye, Eirgrid’s chief executive. “We aim to maintain a strong relationship between Ireland, Northern Ireland and Great Britain on energy matters. This includes the North-South interconnector.”
