Cabinet papers released under the Freedom of Information Act show the coalition penalised domestic consumers by favouring cost-cutting measures to support some of the biggest multinationals in Ireland.

The documents show that in July 2009, Eamon Ryan, the then communications, energy, and natural resources minister, sought government approval for “the permanent rebalancing from October 1, 2010, of network tariffs towards large energy users to be paid for by higher prices to domestic consumers”.

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The addition of €50m to domestic customer tariffs added more than 3% to household electricity bills, although its impact was effectively nullified by a subsequent fall in international prices of fossil fuels.

Justifying its decision, the government noted that industry groups had regularly complained about the disparity between household electricity prices in Ireland, which were “broadly competitive” with other EU countries, and much higher energy costs for large companies.

Faced with the prospect of having to find €1bn to maintain existing subsidy levels to avoid price rises for all electricity customers, the cabinet voted instead to only provide the supports for large industry at the lower cost of just €176m.

Mr Ryan also sought a special dividend of €176m from the ESB, from the profits of its sale of a generating plant to Spanish electricity firm Endesa, to ensure large energy users faced no increase in electricity network charges in 2009-10.

He pointed out that all electricity users were benefiting from subsidies totalling €567m, which he described as “extraordinary measures taken to prevent major [40%] increases in electricity prices in 2008 as international fossil fuel prices soared”.

Mr Ryan acknowledged that they could only be “a temporary remedy”. As the subsidies were set to expire in September 2009, he warned that large energy users would see their electricity bills increase by up to 30% unless special measures were taken.

The document shows that the cabinet committee on economic renewal, whose membership consisted of Mr Ryan, Mr Cowen, finance minister Brian Lenihan, and tánaiste Mary Coughlan, decided that large energy users should face no increases in their electricity bills.

“A rebalancing of network tariffs in favour of large energy users, achieved through higher network charges for domestic users, would help safeguard employment in some of our most critical and export-oriented industries,” Mr Ryan said.

It was estimated that adding €50m to domestic customer tariffs would also add €5m to the social welfare bill for providing free electricity units to some customers. Mr Ryan anticipated that such a measure would “prove unpopular” but argued that households could still avail of discounts from ESB’s competitors.

However, he said: “The rebalancing of tariffs would send a clear signal to industry that government is committed to improving the competitiveness of energy costs for business as part of the overall competitiveness challenge.”

Rebates for large energy users were eventually ended in September 2012.

Asked about the issue this week, Mr Ryan — now the Green Party leader — said it was a difficult decision but that “employment was a huge issue at the time”.

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