The ESB's commercial director, Mr Padraig McManus, was last night appointed chief executive designate. He will succeed Mr Ken O'Hara, who retires in July.
The choice of an ESB insider comes despite the strong desire of the Department of Public Enterprise for an external appointment.
Mr McManus was one of four candidates who made presentations yesterday morning at a board meeting. The ESB's chairman, Mr Tadhg O'Donoghue, confirmed last night that a board subcommittee had been unable to agree a preferred candidate. The selection followed a secret ballot of board members in which Mr McManus is understood to have received support from three of the four worker-directors and Mr O'Donoghue. Another internal candidate, Mr Dónal Curtin, is thought to have received the support of the remaining worker-director.
While Mr McManus was perceived as a popular candidate among staff, Mr Curtin was considered favourite by certain observers.
It is understood their outside rivals on the shortlist were Mr Paul Anthony, a former executive at the New Zealand firm Contact Energy, and Mr Alan Richardson, a former Scottish Power executive. Mr Anthony is thought to have sought a remuneration deal worth greatly in excess of the €285,000 (£224,409) that Mr McManus will earn. Such a package would have required Government sanction of a special contract and it is thought the board was reluctant to go down that road.
Mr Richardson was perceived as a "very, very strong" candidate. However, he was ousted from Scottish Power last year after the US division he led ran up a $1 billion (€1.15 billion) deficit, and certain ESB board members had significant reservations about his candidature.
Mr O'Donoghue said Mr McManus was an "outstanding candidate". He had sympathy with the view that "new blood" might find it easier to deliver major change in an organisation such as the ESB, but also felt an insider could bring specific advantages to the job. "I think he'll be an excellent choice," said Mr O'Donoghue of Mr McManus. "If you've two good guys [from outside and inside the company], the insider is more likely to succeed."
The appointment followed a five-month selection process managed by the accounting firm, PricewaterhouseCoopers. Of the subcommittee, Mr O'Donoghue said: "We weren't able to reach agreement on a candidate and that was the reason we had to run four by the board."
Aged 50, Mr McManus joined the ESB in 1973. His appointment is for a maximum of seven years with an annual break-clause. An engineer, he was educated at UCD and is a fellow of the Institute of Engineers in Ireland.
Mr McManus said the company was facing "major tasks", including the implementation of a reform programme. He was a crucial figure in the negotiation of that deal, known as PACT, under which 2,000 of the ESB's 8,500 staff are leaving the company voluntarily. A 21 per cent pay rise granted to workers in that deal has been criticised by certain influential figures in the State sector, but Mr O'Donoghue defended the package last night.
Separately, the ESB board yesterday decided to close a peat-burning power station at Rhode, Co Offaly, which was seriously damaged in an explosion last year. Bord na Móna has indicated in the past that it was unhappy with the proposed closure. About 100 staff were "employed" at the station even though it produced no electricity. In a related development, the national grid operator EirGrid warned that station closures outside Dublin would "exacerbate problems" caused by the connection to the grid of new stations in Dublin.
