Amendment No. 1 arises out of Committee Stage proceedings, amendment No. 2 is an alternative, amendment No. 3 is consequential on amendment No. 1 and amendment No. 4 is related. I suggest that we take amendments Nos. 1 to 4, inclusive, together. Is that agreed? Agreed.
Estimates for Public Services, 1995. - Energy (Miscellaneous Provisions) Bill, 1995: Report and Final Stages.
I move amendment No. 1:
In page 5, lines 26 to 31, to delete all words from and including "a quantity" in line 26 down to and including line 31 and substitute the following:
"gas at an annual rate that is not less than the rate of 25 million standard cubic metres per annum to a single meter installation for consumption by a single customer, the Board may make such an offer to that person, including an offer to transmit gas at a rate that is greater or less than the rate to which the request relates (but not less than the annual rate aforesaid).".
On Committee Stage I indicated that I was considering bringing forward an amendment on Report Stage to insert a threshold of 25 million cubic metres of gas per annum on a single site for the granting of third party access, TPA. That is the purpose of the amendment. The matter of appropriate thresholds is too important to be left to secondary legislation and should be incorporated in primary legislation, in this Bill. The threshold I am proposing is the one in the draft EU directive concerning common rules for the internal market in natural gas. This threshold would potentially open up 75 per cent of BG's annual gas deliveries to third party access. This represents a very significant step.
My first priority in regard to the development of the gas industry must be to ensure that BG remains a vibrant and viable State body which is in a position to continue to provide a first class supply to its customers. It must be remembered that BG built up the gas industry and that while it is very successful the industry is still immature in comparison with most other continental gas industries. BG has invested heavily in the development of the industry. For example, the 1994 annual report shows that the net book value of its investment in pipeline systems on 31 December 1994 was £386 million. BG must be given a chance to reduce its debt from its current level of £208 million to a manageable level when it has to import all its gas requirements from the UK on the depletion of the Kinsale-Ballycotton field which is expected at the end of the decade. In all the circumstances, the threshold I am proposing is the most reasonable and I cannot, therefore, accept amendments Nos. 2 or 4.
I apologise for not being present at the commencement of this debate. I presume we are dealing with amendment No. 1?
Acting Chairman
We are dealing with amendments Nos. 1 to 4, inclusive.
We debated this at length on Committee Stage and I had thought the case we made was good enough to persuade the Minister to reflect on the situation. Will the Minister accept one of our amendments?
I have made my statement.
Acting Chairman
I will clarify the matter for the Deputy. Four amendments are being taken together, amendments Nos. 1 and 3 in the name of the Minister, amendment No. 2 in the name of Deputy Ned O'Keeffe and amendment No. 4 in his name. The Minister's amendments arise from the debate on Committee Stage.
In amendment No. 1 the Minister is proposing:
"gas at an annual rate is not less than the rate of 25 million standard cubic metres per annum to a single meter installation for consumption by a single customer, the Board may make such an offer to that person, including an offer to transmit gas at a rate that is greater or less than the rate to which the request relates (but not less than the annual rate aforesaid)."
What does this minimum and maximum mean?
Acting Chairman
The Minister has outlined the matter already to the House. The Deputy may speak only once on Report Stage and the proposer may reply. In this case, when the Deputy sits down, he will not be allowed contribute again and the Minister will reply.
During the Committee Stage debate we talked about therms per annum but the Minister has converted it to cubic metres per annum. Will the Minister convert 25 million standard cubic metres of gas into therms per annum?
I have outlined the reasons for proposing amendments Nos. 1 and 3 and why I am rejecting amendments Nos. 2 and 4. For the benefit of Deputy Treacy — and I appreciate his genuine interest — 25 million standard cubic metres is a more accurate measurement of the gas coming through a pipeline. The number of therms will vary with the quality of the gas whereas cubic metres is a more accurate measurement, but 25 million standard cubic metres is approximately nine million therms.
The position stands as I outlined in my original statement and I cannot accept amendments Nos. 2 and 4.
Amendment agreed to.
Amendment No. 2 not moved.
I move amendment No. 3:
In page 6, line 9, to delete "quantity of gas" and substitute "rate at which gas is".
Amendment agreed to.
I move amendment No. 4:
In page 6, line 32, after "control" to insert "any amount of gas required, to a level not exceeding one million, five hundred thousand therms per annum".
Acting Chairman
Is the Deputy pressing his amendment?
No.
Amendment, by leave, withdrawn.
I move amendment No. 5:
In page 7, between lines 29 and 30, to insert the following:
"4.— All third party access to all energy interconnectors will be the full responsibility of the national energy regulator who shall decide—
(a) volumes, pricing, and all other detail, etc.,
(b) that all appeals against decisions by the national energy regulator shall be made to the Minister for Transport, Energy and Communications, whose decisions shall be final in all matters.".
On Committee Stage we discussed the importance of third party access to all energy interconnectors. The Minister said legislation to deal with energy regulators will be brought forward. In order to allay the fears of those who have an interest in this area — representations were made by individuals and others in the corporate sector — I hope the Minister will take this amendment on board.
Amendment No. 5 proposes that all TPA will be the responsibility of the national energy regulator. As Deputies are aware, the Government is committed to the establishment of an independent energy regulator. The issue of regulation of utilities is currently being examined in my Department. I am sure Deputies realise just how complex this whole matter is. There has been a veritable avalanche of literature on the subject in the past two to three years alone, and the holding of conferences on the topic has almost become an industry in itself.
Let me highlight just some of the major issues to be addressed in that context: should the regulator be an energy or utilities regulator? What is to be the method for appointment and funding of the regulator? Should the regulator be a commission of more than one person? There is also the issue of appeals, not to mention the matter of the appropriate method of controlling prices.
The establishment of a regulator will represent a watershed in the development of the sectors concerned. It is imperative, therefore, to get it right. My Department is currently examining the whole area of regulation and legislation will be brought before the House to establish a regulator. Against that background, I could have decided that all matters relating to TPA should be handled by a regulator and waited for the introduction of the legislation establishing that office. However, that would have entailed delaying the introduction of TPA. Judging by the comments of Deputies on TPA, they would not want me to wait, nor do I want to wait. The time is now ripe to take this significant step in the development of the gas industry. I deem it best to proceed as proposed in the Bill. The Bill provides that, in the event of a dispute between BGE and the applicant for TPA as to the terms or conditions, the matter may be referred to the Minister. The Minister, or his nominee, would then determine the dispute. When a regulator is appointed over the energy sector, the entire issue of regulation of the sector will be handled by the regulatory authority.
The issue of appeals from the decisions of the regulator would more appropriately be considered in the legislation establishing that office. Accordingly, I cannot accept amendment No. 5.
In the knowledge that the excellent officials and the Minister will take what has been said on Committee Stage and today on board when drafting legislation for the national energy regulator, I am prepared to withdraw my amendment.
Amendment, by leave withdrawn.
I move amendment No. 6:
In page 17, line 9, to delete "that" where it firstly occurs and substitute "as".
This is a drafting amendment.
Amendment agreed to.
I move amendment No. 7:
In page 17, line 9, to delete "aforesaid" and substitute "produced to him or her under paragraph (c) or which he or she finds in or on the energy infrastructure".
This is a drafting amendment.
Amendment agreed to.
Acting Chairman
Amendment No. 8 in the name of Deputy Noel Treacy has been ruled out of order since it involves a potential charge on Revenue.
Are we proceeding from page 17 to page 31 without taking the sections because I should like to make some comments on the section dealing with investment in Bord Na Móna?
Acting Chairman
On Report Stage we do not discuss sections, only the amendments tabled. We shall shortly be winding up the Bill when the Deputy can make comments.
It is extremely frustrating that, having tabled a Private Notice Question, one is informed it cannot be considered; that when it is converted to an oral question the following day, it is ruled out of order or transferred to another Minister and that, when one tables an amendment — because it carries a potential charge on the Exchequer apart altogether from involving an imposition on taxpayers — it too is ruled out of order. Something will have to be done to ensure equity prevails for all Members. Regrettably, I have to accept the decision of the Chair.
I move amendment No. 9:
In page 33, lines 25 to 27, to delete "payment from that account under subsection (3) of moneys to the Board" and substitute "payment under subsection (3), at any subsequent date, of moneys from that account to the Board".
This is a technical amendment in relation to the operation of this special account. This amendment clarifies the position, to ensure that moneys paid into the special account from the Central Fund will remain in that account until such time as the Minister for Finance directs. For example, this would allow moneys to be paid into the account pending a decision of the EU Commission on the matter of State aid to Bord Na Móna or until the terms and conditions specified by the Minister for Finance, in consultation with the Minister for Transport, Energy and Communications, have been satisfied.
Amendment agreed to.
Acting Chairman
As that disposes of all amendments, we proceed to Fifth Stage in accordance with the order of the Dáil of today.
I move: "That the Bill do now pass".
This Bill is a compilation of various amendments proposed to ensure absolute legal protection for decisions taken.
The provisions of section 25 will enable the State to make an investment of £30 million in Bord Na Móna, which I welcome. I hope the Minister of State will clarify whether the European Union has agreed to that investment and, if not, give the reasons therefor and when it is likely such approval will be given.
In the past, when the private sector proposed to engage in certain energy production here, Bord Na Móna often objected whereas now there is an objection on the part of the private sector to an investment in Bord Na Móna. In addition, an international company proposes to invest in an energy project in County Mayo, the county of birth of the Minister of State present and the constituency of the Minister of State at the Department of the Taoiseach, Deputy Jim Higgins. I understand that Bord Na Móna, with officials of the Departments of Transport, Energy and Communications and Finance, are holding up a ministerial decision to approve funds already sanctioned by a semi-State body which will lead to the creation of jobs in an area which is barren, comprised of vast boglands, with little or no opportunity of creating alternative employment. We cannot allow circumstances to prevail in which the State and its resources are used to protect a semi-State organisation while, on the other hand, that same organisation, aided and abetted by public service officials, would deprive international investment in the private sector. We need competition and a level playing field.
I welcome this Bill and hope the Minister will ensure that that project is not held up any longer.
I reiterate the point made by our party spokesperson on Committee Stage, the bottom line is that we are still a long way from having a national coherent energy policy and the Bill does little to remedy that deficiency. Much of the energy industry remains Government-owned. Therefore, it is fair to say that our problems vis-à-vis energy policy stem from our more general problem of managing the overall State sector.
Five years ago the Culliton Review Group stressed the importance of having a coherent national energy policy within our overall industrial development programme. To date I am not sure much heed has been paid to what Culliton said about competition, yet it is essential to ensure that private and industrial consumers obtain their supplies at the most competitive price. Ultimately, the State will have to clearly specify its role in the energy sector whereas at present it endeavours to fulfil the somewhat contradictory roles of owner and regulator of industries in the energy sector, which is not sustainable in the long-term. The Government must promote competition within the energy market; that is difficult to achieve while it remains a controlling shareholder in the monopolies in the market.
I might remind the House that Deputies Molloy and Noel Treacy, between them, held the portfolio in energy without interruption since 1989 up to the time I took over.
I held it for only one year.
I never cease to be surprised that, as soon as former officeholders are out of office, they contend that everything they did not do when in office has become very urgent and immediate. I apply that criticism to Deputy Molloy who served in that portfolio for a long time and did very little about these issues. In fairness to Deputy Treacy, he had begun that process within the term of office of the last Government and made considerable progress.
I thank Members for their constructive approach to this Bill, which has been in gestation in the Department of Transport, Energy and Communications for some years. Deputy Molloy had put together bits and pieces of it, on which more work was done by Deputy Noel Treacy. I thank them for their efforts in its preparation.
I reiterate the importance of the energy sector to our economy overall since State investment in our energy infrastructure amounts to some £5 billion and energy imports represent approximately 3 per cent of GNP, the final energy demand bill, at approximately £2.5 billion, representing 10 per cent of our gross national product. The energy sector is a very dynamic one where the forces of change are very strong. Major developments include restructuring the ESB, a new peat-fired power station and the completion of the Ireland-United Kingdom natural gas interconnector. We must also acknowledge that European Union proposals for the electricity and gas sectors influence the shape and structure of the overall energy scene.
In reply to the question raised by Deputy Treacy, the European Union Commission has two months within which to take a decision on State aid for Bord Na Móna and we shall ensure that the £30 million will be made available to it.
Question put and agreed to.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.