Carthy raises EirGrid Advertising Expenditure at Public Accounts Committee
The Dáil’s Public Accounts Committee last week heard questions regarding the substantial advertising expenditure by EirGrid when the Secretary General of the Department of Environment, Climate Action and Communications appeared before the members.
Cavan Monaghan Sinn Féin TD, Matt Carthy, referenced that EirGrid was a state-owned company that delivered a dividend of €4million per year. The company has spent up to €8.6million in advertising over a five year period which could otherwise have been allocated to the exchequer. Deputy Carthy asked why a company that has no competitors, and whose customers have no choice but to use it, would need to spend such enormous sums on advertising.
Carthy also questioned the department’s relationship with EirGrid and mentioned previous FOI documentation secured by The Northern Standard which showed what the Deputy called a ‘seamless relationship’ between the two. He disputed claims by the Department that EirGrid does ‘good work’ in community outreach claiming that instead EirGrid has antagonised communities with it’s advertising activities.
The interaction went as follows:
Deputy Matt Carthy (Sinn Féin): I want to ask questions with respect to the Department’s relationship with EirGrid. I note the Minister is a shareholder in EirGrid. Could Mr. Griffin give an outline of what that means in practice in terms of the engagements on the management and running of the company?
Mr. Mark Griffin (Secretary General of the Department of Environment, Climate Action & Communications):
The company is a commercial semi-State company, with shares held jointly by our Minister and the Minister for Public Expenditure and Reform. Regarding the sorts of governance arrangements that are in place for EirGrid, the Minister for the Environment, Climate and Communications and the Minister for Public Expenditure and Reform jointly agree a letter of expectation.
The most recent one dates from December 2019 to June 2021. It sets out the sorts of things the State wants the company to do, both in terms of financial performance and metrics and in terms of supporting overall Government policy, particularly around the delivery of infrastructure that is necessary to meet our 70% renewable electricity target by 2020. That is the broad framework within which the governance relation between ourselves and EirGrid operates.
Matt Carthy Obviously, good financial management is important to the Department and the State because there is a vested interest in the Department and the wider Government apparatus that EirGrid is financially successful and prudent because when it is successful it returns a dividend to the State. I understand that dividend has been around €4 million for a number of years. Is that correct?
Mark Griffin: That sounds about right.
Matt Carthy: The advertising spend of EirGrid is a very unusual spend, as far as I am concerned, considering that EirGrid does not have any competitors and its customers have no choice but to engage with it. It would appear that advertising spend would be strange.
Over the five years leading up to, I think, 2019, EirGrid spent €8.6 million on what is described as selling and advertising. That is €8.1 million more than was approved by the Commission for Regulation of Utilities, CRU. Considering that the State is drawing down dividends of €4 million, that is proportionately a big spend on advertising.
Does the Department have a view on the rationale for that or on the fact that it apparently was not approved? Does Mr. Griffin think that is a prudent use of the resources of the company?
Mark Griffin: I would probably need to understand a bit more context around what that money was used for. The Deputy mentioned the CRU, which regulates EirGrid from the point of view of approving the levels of funding it can spend on the network. The most recent regulatory review, PR5, was approved by the CRU in December. It sets out the allowable investment by EirGrid and by ESB Networks over the next number of years. I am not au fait with that issue but I will come back to the Deputy with a note on it. I will get an explanation from EirGrid as to why that seems to be out of kilter with what—–
Matt Carthy: Does Mr. Griffin see any rationale as to why a company that has no competitors and whose customers have no choice but to use it would be spending multiples of millions on advertising campaigns? We have all seen it. One cannot go on social media without seeing promotion by EirGrid. It is the same when one watches a football match. Current affairs programmes on a number of local radio stations are sponsored by EirGrid.
Does Mr. Griffin understand why that would be needed?
Mark Griffin: EirGrid does good work, as I see it, around sponsoring – I think it was – the under-20 GAA hurling over the last number of years. On the advertising bit, I need to get it clear in my head. EirGrid does a great deal of community outreach which one would imagine involves the need for extensive investment in local advertising in the areas where they are doing work or expecting to do work. It has done a good deal of outreach on some big projects it is doing to keep the communities adequately briefed on what is happening and likely to happen in the area.
Whether that is encompassed within the €8.1 million, I do not know. If it is, I would see that as being hugely important in terms of that community engagement piece, particularly on projects some of which, as both of us know, can be quite difficult and controversial in local communities. That bit needs to be appropriately managed by EirGrid as the—–
Matt Carthy: To conclude on one brief point, EirGrid is not good at outreach, although it is apparently very good at spending millions of euro on advertising.
My constituency is affected by one of its primary planned projects and its engagement has been very poor. Its advertising campaign has done the opposite of what the Department set out as the objective because it has antagonised people even more.
Matt Carthy: I want to go back to the issue of the relationship between the Department and EirGrid. As the Secretary General rightly said, EirGrid is involved in the development of some substantial infrastructure.
I note from a previous freedom of information request, secured by the newspaper The Northern Standard, that the relationship seems to be a strange one, in that EirGrid was even consulted and contributed to ministerial responses to parliamentary questions among other issues.
A former Secretary General is now the chair of the board of EirGrid. It seems to be a fairly seamless relationship with regard to some of the major infrastructural developments.
One has situations, to which the Secretary General referred, where there can often be community differences, to put it mildly, between EirGrid’s stated position and the wishes of the communities affected.
I am referring specifically to the North-South interconnector. Has the Department ever analysed the information it receives from EirGrid?
For example, has the Department ever analysed, visited or engaged with the ALEGrO interconnector development between Belgium and France? This is undergrounded and is a model sought by many communities. Does the Department, as appears to be the case, take its direction entirely from EirGrid?
Mark Griffin: I can assure the Deputy that we do not take our information or direction entirely from EirGrid. The Deputy commented about a former Secretary General being chair of EirGrid. The said man came through a process utterly independent of the Department, undertaken by the Public Appointments Service, strictly in accordance with the state aid guidelines and the name presented to the Minister.
Any factual information we take, we always critique it ourselves. It is absolutely appropriate to speak to all our State agencies, whether it is EirGrid, the ESB, An Post or whoever else, to source information from time to time for particular processes.
On the ALEGrO interconnector, to the best of my recollection, when the 2018 international expert study review was being undertaken, it looked at a range of high-voltage direct-current, HVDC, underground cable projects and how they operated. I stand to be corrected but I believe the ALEGrO one was considered. I will double-check that for the Deputy.