I recently announced that the Government had approved the drafting of a Bill to establish an independent regulatory commission to oversee the electricity sector. I intend that this commission will be in place by early next year.
The current legal situation is that the ESB requires my approval under the Electricity Supply Acts for capital expenditure on any new plant. Private sector companies, on the other hand, wishing to enter the market in competition with the ESB, require a permit from the ESB under section 37 of the Electricity Supply Act, 1927. The ESB is currently in a position of operating in the market and at the same time regulating the entry of competitors.
In those circumstances, I have been advised by the Attorney General that it is essential and urgent to arrange for the immediate establishment of an independent regulatory commission to oversee the electricity sector. This commission will operate a licensing regime for operators wishing to generate and supply electricity. It will also issue authorisations for the construction of generating stations. Any proposals to construct a generating station by any party, including the ESB, will be subject to an authorisation from the commission.
The Department has undertaken an extensive consultation process to date regarding implementation of the EU electricity directive in Ireland which is due by February 2000. Proposals were published by Deputy Dukes in May 1997, a discussion forum was held in January 1998 and a further consultation document was published in May 1998. The comments received relating to the regulatory Bill were considered when preparing the heads of the currently proposed Bill and will be further considered when preparing the next two Bills.
I have had a number of meetings with interested parties regarding the proposals. These included meetings with the ESB board in April, IBEC in June, the ESB group of unions in July and August and the Small Firms Association in August. Earlier this month I met separately with representatives of both Marathon and Viridian, two potential new entrants in the electricity market. I will continue to meet anyone who wants to meet me. In addition, I have recently appointed Mr. Phil Flynn, chairman of ICC Bank, to act in a special advisory capacity to me and to report on all the steps necessary with regard to the introduction of competition in the electricity market.