Electricity Regulation (Amendment) (Single Electricity Market) Bill 2006: Committee Stage.
I call the meeting to order, the purpose of which is to discuss the Electricity Regulation (Amendment) (Single Electricity Market) Bill 2006. I welcome the Minister of State at the Department of Communications, Marine and Natural Resources, Deputy Browne, and his officials. I understand some members must attend other functions this morning. Therefore, with the agreement of members, I propose that we sit until 11.15 a.m., suspend the sitting and resume at 1.30 p.m. and continue until we finish consideration of the Bill. Is that agreed? Agreed.
Let me draw attention to an error in paragraph (ii) of amendment No. 55: "section 9 (1)(e)” should read “section 9 (1)(d)”.
SECTION 1.
I move amendment No. 1:
In page 3, subsection (1), line 15, to delete "(Amendment)".
I propose to delete the word "amendment" from the Title of the Bill because the primary subject should be qualified by the word "amendment" or the term "single electricity market", not by both.
This amendment is not accepted. The Electricity Regulation (Amendment) (Single Electricity Market) Bill 2006 is amending the Electricity Regulation Act 1999. Accordingly, the Title of the Bill is correct.
Amendment, by leave, withdrawn.
Amendments Nos. 2, 9, 19, 22 and 27 are related and will be discussed together.
I move amendment No. 2:
In page 3, subsection (2), line 19, after "provisions" to insert "subject to the agreement of all relevant parties".
We discussed a Bill where two jurisdictions were involved and how one would deal with a situation where there was a need to change, approve, agree, alter or amend a section. In this amendment I propose to insert a provision, "subject to the agreement of all relevant parties", as a protection when the need arises to change, approve, agree, alter or amend a section. This provision could mean all parties to the agreement, to the initiation and sponsorship of the legislation in the first place, the agreement of relevant bodies such as stakeholders, that is, those involved in the provision of services. I have tabled a series of amendments seeking to provide similar protection. Amendment No. 9 to section 3 is the same as amendment No. 2. In amendment No. 19 to section 5 I am seeking to insert the words ", subject to prior agreement between the relevant parties", which might not necessarily mean the same, but there is a certain crossover. The "relevant parties" may not necessarily be the same. This is ground-breaking legislation and it is important that it is beyond challenge in either jurisdiction.
Amendment No. 22 seeks the insertion of the following, "subject to the approval of the relevant Ministers in the relevant jurisdictions". It seeks to ensure Government approval would be sought from the relevant jurisdictions. I discussed this matter last week with officials from the Department. While I was enlightened during the course of that discussion, the dye had already been cast in that the amendments had been drafted prior to Christmas. I am interested to hear what the Minister of State has to say on the matter. It may be stated that it would not be possible under this type of legislation to obtain the approval of Ministers in the relevant jurisdictions. However, there must always be approval from or acquiescence in relevant jurisdictions.
Amendment No. 27 is similar to amendment No. 22 in that they both seek to introduce protections to ensure transparency and save parties from either jurisdiction from embarrassment caused by unforeseen events. There will always be people who will unwittingly come up with something that could render our situation under this legislation meaningless or cause it to be set aside.
Section 1 contains a standard commencement provision which allows the Minister to bring certain provisions of the Bill into force at an appropriate time if he or she so wishes or to commence the entire Bill on a particular day. For this reason, amendment No. 2 is unnecessary.
Amendment No. 9 proposes that the change to the definition of the Department should be subject to approval by the relevant authorities. This provision, if included in the Bill, would only have effect if the functions of the Department of Enterprise, Trade and Investment were delegated differently, thereby necessitating a change in the name of that Department. This provision in our legislation merely seeks to reflect any change in the name of the Northern Department.
Amendment No. 19 proposes consultation with relevant parties by amending the working arrangements. This will be an SEM matter and, accordingly, within the remit of the SEM committee which will decide if, how and when such amendments to the working arrangements should be made.
Amendments Nos. 22 and 27 relate to the making of regulations. The making of regulations with regard to trading arrangements is a function of the commission, as conferred on it by section 9(1)(d) of the Electricity Regulation Act, as amended. The commission is required to consult the corresponding regulatory authority in the North prior to the making of such regulations. It would, therefore, be inappropriate to subject regulations to the approval of the relevant Ministers, as this would impact on the independence of the regulatory authorities in the exercise of their existing statutory functions. I am unable, therefore, to accept the amendments.
I do not propose to divide the committee on the amendments. I merely put my case and cite the instances as presented. I do not necessarily agree with the Minister of State but only time will tell.
Amendment, by leave, withdrawn.
Section 1 agreed to.
Section 2 agreed to.
SECTION 3.
Amendments Nos. 4 and 5 are related to amendment No. 3. Amendments Nos. 3 to 5, inclusive, will be discussed together.
I move amendment No. 3:
In page 4, lines 6 and 7, to delete "Great Britain and Northern Ireland;" and substitute the following:
"Great Britain and Northern Ireland signed on behalf of the Government of Ireland on 5 December 2006 and on behalf of the Government of the United Kingdom of Great Britain and Northern Ireland on 6 December 2006;".
I will not accept amendments Nos. 4 and 5. A memorandum of understanding relating to the establishment and operation of a single competitive wholesale electricity market in the State and Northern Ireland entered into between the Government of Ireland and the Government of the United Kingdom of Great Britain and Northern Ireland was signed on foot of a Government decision by the Minister for Foreign Affairs. It was not laid before the Oireachtas. It is incorrect, therefore, to state it was approved by both Parliaments. Amendment No. 3 is a minor technical amendment inserting the date on which the memorandum of understanding was signed on behalf of both Governments.
As the substance of amendment No. 4 has been covered by the Minister of State's amendment, I intend to withdraw my amendment.
Amendment No. 5 follows the theme of what I have been preaching in the House for some time. We see parliamentary responsibility and accountability diminishing before our eyes. The amendment could prove to be important. It cannot be wrong to have to refer back to the respective Parliaments if an issue arises at a later stage.
During my time in the House I have witnessed much legislation enacted, only to fall into disrepute or be bypassed or ignored at a later stage. I can think of one or two very important pieces of legislation which have suffered in this way. It is always a safe bet to include in legislation accountability to Parliament in the respective jurisdictions. Parliament is elected by the people to serve and represent them. It is no harm to go back to Parliament every so often and bring a matter to its attention by introducing legislation, by placing documents in the Oireachtas Library or making an order in the House.
All Members have received correspondence during the past six months explaining the difference between primary and secondary legislation. I found it amusing to be given written directions regarding legislation.
I ask the Minister of State to examine the amendment with a view to dealing with the matter on Report Stage.
The memorandum has already been agreed by the two Governments. It did not require Oireachtas approval under the Constitution. It is available in the Oireachtas Library and on the website of the Department of Communications, Marine and Natural Resources.
Amendment agreed to.
Amendment No. 4 not moved.
I move amendment No. 5:
In page 4, line 7, after "Ireland" to insert "as approved by the respective Parliaments".
Amendment put and declared lost.
Amendments Nos. 6, 8 and 58 are cognate and may be discussed together.
I move amendment No. 6:
In page 4, line 8, before "licence" to insert "current valid".
I look forward to hearing the Minister of State's response.
I do not accept the amendments, as they are unnecessary. Section 14(1) of the Electricity Regulation Act 1999 refers to a licence granted to discharge the functions of a public electricity supplier. It does not prescribe a current valid licence, as this is implicit in the definition.
I proposed the amendments because the legislation needed to specify the need for a current valid licence. Elsewhere there are references that a licence may be pending or may be applied for.
In the circumstances it would be helpful if a licence was specified as being current and valid. There are those who may say the two are interchangeable, but they are not. One could hold a current licence that might not necessarily be valid or may be invalidated by something of which one is not aware. The word "current" is the issue about which I would particularly ask the Minister of State, simply because the person's licence could have expired, could have been applied for and it might not yet be current, etc.
We would take the view that a licence issued under the Act is a licence. It need not be stated that it is current.
How does the Department determine the status of the licence? As a licence is issued once, does it remain current and valid forever?
The issuing of the licence is defined under section 14(1) of the Electricity Regulation Act 1999, as amended.
I seek some clarification on that. Reading through the Bill I saw reference to a licence pending or the fact that the licence had not been issued did not necessarily mean that it would not be issued. I am not a legal expert. While I presume the matter has been well tested legally there is only one final legal test of any such matter, which is when people outside of the House go to deal with it. I am not happy with it. I will be satisfied if the Minister of State has another look at the matter and brings it back to his legal advisers to be certain that we can go ahead with it on that basis. I am not so certain about it.
Will the Minister of State clarify the matter for Deputy Durkan on Report Stage?
I will withdraw the amendment on foot of that.
I will send Deputy Durkan the details.
Amendment, by leave, withdrawn.
Amendment No. 7 is in the name of Deputy Durkan. Amendments Nos. 26, 56 and 57 are cognate and related to amendment No. 7. Amendment No. 59 is related. Amendments Nos. 60 and 61 are alternatives to amendment No. 59. Amendments Nos. 7, 26, 56, 57 and 59 to 61, inclusive, will be discussed together.
I move amendment No. 7:
In page 4, between lines 13 and 14, to insert the following:
" ‘SEM operator' means the Single Electricity Market operator;".
These all are technical amendments. I would like to hear the Minister of State's response. Before he states that they all are irrelevant and unnecessary, they are based on the best legal advice of mine. He will be reassured to hear so.
The single electricity market operator is defined in section 11 in the context of the licensing provisions for this activity. As reference to it in the definition sections proposed by amendment No. 7 does not define the activity, it does not enhance the provision and is therefore unnecessary.
Amendments Nos. 25, 56 to 58, inclusive, and 60 are not accepted as the term "single electricity market operator" is the title ascribed to the EirGrid-Sony joint venture that will carry out this function. The title of the single electricity market operator is reflected in both this Bill and the corresponding Northern Ireland legislation and must be uniform in both. Accordingly, these amendments cannot be accepted.
Amendment No. 61 proposed that the arrangements for calculating charges be subject to the approval of the authorities in this State and Northern Ireland. Calculation of charges is the activity for which the market operator is licensed and therefore the approval of the authorities in both jurisdictions is implicitly given in the issuing of the licence. Therefore the amendment is not accepted.
Despite the Minister of State's assertion that matters are in order, I believe they are not. He might come back to us again on that one.
On the point my colleague has raised, why do we say "SEM" and then "single electricity market" between operator and licence? Given that we are amending the 1999 Act, would it not be more consistent to use "single electricity market" the first time and then keep using "SEM"? There appears to be a degree of inconsistency between the two titles. I am not suggesting it will be a problem, legally, but Deputy Durkan has touched on something and perhaps matters could be tidied up for Report Stage.
It is a matter of drafting and that was the choice of words at that stage.
I am told that legally the amendment is correct and that the text as published is wrong. However, I do not want to hold up the meeting. Perhaps the Minister of State might look at it for Report Stage.
Can the Minister of State clarify the legal position?
The Deputy's amendment might be legally correct, but so is the drafting.
There is a consistency between single electricity market and the SEM committee. It seems to refer mostly to the SEM committee. Is the Minister of State saying that this is consistent, mostly, throughout the Bill?
Yes, I am. Section 8A(1) states: "There shall be a committee of the Commission to be known as the Single Electricity Market Committee or as the SEM Committee".
I do not have any problem with that. The debate between the legal and drafting eagles can take place. I do not want to hold up the business of the House, but between now and Report Stage, perhaps the Minister of State might have a quick look at that.
The Minister of State will give further clarification in this regard.
We have had experience in the past as regards the famous words "regulation" and "regulators", etc. Does the Chairman remember those?
Also there were "commissions" and "bodies appointed" to carry out particular functions. They do not necessarily always reflect the views of those who put them in place in the first instance. In order that we keep that in mind I am not much in favour of abdicating my responsibilities, and we shall do that.
Rather than responding to this now, perhaps the Minister of State might have a considered view on it for Report Stage. Is that agreed? Agreed.
Amendment, by leave, withdrawn.
Amendments Nos. 8 and 9 not moved.
I move amendment No. 10:
In page 4, to delete lines 38 to 41 and substitute the following:
"(b) Notwithstanding the definition of ‘Authority’ in subsection (1) where the electricity functions of the Authority are, under the law for the time being in force in Northern Ireland, exercisable by any other authority, Department, Ministry, person or statutory body, references to the Authority in this Act shall be construed as references to such other authority, Department, Ministry, person or statutory body, as the case may be.
(c) In this subsection ‘electricity functions’ has the same meaning as it has in Article 8 of the Electricity (Single Wholesale Market) (Northern Ireland) Order 2007.”.”.
This minor technical amendment mirrors the provision in paragraph (b) of this section which provides for a change in definition of the Department of Enterprise, Trade and Investment in Northern Ireland, should this be necessary. For example, if the functions of the Department are designated and the name of the Department is changed in Northern Ireland, this change can be reflected in Irish domestic legislation. This amendment includes the same provision for the NIAER in the event that any future change to the functions of the Northern Ireland authority requires a change to its name.
How does paragraph (c) work? Is it a reference to the order of council in other legislation that runs parallel to this?
It means that if it is changed in Northern Ireland we can reflect that change in our domestic legislation.
Would the British Parliament have to change the order to reflect what happens in Northern Ireland? If Mr. Adams and Mr.Paisley get their act together in the next month or two there will, presumably, be a Northern Ireland energy department. Is the Minister saying that would be reflected in the order of council but that we have taken account of that in subsection (b)?
Amendment agreed to.
Section 3, as amended, agreed to.
SECTION 4.
I move amendment No. 11:
In page 4, line 45, after "as" to insert the following:
"Coiste Margadh Leictreachais Aonair or in the English language".
This is similar to an amendment I tabled yesterday on the fisheries Bill in regard to the commission. It would be appropriate, in the context of the Good Friday Agreement, to provide for the Irish title. This Bill and the fisheries Bill, with which we dealt yesterday, reflect the developing all-island market. It would be good, therefore, to reflect our native language in the title.
On the fisheries Bill yesterday, the Minister agreed to examine the issue following discussion in regard to whether the title should be in Irish and in Scots Gaelic.
Scots Gaelic is the same language as Irish. For the information of the Chair, the Prime Minister of Scotland is also known as the Taoiseach.
I have discussed the matter with the officials who have taken advice from the Attorney General on this. It is to the effect that, as the SEM committee is not a new body, it is unnecessary to provide for its title through Irish.
Perhaps the Minister of State would examine the matter and return with a view on Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 12:
In page 4, line 47, to delete "be comprised of" and substitute "comprise".
This is a technical amendment and, according to my legal advisers, an improvement to the Bill. I look forward to the Minister of State accepting a number of the amendments as we proceed. It would be a nice expression of collegiality, which is particularly important as we approach general elections.
Maybe we are going to have a grand alliance, as there is in Germany, between Fianna Fáil and Fine Gael, which would be very interesting. We will have no problem in providing an opposition.
As John Wayne used to say "That'll be the day".
I read in one of the newspapers yesterday that Fine Gael had got into bed with Labour on the issue of hospital beds.
The Chair need not concern himself with that. He needs to watch what is happening on the other side of the eiderdown.
I am usually amenable to accepting amendments and advice from the far side but it may be difficult to do that in regard to this Bill. The existing wording is standard drafting practice. The proposed amendment is unnecessary. I cannot, therefore, accept Deputy Durkan's amendment.
Will the Minister of State undertake to reconsider the amendment before Report Stage? I was advised to table it by a wiser person.
Will the Deputy withdraw the amendment if the Minister of State will come back to it on Report Stage?
This was drafted by the Parliamentary Counsel and that is why it is in order.
Ministers come in with changes to drafts all the time.
Amendment, by leave, withdrawn.
Amendment No. 13 not moved.
I move amendment No. 14:
In page 4, line 49, after "time" to insert "by the relevant authorities".
The intent of the amendment has been covered in the discussion on amendment No. 2 and related amendments. I would like to hear the Minister of State's comments, although he may say it is irrelevant, irrational or unacceptable.
Let us hear the Minister of State.
I will not use the words Deputy Durkan ascribes to me.
Schedule 1A sets out how appointments are to be made to the SEM committee. Therefore, the proposed amendment is unnecessary.
Amendment, by leave, withdrawn.
As amendments Nos. 15 and 16 are cognisant, they will be discussed together.
I move amendment No. 15:
In page 5, line 4, to delete "a" and substitute "an".
This is a technical amendment. I have been advised that it is necessary.
The existing wording is correct. It refers to a single electricity market. Therefore, the proposed amendments are unnecessary.
Should one say "a" SEM or "an" SEM?
The Parliamentary Counsel informs us that "a" is the correct indefinite article.
Amendment, by leave, withdrawn.
Amendment No. 16 not moved.
I move amendment No. 17:
In page 5, line 12, after "Market" to insert "or the interests of the Commission".
There must be an amendment the Minister of State will accept.
The Deputy may change his legal adviser.
The Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, accepted three amendments yesterday.
The Minister or I will have to change our legal adviser.
I am not supposed to say anything and will be censured for this.
It is easy to provoke the Chairman.
The amendment is not accepted. The SEM committee has been established in the Bill and the corresponding Northern Ireland order and council to take regulatory decisions on the new single wholesale market. The responsible bodies are the CER in the South and the NIAER in the North. The function of the SEM committee is to take decisions in the best interests of the market, thereby establishing and operating a competitive wholesale market on an all-island basis. To take specific cognisance of the interests of the commission would be contrary to the all-island decision-making process set out in the legislation, both North and South. Therefore, the amendment cannot be accepted.
How stands the amendment?
It is debatable. As I said previously, this is new ground. It may well be, given our experiences in regard to commissions, regulators and committees, that a little consultation between the relevant bodies might be required. I do not propose to press the amendment. However, the degree to which the whole article of the legislation is deemed to go forward as one, regardless of anything that may happen in the meantime, is a new concept. It is a difficult area to chart given there is no basis on which to build. I hope the Minister is correct because I do not want to have to refer him back to what I am now saying.
Amendment, by leave, withdrawn.
I move amendment No. 18:
In page 5, between lines 18 and 19, to insert the following subsection:
"(7) The SEM Committee shall always take full cognisance of the impact of Committee decisions on household and business electricity consumers and shall refer in this matter to the relevant statutory consumer protection agencies within the Commission and the Authority.".
This amendment relates to amendment No. 13 moved earlier by Deputy Eamon Ryan on behalf of Deputy Ferris and dealing with consumers' interests on the commission. Amendment No. 20 in my name is a fall-back amendment. Amendment No. 18 relates to the SEM committee.
Concern was expressed on Second Stage — this will arise again in regard to ministerial directives — that the SEM committee will have enormous power in terms of determining basic structures and the impact of pricing on the market for consumers, North and South. I have a copy of the 1999 Act in front of me and I am aware from it what the functions of the committee are. I tried to amend a similar provision in the Energy (Miscellaneous Provisions) Bill. One section of the Act refers to final customers. Section 9(5)(a) to (e) of the 1999 Act, which is an interesting section, bundles together environmental, renewable sources of energy and consumer issues and deals with protection of the environment, production of electricity, the needs of rural consumers, the disadvantaged and the elderly and the methods of generation. It also provides that priority be given to the generation of renewable sources of energy. My colleague has tabled an extensive amendment in that regard.
SEM should take account of matters North and South when making decisions that affect household and business electricity consumers. I do not want to debate this matter at length. However, I am sure the Chairman, Minister and other members have met thousands of constituents, many of them senior citizens, who have raised with them the issue of energy pricing. I received a couple of phone calls yesterday regarding VAT levels on electricity bills, standing charges and the massive 13% increase, earlier projected to be a 20% increase, in energy prices.
There is an onus on us to provide in statutory form that the needs of household and business electricity consumers be considered. I am sure the Minister will state that the SEM is a technical committee with a technical remit in the dispatch of electricity and the creation of an efficient market. The debate on electricity has been ongoing for several years. I hope the next Government will at least ensure energy is given a lead role in its relevant Department.
There are varied views on this matter. Members will note from the debate in the European Commission that President Barroso and his colleagues appear to want to break up the national champions, the E.ONs and Endesas and so on. One could say a massive open type market could result in black-outs. One of the Commissioners warned yesterday about black-outs resulting from further deregulation. Ireland has two small markets of between 6,000 MW and 7,000 MW.
Some people feel the way things were organised in the 1990s was satisfactory and that this legislation is simply window dressing. We do not know if it will provide security of supply, renewable energy or reasonably low priced electricity. My amendments attempt to reflect these concerns. This should be done, either at this level or by amending the 1999 legislation, to give a more determined situation with regard to consumers.
In the United Kingdom a body known as Energywatch tracks prices and my Opposition colleagues and I take an interest in its activities. The United Kingdom has a deregulated market, which seems to work well. Millions of people switched in the early part of this winter, for example, when certain companies increased their prices. Nevertheless, even the Prime Minister, Mr. Blair, and his Ministers have concerns regarding market dominance in parts of Britain. We appear to be committed to this road and this seems to be the first step on the way to a two islands market. In the interest of consumers in this single two islands market, some sort of statutory consumer panel should be a requirement, at least at the level of the Commission for Energy Regulation even at the level of the single electricity market. The next Government will probably be required to legislate for the creation of a single energy regulator for the island. This is the rationale behind Amendment No. 18.
Amendment No. 20 would amend the Energy Regulation Act 1999. Consumers should be taken into account more forcibly than they have been until now. We should avoid a situation such as arose when Mr. Tom Reeves, chairman of the Commission for Energy Regulation, and his colleagues addressed the Joint Committee on Communications, Marine and Natural Resources. These amendments would allow for a more fluid situation with regard to pricing.
I support Deputy Broughan's amendment. Experience of issues of this nature teaches us the necessity for public accountability, relevance and attention to democratic principles into the arena. In the past six or seven months we saw consumer price increases that were at variance with international market trends. Those of us who complained were told this was a regulatory matter we did not understand. We were told prices could be adjusted only once a year and were given excuses as to why nothing could happen. Nothing happened until we kicked up a row. Electricity prices eventually decreased a little, but only after the original increase had been granted. In recent weeks gas prices have also decreased. In replies to parliamentary questions the Minister told Members this was a matter for the regulator. It was not. It was a function of the market place. When, from time to time, market forces impact severely on consumers who happen to be our constituents in both jurisdictions, it is wise to take into account the interests of those consumers, whether domestic or commercial. We should not lose sight of this.
The amendment is similar to amendments of my own. It will improve the Bill and should be recognised in both jurisdictions as an important democratic element in legislation which must stand the test of time.
Instances will arise where a customer is disadvantaged as a result of something said or done, or not said or done. Legislation should take account of such situations. I strongly support the amendment.
Section 9BC of the Bill states the principal objective of the Minister, the commission and the SEM committee is to protect the interests of consumers of electricity in the State and Northern Ireland, including household and business electricity consumers who have been mentioned by the Deputy. Therefore, the proposed amendment is not accepted.
The Bill is just the first step. Perhaps in the context of an all-island energy market the concept of which Deputy Broughan, in particular, spoke about could be considered but not under this Bill.
Would Northern Ireland consumers, as British consumers, enjoy better consumer protection than us? It is often stated the privatisation of Northern Ireland Electricity, Viridian, was botched and that as a result, prices were far higher in the North throughout the 1990s and into this decade. This is the negative side, on which we are embarking. Putting it in positive terms, is it not important that Southern and Northern consumers should enjoy the same protection?
The Bill states clearly that the SEM committee, in carrying out its functions under section 8A(4), is to protect the interests of consumers of electricity in the State and Northern Ireland supplied by authorised persons. The Bill is adequate to meet current needs.
My reading of it was that competition was everything. That is how section 9BC works.
Amendment, by leave, withdrawn.
Section 4 agreed to.
SECTION 5.
Amendment No. 19 has already been discussed with amendment No. 2.
I am aware of that discussion. I did not delay in the references to it.
I am sorry but I cannot allow a discussion.
This is Committee Stage and I can speak to the section. If the Chairman wants me to speak to it, I will.
I am following established procedure in the House. What I want to say is this——
Will the Deputy please move the amendment and follow procedure?
The Deputy must move it now.
Is the Chairman threatening me?
No. I am telling the Deputy what to do——
——and trying to conduct the business of the committee.
I am trying to conduct the business and have facilitated the Chairman well already. He should not lecture me on how to proceed.
Is the Deputy going to move the amendment?
If the Chairman waits until I finish the sentence, he will not have any difficulty.
No. I must ask the Deputy to follow proper procedure.
I move amendment No. 19:
In page 5, line 33, after "time" where it secondly occurs to insert the following:
", subject to prior agreement between the relevant parties".
This is Committee Stage. I am well aware of the procedure and have been around long enough to learn the hard way.
The amendment proposes to provide for the need to consult beforehand. Subsection (2) includes the words "thereafter publish the statement as so amended". I suggest the insertion of the following before that phrase ", subject to prior agreement between the relevant parties".
Amendment put and declared lost.
Section 5 agreed to.
NEW SECTION.
I move amendment No. 20:
In page 5, before section 6, to insert the following new section:
"6.—The Act of 1999 is amended by the insertion after section 9(3) of the following:
"(4) It shall be the duty of the Minister and the Commission to establish a representative consumer panel of not less than fifteen persons within the Commission for Energy Regulation which will be continuously consulted on energy market pricing policy.".".
As regards the last altercation, the Government of Iraq is looking for people such as the Chairman to try to get the new Administration there up and running, particularly given the last push by Mr. Bush.
I have a job to do, to follow the procedure. I expect every member to speak precisely to the point and not to go on and on.
That is all right. However, I can just see the Chairman in another context.
Does the Chairman believe in democracy? It would be helpful if we knew that, beforehand.
The Chairman should ignore this and just move on with the business.
When the Deputy is in this position next time, after the election, when we shall give the Opposition two or three chairmanships of committees, he can handle matters his way.
I have been in that position and never treated Members of the Oireachtas like that. I have been there and done that.
The Deputy will be in it again after the election.
The Chairman will be treated well as an Opposition spokesman.
I agree with Deputy Broughan.
To return to the business in hand, this is the same again. Deputy Ferris was obviously thinking along the same lines. It is a consumer issue. It is going back to the commission and we are just using the Bill as an opportunity to put a consumer panel in place. I suggested "fifteen persons" because he mentions trade unionists, consumer interests, households, businesses, IBEC, etc., to be lodged within the commission in some manner. Obviously the Minister of State is completely opposed to that. However, I believe the 1999 Act needs to be updated somewhat, even by virtue of what Britain or France have done in this regard.
I do not totally disagree with Deputy Broughan, but this amendment is outside the scope of this Bill. There is merit in what he says, but it is more relevant to discussions on the North-South single electricity market, SEM. It is outside the scope of this Bill at the present time.
The Minister of State should appreciate that an energy Bill provides an opportunity. As proposed legislation on electricity, this is an energy Bill. Perhaps the Minister of State might reflect on it for the Report Stage.
Amendment, by leave, withdrawn.
SECTION 6.
I move amendment No. 21:
In page 5, lines 39 to 41, to delete paragraph (b).
Can the Minister of State explain the amendment?
An amending provision in this Bill, as published, designated electricity produced from renewable sources as opposed to stations producing from renewable sources to try to protect against potential manipulation of the priority of despatch clause by generators only producing on a very small scale from renewable sources. It transpires, however, that the system can only despatch stations and the original amending provision is therefore unworkable and needs to be deleted. Deletion of that provision from the Bill by this amendment reverses the priority of the despatch clause to its current meaning in the Electricity Regulation Act, as amended.
On a point of clarification, if a peat-fired power station is using coal-fired energy with biomass, are we saying with respect to this amendment that this will be despatchable as renewable?
Is there a percentage priority on that? Could a twig be put in?
It is the same as in the 1999 Act. There is no change to that, so it is not a percentage issue.
I will check the Act and come back to this on Report Stage.
I shall get the details for the Deputy.
I thank the Minister of State.
Amendment agreed to.
Section 6, as amended, agreed to.
SECTION 7.
Amendment No. 22 is in the name of Deputy Durkan and has already been discussed with amendment No. 2.
I move amendment No. 22:
In page 6, line 18, after "and (3)" to insert the following:
"subject to the approval of the relevant Ministers in the relevant jurisdictions".
Amendment put and declared lost.
Amendment No. 23 is in the name of Deputy Durkan. Amendment No. 24 is an alternative. Amendments Nos. 24 and 25 are cognate and so amendments Nos. 23 to 25, inclusive, will be taken together, by agreement. Is that agreed? Agreed.
I move amendment No. 23:
In page 6, to delete line 31 and substitute "to be a minimum or maximum".
I thought the legislation as proposed was somewhat imprecise and referred to a threshold. I propose to insert the minimum or maximum, which could and might have to be changed from time to time, depending on what was happening in the marketplace. There are amendments in the Minister's name in which he proposes to delete the words "threshold amount" and substitute "threshold quantity". They mean the same as mine. There was obviously a meeting of minds, peculiar as it may seem, given that Ministers' and drafting people's minds seem to work at a higher level. However, it is relevant to be more precise, given possible fluctuations from time to time.
I would never be so bold as to claim that my mind works at a higher level than Deputy Durkan's. Amendment No. 23 is not accepted as this provision is subject to ministerial amendment which inserts the correct technical expressions for quantities of energy. I will be moving amendments Nos. 24 and 25 which are minor ones to insert the correct technical terms for quantities of energy as opposed to power as currently provided.
What is the difference between "amount" and "quantity"?
It is a technical term, from an engineering point of view.
How stands amendment No. 23?
Like Deputy Broughan, I have difficulty in coming to grips with the difference between the Minister's amendment and mine which is much more precise. I am, therefore, pressing it.
Amendment put and declared lost.
I move amendment No. 24:
In page 6, line 31, to delete "threshold amount" and substitute "threshold quantity".
Amendment agreed to.
I move amendment No. 25:
In page 6, line 41, to delete "threshold amount" and substitute "threshold quantity".
Amendment agreed to.
I move amendment No. 26:
In page 6, lines 50 and 51, to delete "Single Electricity Market operator" and substitute "SEM operator".
Given that the Minister of State has agreed to consider the amendment again before Report Stage, I will withdraw it. I hope he is documenting all these references.
Amendment, by leave, withdrawn.
I move amendment No. 27:
In page 6, line 53, after "Market" to insert the following:
"with the approval of the relevant Ministers in both jurisdictions".
Amendment put and declared lost.
Question proposed: "That section 7, as amended, stand part of the Bill".
If I am out of order, the Chair may pull me up and we will move on. I want to refer to the 1999 Act in the context of amendment No. 21 in the name of the Minister.
I am advised that I cannot go back to that amendment.
I will return to it on Report Stage.
Question put and agreed to.
NEW SECTION.
We now come to amendment No. 28 in the name of the Minister. Amendment No. 29 is an alternative. Therefore, amendments Nos. 28 and 29 may be discussed together.
I move amendment No. 28:
In page 7, before section 8, to insert the following new section:
8.—The Act of 1999 is amended by the insertion after section 9BA (inserted by section 7 of this Act) of the following:
9BB.—(1) (a) This subsection applies to information received by the Minister or the Commission, which information has been given to that person under or by virtue of—
(i) any provision of the law of Northern Ireland corresponding to a provision under this Act (including a condition in a licence, exemption or authorisation granted under it) or the Internal Market Regulations, or
(ii) a licence, exemption or authorisation granted in Northern Ireland by the Department analogous to a licence, exemption or authorisation which may be granted by the Commission under this Act.
(b) Subject to paragraph (c), information to which this subsection applies shall not be disclosed or published by the recipient of the information unless—
(i) that person is required or permitted to disclose that information—
(I) under or by virtue of any enactment,
or
(II) by order of a Court exercising its jurisdiction, or
(ii) such disclosure or publication is made for the purpose of facilitating the performance of any of the functions of that person under this Act.
(c) The Minister and the Commission, to the extent that each of them believes it necessary or expedient for the effective operation of the Single Electricity Market, may share information with such persons exercising a function in Northern Ireland in relation to electricity which corresponds to any of the functions of the Commission or the Minister under—
(i) the Electricity and Gas Regulation Acts 1999 to 2002, or
(ii) the Internal Market Regulations, including information which is commercially sensitive, and information which has been furnished to that person by the holder of a licence or exemption under section 14 or the holder of an authorisation under section 16.
(2) (a) This subsection applies to information received by the holder of a licence, an exemption or an authorisation, which information has been given to that person under or by virtue of—
(i) this Act (including a condition of a licence, exemption or authorisation granted under it),
(ii) the Internal Market Regulations,
(iii) any corresponding provision of the law of Northern Ireland, or
(iv) a licence, exemption or authorisation granted in Northern Ireland by the Department analogous to a licence, exemption or authorisation which may be issued by the Commission under this Act.
(b) Information to which this subsection applies shall not be disclosed or published by the recipient of the information unless that person is required to disclose or publish that information—
(i) by reason of a condition in a licence, exemption or authorisation,
(ii) under or by virtue of any enactment, or
(iii) by order of a Court exercising its jurisdiction.".".
Will the Minister of State explain the difference between the sections? They look similar but the new one looks much fuller. What is the rationale for going down this route?
Existing legislation in Northern Ireland on the restriction of information for official purposes is set out in Article 63 of the NI energy order. This provision is much more prescriptive than our domestic information restriction provisions in that it exempts the use of the information received for all purposes, excluding those purposes for which it was specifically required to be supplied. This could have the impact of preventing the CER from legitimately making information available to the authority in the North and make co-operation in the regulation of the new market more difficult were this provision to apply to all information received by the commission or Ministers, as currently provided for in the Bill. It is, however, important to continue to allow the protections prescribed in Northern Ireland law to attach to information received from that jurisdiction. The amendment will, therefore, tailor the provisions of the Bill which imports the provisions of Article 63 of the Northern Ireland energy order to our own requirements, whereby the restriction provisions prescribed will now only apply to information related to the SEM and to information received from the North. Our domestic statutory provision with regard to disclosure of information will continue to apply to all other information received.
It is difficult, as Deputy Broughan says, to compare the new section with the one it is replacing. I take it the purpose is to maintain the information restriction standards that apply in Northern Ireland but not to extend such restrictions to the South. This is complex and it is even more so because we are amending existing legislation. It seems there are two main changes. The first is in subsection (1)(b)(ii) which provides “subject to paragraph (c), information to which this subsection applies shall not be disclosed or published ... [where] such disclosure or publication is made for the purpose of facilitating the performance of any of the functions of that person under this Act”. That seems a very broad provision. It gives the SEM, the commission, the CER or the Minister a get-out clause which is broader than the previous one.
The other change in section 2(a) and particularly paragraph (b) which I read with concern is that we are now applying a restriction to the actors, the commercial holders of licences, in the disclosure of information, unless there is a condition that it must be disclosed. The implication is that they should say nothing unless we tell them to do so. I do not understand why such a restriction should apply only to companies based in the North or companies trading in the SEM. Companies such as the ESB, Viridian and others will be an integrated North-South operation. Therefore, almost all the information would be restricted. It would be hard to define which pieces of electricity were being used exclusively down in Caherciveen and which were being traded in the Single Market. I am quite concerned about this. The provision seems restrictive. I do not see how it protects existing interests. I do not see a clause — perhaps I am missing it — that provides us with the far preferable open market information systems we have.
This is in regard only to information relating to the SEM. The disclosure of information provisions in the South will remain the same.
Will this committee or its successors, or Ministers, North and South, be constrained in practice in the flow of information on what is happening in the market? Would the Ministers, North and South, be under a constraint if either wanted to give an account of how the single electricity market, SEM, operated? I am sure there will be tremendous interest in the operation of SEM when it is up and running. Will the system be constrained by the restrictive standards on information that already exist in Northern Ireland? I share the concerns expressed by Deputy Ryan.
I concur with the previous speakers. I am uneasy about the degree to which sensitivities in market fluctuations, price changes will be reflected in the way business is done. We are in uncharted waters and must take account of past experience in this jurisdiction, Northern Ireland and the UK and do what is best in the interests of all concerned. The integrity of the grid, supply and demand, and the interests of all stakeholders, of whom consumers are a very large part, are all important issues and we must ensure we do not fall into a bureaucratic trance and reach a point where we are unable to go outside the bounds of the legislation.
It has always been the policy to protect commercially sensitive information, both North and South. The restrictions on information in the North are different from the South. Under this amendment we will implement the restrictions that apply in Northern Ireland under the SEM.
A recent example is where the Commission for Energy Regulation, CER and the Minister gave provisional approval for the ESB to build a plant in Aghada, subject to conditions. A letter from the CER to the ESB, set out the detailed conditions regarding the loss of other power plant and so forth. In a similar case in the future, any operator would be able to argue in respect of correspondence from CER or SEM that the information could not be disclosed because of its market implications. Any decision by CER or SEM will have implications across the board because it will be an integrated whole island market. My fear is that it will used to clamp down on open access to information. I do not agree in principle with such a clamp down. I will give another example. Should the head of the ESB appear before a committee of the Oireachtas to be questioned on the performance of a power plant, when the provisions of this Bill are enacted, his response might be that he cannot tell us anything because of correspondence with SEM on the issue. My concern is that we may be stitching in the possibility of restrictive information which is not in the long-term interests of public policy making.
Under the FOI and SI 60, the CER would be obliged to publish the information raised in the Deputy's examples.
Does this enactment not now supersede the FOI legislation?
No. Under the provisions of amendment No. 28 subsection (2)(b) which states: “Information to which this subsection applies shall not be disclosed or published by the recipient of the information unless that person is required or permitted to disclose that information [...] under or by virtue of any enactment, or ......”
Under the provisions of FOI or SI 60, they would be so obliged.
In other words the CER is obliged under regulations to publish the information.
In what way do the provisions of this amendment to insert a new section improve the section as originally drafted? Were we constrained by the Northern Ireland provisions in the original section 8, as drafted?
It continues to give Northern Ireland the protection of its information, while it allows us to continue to operate under our system.
Amendment agreed to.
Amendment No. 29 not moved.
Section 8 deleted.
Sitting suspended at 11.05 a.m and resumed at 1.30 p.m.
SECTION 9.
Amendment No. 30 not moved.
We now come to amendment No. 31 in the name of Deputy Durkan. Amendments Nos. 35, 36, 40, 41, 63 and 71 are related and may be discussed with amendment No. 31.
I move amendment No. 31:
In page 8, line 15, to delete "the" and substitute "this".
This is a technical amendment. On the best advice of those who are legally empowered, I humbly submit it for the Minister's august consideration and hope he will see fit to incorporate it in the Bill. It is no reflection on the Parliamentary Counsel who originally drafted the Bill, but it is my supposition that this may come back to us on Report Stage with the amendment incorporated.
What about the other amendments?
Amendment No. 35 is the same. It is a technical amendment. Amendment No. 36 is similar, as are amendments Nos. 40, 41, 44, 63 and 71.
The amendments are not accepted. The existing wording in reference to the State refers to Ireland and is standard drafting practice. The proposed amendments are, therefore, unnecessary.
Amendment, by leave, withdrawn.
I move amendment No. 32:
In page 8, line 16, to delete "appropriate" and substitute "appropriate,".
How stands the amendment?
I will withdraw it, while making the point that this amendment was submitted to me on the basis of correctness.
Amendment, by leave, withdrawn.
Amendments Nos. 33 to 37, inclusive, not moved.
I move amendment No. 38:
In page 8, between lines 46 and 47, to insert the following:
"(3) The Minister, the Commission and the SEM Committee may in carrying out any of the functions mentioned in subsection (1), in a manner which each considers will promote the development of renewable electricity supplies, having regard to——
(a) the need to ensure that the origin of electricity produced from renewable energy sources can be guaranteed as such within the meaning as set out in the EU directive 2001/77/EC 2001 and that a guarantee of origin may be issued to this effect in response to a request,
(b) the establishment of a designated body in the state be designated to supervise the issue of such guarantees of origin as set out in section 9BC(3)(a),
(c) the recognition of such guarantees of origin of renewable electricity from other Member states of the European Union as set out in the European directive 2001/77/EC 2001,
(d) without prejudice to the maintenance of the reliability of and safety of the grid that necessary measures will be taken to ensure that the transmission operator and distribution system operator shall guarantee the transmission and distribution of electricity produced from renewable energy sources,
(e) the establishment and publication of standard rules relating to the bearing of costs of technical adaptations, such as grid connections and grid reinforcements, which are necessary in order to integrate new producers feeding electricity produced from renewable energy sources into the interconnected grid, and
(f) the need for transmission system operator and distribution operators provide any new renewable energy producer wishing to be connected with a comprehensive and detailed estimate of the costs associated with a grid connection and that such producers of electricity from renewable energy sources wishing to be connected to the grid may be able to issue a call for tender for the connection work.”.
In energy policy we are always engaged in a difficult balancing act between three competing agendas, to have the most cost effective and most competitive electricity supply, to have a secure supply and, increasingly important in the light of the number of climate change reports internationally, to have an environmentally sustainable energy supply.
I am disappointed and surprised by the principal objectives and functions of the commission and the SEM committee as set out in section 9. Its principal objective, which is an honourable objective, is set out as being to protect the interests of consumers of electricity in the State and Northern Ireland supplied by authorised persons by promoting effective competition. I should probably have put down an amendment but we were cautious about the whole process given the difficulty of making broad amendments. However, anybody operating in the energy area on a policy regulatory basis must take into account environmental issues as well as security of supply and competitive issues.
The objective of protecting the environment of the State and Northern Ireland is set out in section 9(5) but that needs to be more detailed and precise in regard to a new commission or committee engaging in or following the objective of providing an environmentally sustainable policy. Reading it now, I realise the first clause in my section is inappropriately worded. I tried to replicate the wording of similar paragraphs in section 9. The main intent of my amendment is to take account of the need to promote renewable electricity supplies. It includes several directions in that regard, set out in paragraphs (a) to (f) which are taken almost word for word from the provisions of the European renewables directive of 2001, which it should be the responsibility of this committee to implement.
Article 5 of the directive requires proper labelling of electricity from renewable sources as a guarantee of origin. It also sets out the structures required to put labelling in place. Article 7 of the renewables directive sets out the need to provide for ease and consistency of connection for renewable operators who must connect to the grid. We have been provided with an opportunity in the North and South to implement as we are required to do, the provisions of the renewables directive through appropriate legislation. I understand that in the South we have introduced some of the provisions required. Legislation requires, for example, proper priority of dispatch for renewables' power supplies. My concern in an earlier amendment was that Moneypoint might take advantage of the provision if a small amount of co-fired energy were included in it. The provision does not exist in the North, however, which is one area in which we are ahead. Where we are behind is in the area of connections. Proposed subsections (e) and (f) are an attempt on my part to include in legislation a requirement on system operators as monitored by the commission, to have consistent costing and flexible arrangements in the provision of grid connection. We do not have that currently and it is increasingly difficult for renewable operators to source the finance for projects as they cannot definitively set out to lenders the rules, costs and timetable for transmission. It is a crucial issue.
My proposed subsections (a) and (b) recognise the importance of clear guarantees of origin of electricity supplies. There could be myriad reasons they are required. For example, a person might seek to sell on renewable electricity as a green source of energy. The emissions trading system is also relevant. It is good and proper practice to implement the renewables directive’s provisions on origins, but we have failed to do so. My amendment seeks to address the matter, though I recognise fully that it may need re-wording. The opening paragraph does not read with the clarity I thought it did when I put pen to paper. The legislation is lacking. It will be a retrograde step to fail to take environmental issues seriously or consider the development of renewable energies as our priority in both jurisdictions on the island. My amendment seeks to recognise these realities and to provide a tangible means to improve the delivery of renewables.
I support the amendment on the basis that it emphasises the developments currently taking place. Deputy Ryan's amendment draws attention to renewables as a fact of life that must be taken into account as we proceed. Access to and availability of renewables and access to the grid for producers are important. The security of the grid is equally important, not only for consumers directly affected in a particular area, but for consumers across the entire island.
The matters raised are not suited to a Bill whose specific subject is the SEM. While there is considerable merit in the issues raised by Deputy Ryan, the Bill represents merely the first step in the introduction of all-island legislation. The matters raised can be considered in the context of renewables policy and brought forward in renewables legislation. Sections 4B and 5A make provision for consideration of environmental matters in the SEM context.
Guarantees of origin of renewable energy supply apply especially where a new trading system operating under different regimes is introduced. If this is not appropriate legislation in which to consider proper guarantees of origin, I do not understand where the issue might be raised.
While I support the concept of developing an all-island market and can see the sense it makes in an energy context, my broader concern is that we are attempting something difficult in a complicated market. The difficulties are manifold. There are certain circumstances for which we are not legislating like, for example, the different emissions trading regimes that exist North and South of the Border. Different support mechanisms exist North and South of the Border for renewable energy supplies, especially. On one side, there is a feed and fixed price tariff while on the other there is a renewables obligation certificate. It behoves us, therefore, to ensure where possible that we have standardisation.
It is especially necessary when we are entering into market trading arrangements that renewables suppliers are given a competitive advantage to allow the industry to develop. Legislation is required to do so. The renewables directive was introduced by the European Union in 2001, since which time five years have passed. Advantage should be taken of any legislation in the energy area which can accommodate the appropriate implementation of the directive. I do not understand what we have to wait for before we implement the renewables directive. The Bill could be put to good effect as a reasonable opportunity to implement such provisions. I have been specific rather than seeking to adopt the entire directive.
The development of guarantees of origin is an obligation addressed to each member state in Directive 2001/77/EC on the promotion of renewable energy sources of electricity and the internal electricity market. The purpose of the guarantee of origin is to establish a mechanism to allow generators of renewable energy sources of electricity to guarantee to wholesale purchasers the origin of that electricity. In Ireland, electricity generating plants harnessing renewable energy sources are issued with green licences under the Electricity Regulation Act 1999. The dedicated licence is sufficient to assure wholesale purchasers that the electricity produced is from renewable energy sources. The Commission for Energy Regulation supervises the licence currently and there is no need to establish an additional designated body to administer the task. The current support programme refit for renewable energy projects in the electricity market include rules for qualifying imported electricity accompanied by guarantees of origin.
The Minister of State may have to revert to me on what is a technical matter. What are the arrangements in the North? Are similar arrangements to our regulations on green electricity in place in the North? Will the new committee on the single electricity market be responsible for the cross-Border trading aspect of green energy supply?
I will have to get the detail and revert to the Deputy.
It is difficult for us as legislators to get our heads around this new and different form of legislation. If we amend our legislation here, must the House of Commons adopt similar amendments? Might we by default legislate provisions into Northern regulations by accepting certain amendments here?
We must mirror each other to the greatest possible extent.
As the European renewables directive is a requirement common to both jurisdictions, my amendment does not ask for something which is off the wall. I have taken my wording specifically from the directive. Do we not, therefore, have an opportunity to legislate for something that makes sense for two European jurisdictions? Is there a mechanism to hear from the Northern Executive why such provisions would not be appropriate?
Under the heading of subsidiarity, we meet our obligations differently, as we are allowed to do within the European Union. I will get the details for the Deputy.
Amendment put and declared lost.
I move amendment No. 39:
In page 8, line 49, after "subsection (1)," to insert "prioritise and".
This amendment deals with the functions of the Minister and the SEM committee. In section 9BC(3), after "subsection (1)", I wish to insert the words "prioritise and", before "have regard to the interest of consumers in the State". This is similar to what I proposed in earlier amendments.
Section 9BC(1) already states that the principle objective of the Minister, the commission and the SEM committee is to protect the interests of the consumers of electricity in the State and Northern Ireland. In having regard to the interests of consumers of gas one is aiming to ensure SEM decisions that will have a minor impact on the SEM will not have a significant negative impact on the gas sector. Therefore, the amendment is not accepted.
Amendment, by leave, withdrawn.
Amendments Nos. 40 to 42, inclusive, not moved.
I move amendment No. 43:
In page 9, line 17, after "of" to insert "sustainable".
This amendment is similar to those proposed by my colleagues to earlier sections. I would like to see a mention of sustainability in this area. We live in an era when the question of sustainability pops up on a regular basis. In this groundbreaking Bill it is appropriate that the word "sustainability" should be referred to on a number of occasions. It would cover all options. A cynical observer might point out that the word was not included in the Bill, despite all of our talk on it.
The provision refers to the promotion of research and development in respect of increased efficiency in the use and generation of electricity. This includes sustainable energy sources, but it is not limited to this. The Deputy's suggestion would limit the section, as we currently have a broad base.
When Ministers say provisions would limit and isolate us, they are talking nonsense. I hope the Minister of State does not believe it. As a pragmatic politician, he must recognise this.
The Deputy is constraining us.
The purpose of the exercise is to recognise a particular theme prevalent in society. It does not isolate or undermine any concept outlined in the Bill. It might mean that it may have to be included in other areas, but I do not want to hear that it would weaken the Bill. We are around long enough to know what weakens a Bill.
The Deputy has had experience in government. Did he have difficulty with civil servants?
No; as a matter of fact we had a great understanding. Everyone understood I was right.
Amendment, by leave, withdrawn.
Amendments Nos. 44 and 45 not moved.
I move amendment No. 46:
In page 9, line 36, after "become" to insert the following:
"or are likely to become by virtue of their application".
I have tabled this amendment because there is a reference in the Bill to the fact that there may be a transition period when an application may be pending. This might confer certain entitlements on the applicant.
The purpose of the provision is to provide that in carrying out their functions the Minister, the commission and the SEM committee should not discriminate unfairly in terms and conditions between authorised persons or persons who are applying to become authorised persons. The proposed amendment would not add clarity to the provision and is, therefore, unnecessary.
Amendment, by leave, withdrawn.
I move amendment No. 47:
In page 9, line 46, after "electricity" to insert "generation, production or distribution".
This amendment would strengthen and improve the section by adding all electricity sectors involved. As constituted, the section does not include all the areas included in the amendment.
The proposed addition of the words "generation, production or distribution" is unnecessary, as they are implicit in the provisions as drafted.
Will the Minister of State show where this is implied?
They are implied in all the terms related to electricity generation, production or distribution.
There is a difference. In the section the words "relating to electricity" are used. How does this imply that generation, production or distribution are all incorporated? It does not tell me that.
It is stated at the bottom of page 9 that "electricity functions" refers to functions under the Bill and the internal market electricity regulations.
At section 9BC(7) the Bill states:
‘electricity function' means-
(a) functions under this Act, and
(b) functions under the Internal Market Regulations, relating to electricity;
It would be helpful to insert "generation, production or distribution".
The context is different. The Minister of State is concluding, as the Bill states in section 9BC(7), that:
‘authorised persons' means the holder of a licence or exemption under a provision of this Act relating to electricity or under any corresponding provision of the law of Northern Ireland;
‘electricity function' means—
(a) functions under this Act, and
(b) functions under the Internal Market Regulations,
relating to electricity;
My amendment changes that to "relating to electricity generation, production or distribution". It is an extension. They are two totally different meanings.
If one reads the entire Bill, one will know what are the functions. In answer to Deputy Broughan's question, this amends the 1999 Act.
Amendment, by leave, withdrawn.
I move amendment No. 48:
In page 10, to delete line 2 and substitute the following:
"acknowledge the existence of climate change and make the necessary provision to meet E.U. or World targets;".
This amendment seeks to acknowledge the existence of climate change and make the necessary provision to meet EU or world targets. This refers also to the amendments that were tabled by my colleagues under a different section. I chose this section because it recognises the regulatory conditions in the marketplace which may be affected and changed from time to time by virtue of necessity. The Kyoto Protocol may be changed. The Blair and EU initiatives in recent times may be changed. It would be helpful and important that we all recognise the existence of climate change and make the necessary provision to meet EU or world targets.
I commend Deputy Durkan for correctly spotting a clause in section 9BC(7) of the Bill which refers to "the need to guard against climate change", which is unfortunately meaningless. We are not far from knowing the precise European or world reduction targets. The new European energy policy being supported at Heads of Government level seeks an approximate reduction of 20% in emissions by 2020. Given that Ireland is at least 25% above target, in the decade from approximately 2010 when this legislation will start to take effect, we know we must reduce our emissions by one third to meet such targets or by approximately 3% per annum. As our emissions are increasing by 3% per annum at present, that would involve a 6% change. If we do not start legislating for meaningful targets and make this a serious issue rather than merely providing in the Bill to "guard against climate change", we will not address it. I would agree with Deputy Durkan. It is fundamental that we start providing in legislation for real targets and ambitions. The UK Government has balked at that; we have not even thought about it. It is about time we started.
I also support the amendment. I commend Deputy Durkan for tabling it for the same reasons. We must speak of specific action rather than referring to the issue in general terms. It is a pity Deputy Fiona O'Malley is not present because her energy document showed that, given the likely impact of reaching the temperature tipping point in the next few years, I will be coming from O'Connell Street to Dáil Éireann in a small boat. Without being alarmist, this amendment is a good provision and the Minister of State should accept it.
While there is much merit in what the three Deputies stated, this Bill deals only with the wholesale electricity market. The amendment put forward by Deputy Durkan and supported by his colleagues goes beyond the current scope of the Bill and is not appropriate to it.
To return to Deputy Ryan's amendment, surely the type of electricity generated, which would come through the SEM committee and the wholesale market, would be a core issue.
As I stated earlier, this is only the first step. The amendments being put forward by the Opposition Deputies would be more appropriate in the context of an all-island market, which I am sure will eventually happen. However, the Bill is not appropriate for what this amendment is suggesting.
I suggest respectfully that the Minister of State look at the amendment again. Section 9BC(7) of the Bill states, " ‘environmentally sustainable' includes the need to guard against climate change". Why not recognise the conditions laid down? Whether we like it or not, as my colleagues already pointed out, we need to acknowledge the existence of climate change and make the necessary provision to meet EU or world targets. That is fundamental to it. Including the need to guard against climate change is a vague reference to it. We should be much more specific and set down specifics whereby we do something about this issue which would be a contribution to the sum total thereof.
Amendment put.
The Committee divided: Tá, 3; Níl, 5.
Tá
- Broughan, Thomas P.
- Durkan, Bernard J.
- Ryan, Eamon.
Níl
- Browne, John.
- Fitzpatrick, Dermot.
- O’Donovan, Denis.
- O’Flynn, Noel.
- O’Malley, Fiona.
Amendment declared lost.
Question proposed: "That section 9 stand part of the Bill."
Regarding a possible Report Stage amendment on section 9, the Minister is considering the functions of the commission to ensure that the structure operates as it is intended and some refinement may be necessary. He is awaiting the advice of the Office of the Attorney General on this matter and may bring forward some minor technical amendments on foot of that.
Regarding that section, the Minister of State adroitly got in before me because I was about to suggest that the Minister consider it again in the context of Report Stage and attempt to ascertain if some of the amendments we have proposed might have substance and relevance.
I refer to references to "the State" in the same section, which should be considered on Report Stage. I have been advised that "this State" is more appropriate. Northern Ireland is, correctly, specifically mentioned and "the State" does not identify any particular state. The presumption is that the Bill means this State. This is new legislation and I would be satisfied if the Minister would consider whether "this State" is more precise than "the State" on Report Stage.
Question put and agreed to.
NEW SECTION.
I move amendment No. 49:
In page 10, before section 10, to insert the following new section:
10. — The Act of 1999 is amended by the insertion after section 9BC (inserted by section 9 of this Act) of the following:
9BD. — The Minister, the Commission and the SEM Committee shall have regard to the objective that the performance of any of their respective functions in relation to the Single Electricity Market should, to the extent that the person exercising the function believes is practical in the circumstances, be transparent, accountable, proportionate, consistent and targeted only at cases where action is needed.".".
This amendment is in keeping with the principles of better regulation as transposed in domestic regulation from a number of EU directives. It corresponds with a provision in the parallel single electricity market legislation that is being enacted in the North. This provides a similar net effect in the regulatory authorities in both jurisdictions and they will have to have regard to the same regulatory criteria in the exercise of functions: transparency, accountability and consistency, targeted only at cases where action is needed.
I do not want to skip ahead, but amendment No. 51 in my name seeks to delete the proposed new subsection (4A) of the 1999 Act, as proposed in section 10(b) of the Bill, and which reads:
(4A) The Minister shall not give a direction under subsection (1) where the SEM Committee has informed the Minister that the proposed direction could have a materially adverse effect on the operation of the Single Electricity Market.
I am not sure what that proposal is supposed to mean. Does the Minister of State agree that he is seeking in his amendments to bridge the difference of culture between the two markets? The small Northern Ireland market became isolated after privatisation took place in the UK market which is now strongly deregulated because it was not viewed by the British Government as a high priority. The British Government did not seem keen to integrate the operation of the Northern Ireland market with the operation of the UK market. It is obvious that the UK authorities have adopted a hands-off approach since the end of the Thatcher era. However, section 10 of the 1999 Act in this jurisdiction gave the Minister the right to issue a direction on the functions set out in the original section 9 of that Act. It is obvious that some people such as those who are authorised, licence-holders or about to become licence-holders are excluded.
During the debate on the energy Bill we expressed concern that the ability of the Minister to stand for the Oireachtas and the people could be restricted by the 1999 Act, as it stands. Therefore, I am not sure exactly how the new provisions in amendment No. 49 will work. The amendment reads:
The Minister, the Commission and the SEM Committee shall have regard to the objective that the performance of any of their respective functions in relation to the Single Electricity Market should, to the extent that the person exercising the function believes is practical in the circumstances, be transparent, accountable, proportionate, consistent and targeted only at cases where action is needed.
That is a vague formula for how the three bodies will interact. Who will decide on the "cases where action is needed"? Will it be the Minister, the SEM committee, the commission or the Northern Ireland commission?
There seems to be a cultural difference between the way we operate and the way they operate in the United Kingdom. Some would argue that the British approach is best because it has given rise to a deregulated market, certainly in England, Scotland and Wales. The British market has been competitive, with five or six major players, until recent times. On the other hand, it could be suggested the Irish market shows signs of having been dominated by a very powerful incumbent and that, therefore, we should adopt the British approach. We have concerns about the constraints we might be putting on the Minister in the South in that regard. That is why I have tabled amendment No. 51 which I will move at the appropriate time. I propose that we delete the proposed new subsection (4A) of the 1999 Act and ask the officials to come up with a different formula. I am sure they have tried to do so. We are grateful for the excellent briefing notes they supplied to the Opposition in advance of the Committee Stage debate. I know an effort was made to reach a compromise with us on the issue. I have expressed my concerns.
I echo some of Deputy Broughan's concerns. I am grateful for the briefing notes we have received. It is important to note that the powers of the regulator are being diminished. It has been mentioned that, as everyone knows, the committee has attempted on many occasions to get the regulator to be answerable to it in respect of certain issues but it has encountered many difficulties in that regard. I welcomed the decision to give additional powers to the Minister. It will be unfortunate if we have to withdraw some of them. I echo what Deputy Broughan has said about these two amendments. When we are dealing with two regulators, two markets and two states, is it not a good idea to provide for best regulatory practice? Is the Minister of State satisfied that is what we are doing?
I disagree with Deputy Broughan in one respect — I think there are many similarities between the markets in the North and South. I refer to the geographical fact that they are on the same island, for example. Both are dominated by a small number of operators. The experience in the United Kingdom is very different because of the larger market and a different competitive environment. My main concern is that it will be difficult to prove whether a duopoly is developing. Strong regulation is needed if the market is to be managed properly. I agree with my two colleagues that we need to be slightly wary. I also agree with the general principle that we should ensure that regulatory behaviour is light, proportionate, transparent and accountable, etc. Our experience of electricity regulation is that an invasive regulator, not captured by the large incumbents, is sometimes needed. I share the concern that it might not be in the long-term interests of consumers to hold back on regulatory or ministerial involvement. It relates to what I said about the amount of information available. I agree with Deputy Broughan that it will be almost impossible to know whether an appropriate light, tight or tough regulatory approach is being followed because it will not be transparent. The proposals in the legislation relating to what one can or cannot disclose will work against those who try to find out what is happening. They may make it difficult for policymakers and the media to understand whether an unregulated duopoly is developing in the absence of effective regulation. I share the concerns of my two colleagues that light regulation is not necessarily what we need. Perhaps we will need strong regulation.
I knew the Chairman was going to call me, even though he looked away when I tried to get his attention, which was an odd way to go about it.
I did not catch the Deputy's eye.
The Chairman has it now.
I share the views of my colleagues. I am puzzled because I would have thought that amendments Nos. 49 to 54, inclusive, could have been grouped together, as they all relate to the same thing. We need to consider whether amendment No. 49 in the name of the Minister which relates to the performance by the various bodies of their functions relating to the single electricity market represents an improvement on the original wording of section 10 of the Bill which referred to the 1999 Act. The Minister of State is taking it a step further in this amendment. He may have to reconsider the matter in the context of that Act and the future development of the electricity industry on both sides of the Border. It may be necessary to examine whether the provisions of amendment No. 49 require further enhancement or clarification.
The amendment is about the principles of good administration and best regulatory practice which are important, as Deputy Fiona O'Malley said. The matter of ministerial policy directives will be dealt with in amendment No. 50. This amendment deals with transparency, accountability and consistency. It is about best regulatory practice.
Is it agreed that the new section be inserted in the Bill?
I do not want to tell the Chairman how to do his job, but this matter could have been considered with amendments Nos. 51 and 52 which relate to policy directives.
Amendment No. 49 has been moved. I am asking whether——
I would like to make a further point on amendment No. 49. I have never before seen in legislation phrases such as "to the extent that the person exercising the function believes is practical in the circumstances", or "targeted only at cases where action is needed", which are found in the amendment. The Minister shot down a few of our amendments which he said merely seek to input bits and pieces into the legislation. He also said that they did not stack up legally. Perhaps he should look again at this amendment to see if the formula used could be tightened up.
The Minister could be a little more inspirational.
The reason for the language used is that there exists in the North a statutory definition of best regulatory practice which does not exist in the South.
Will the Minister of State undertake to examine the matter further for Report Stage?
The legislation needs to accommodate both jurisdictions.
We have not defined best regulatory practice in law as to do so would expose us to a judicial review.
We have so many regulators and it is about time we laid down the law.
It is a little like Texas after the American Civil War.
I am sure the next Fianna Fáil Government will do that.
That will not happen for a long time.
Amendment agreed to.
SECTION 10.
I move amendment No. 50:
In page 10, between lines 8 and 9, to insert the following:
"(a) in subsection (3)(a)—
(i) by the substitution for subparagraphs (ii) and (iii) of the following:
"(ii) the Joint Committee referred to in paragraph 26 of Schedule 1 of this Act,
(iii) the SEM Committee, and
(iv) any other person the Minister deems appropriate,",
and
(ii) to substitute "or publication under paragraph (b),” for “or such publication,”,
(b) by the insertion of the following subsection after subsection (3):
"(3A) The Minister, having provided a draft of the proposed direction to the persons referred to in subsection (3)(a) and having published a draft of that direction under subsection (3)(b), shall provide a draft of the proposed direction to the Department.”,”.
The Minister of State might address the issues we framed for him earlier in respect of amendment No. 51.
I must deal with the amendments in order.
The Minister of State said this amendment deals with the practice of regulations. How does he think this will hang with subsection 4(a)?
Section 10(a) of the Energy Regulation Act 1999 provides that the Minister may give to the commission general policy directions to be followed by it in the exercise of its functions. Before giving such directions, the Minister will publish a draft of the proposed direction and the reasons for it. Prescribed parties, including the commission, the joint Oireachtas committee and such other persons as the Minister deems appropriate, will have at least 30 days within which to make representations for consideration by the Minister prior to the direction being given, with or without amendment.
There is no corresponding power of ministerial direction in Northern Ireland. As the SEM committee, which is to regulate the market, must be able to operate in the same manner in both jurisdictions, it is necessary that the ministerial policy directions should not apply to matters relating to the new wholesale electricity market. This amendment provides for the inclusion of the SEM committee as one of the prescribed consultees to whom draft policy directions must be sent. Where the SEM committee informs the Minister that a draft policy has the potential to impact on it the Minister will not then make that particular policy direction.
The Minister is effectively trying to strengthen subsection 4(a) in that regard.
The SEM will have the last call on such matters.
The Minister of State stated that we must accommodate two jurisdictions by way of two different types of regulation and said that for this reason a little vagueness or a less specific provision must be included in the legislation. The amendment states:
"(ii) the Joint Committee referred to in paragraph 26 of Schedule 1 of this Act,
(iii) the SEM Committee, and
(iv) any other person the Minister deems appropriate,",
That is a very broad base.
It clearly states that the same conditions must be implemented North and South. There is no vagueness about this.
Where the Minister issues a directive to the CER under a function conferred on it by the 1999 Act, could the CER be required to liaise on the matter with the SEM thereby resulting in the Minister indirectly issuing a direction to the SEM?
Given the SEM will become a statutory consultee, everything will have to be referred to it.
So the SEM would simply communicate with the CER stating it will not take cognisance of the direction as provided for under subsection 4(a) as it would have a materially adverse effect on it.
It is important to bear in mind that the SEM committee communicates directly with the Minister.
Can I get clarification on that point? Once this legislation is enacted and a single electricity market has been established, will decisions such as the one taken by the CER in regard to Aghada have to be passed by the SEM committee?
Yes, if the SEM committee deems a decision will impact on it.
We will be dealing with a single market in the future. Is this not simply window dressing?
It is important to bear in mind that Aghada was approved by the CER and not by ministerial direction.
I am just giving that as an example. As I see it, there will be only one market in the future. There will not be a market in the North and another in the South. Am I right that a decision likely to be put before the CER in the future in regard to giving the green light to a plant type will have to be referred to the SEM as there will be only one market?
The Bill deals only with the wholesale electricity market.
The same market applies for the two jurisdictions in terms of gas. Our prices are UK prices plus transport costs. The CER clearly has a role in this area in relation to price increases and so on. We are, to some extent, price takers based on decisions made by Ofgem, which appears to be the overarching regulator in regard to gas.
Policy directions in the gas market will continue to apply. They will not be affected.
The Minister of State understands the point I am making.
Who is the final arbiter? What Deputy O'Malley said is true. The objective is to create a competitive market in the interests of consumers North and South. One could easily define the assessment of that on the basis of what plants are commissioned. Does the CER require approval from the SEM in regard to everything it does or does the SEM take as a given what is approved by the CER?
It will require approval for matters relating to the single electricity market. The SEM committee, under this legislation, will be the final arbiter. If it notifies the Minister that some decisions will impact on it, the Minister will not approve them.
The SEM is the new all-Ireland regulator.
Only in regard to matters relating to the single electricity market.
The wholesale electricity market is a big market.
It is an issue we can discuss again with the Minister on Report Stage. We understand where the Minister of State is coming from but we require further clarification on the matter.
Amendment agreed to.
Amendments Nos. 52 to 54, inclusive, are alternates to amendment No. 51. Amendments Nos. 51 to 54, inclusive, may be discussed together, by agreement.
I move amendment No. 51:
In page 10, lines 11 to 17, to delete paragraph (b).
I have argued already that I believe the best way forward is to ensure we retain some discretion in regard to what might be the national targets, irrespective of which parties form the next Government. I think the point my colleagues are making is that it is difficult to see how the SEM will not have an absolutely linchpin role in all of this in the future. Will it appear before a committee of the Oireachtas?
The Deputy is raising an important point.
Will the SEM go before a committee of the next Dáil or an energy committee of the Assembly in Northern Ireland? Has it been provided for in the legislation that the SEM will report to the Oireachtas? Constituents will question us on the SEM about where it will be located and so on as they are aware of the CER and the NIAER. If the Chairman were to be in Opposition in the next Dáil and had to chair an energy committee, would the SEM be appearing before it?
The SEM is a sub-committee of the CER. Obviously the CER will continue to report to the Oireachtas joint committee and will report on the SEM as well.
Will the SEM be located in the offices of the two regulators?
It will meet as required.
Will it have a permanent office?
Will it not be similar to EirGrid, which has an office with a locked door in the ESB offices? Once one goes through that door one has left the ESB.
It is a sub-committee of the CER and is not being established as a body in its own right.
It is a disestablished sub-committee.
It is very shadowy. Mr. IanPaisley Jnr. is very interested in this sub-committee.
There is nothing shadowy about the body. The SEM will publish its working arrangements and will be totally transparent.
How does a disestablished sub-committee work?
To follow on from Deputy Durkan, will the SEM operate in a way similar to the Council of State, which the President convenes when she feels there is a matter to be discussed by it, rather than duplicate the system in operation in the CER?
As matters arise, the regulators will refer them to the SEM committee for discussion.
Will there be a plaque on the door to indicate it is the SEM office?
We will know the members of the SEM committee.
Yes. I refer the Deputy to section 8B of section 5 of the Bill which states:
8B.—(1) The Commission shall publish a statement—
(a) setting out the procedures and working arrangements adopted by the Commission for ensuring compliance with section 8A(4), and
(b) describing how the Commission will work together with the Authority in the exercise of their respective statutory functions in relation to the Single Electricity Market.
(2) A statement under this section may be amended from time to time and the Commission shall as soon as practicable thereafter publish the statement as so amended.".
It will be totally open, transparent and accountable.
EirGrid started as a committee in the ESB and for a long time it stayed in the offices of the ESB. I understand the point the Minister of State is making.
Deputy Durkan's amendment No. 54 is being taken with this group of amendments.
After that debate on transparency, accountability and visibility, I am completely overwhelmed. In the context of the fluctuations in the market, we must make a specific reference to consumer needs. Everybody, North and South is a consumer. This Bill is doing a necessary job and is enlarging the market. There will be economies of scale that I hope will be passed on to consumers. I think the consumer gets forgotten in the panoply of bureaucracy and red tape and it is relevant to introduce the words "or consumer needs". The subsection will then read:
(4A) The Minister shall not give a direction under subsection (1) where the SEM Committee has informed the Minister that the proposed direction could have a materially adverse effect on the operation of the Single Electricity Market or consumer needs.
I acknowledge the Minister introduced a technical amendment, but if the section warrants the introduction of a technical amendment, it also requires a specific reference to the long forgotten consumer.
I support the thrust of Deputy Durkan's amendment. The consumer is the missing factor. With the increase in the cost of gas and electricity this month, I have received many e-mails and phone calls from very irate consumers asking me for advice on how to deal with their two monthly gas bill which had risen to between €300 and €400 and the electricity bills were heading to the same heights. The best advice I could give was that they should take the bill to the local Fianna Fáil or Progressive Democrats Deputy and tell him or her how upset they are.
Deputy Broughan might regret that advice should the Deputies get the first preference vote, having managed to sort out the bill.
The increase in the cost of gas and electricity will be one of the back issues in the run-in to the upcoming contest. We should recognise the purpose of what we have been doing since 1999 by protecting all consumers, business and domestic. It is reasonable that the interests of consumers should be incorporated into the Bill.
On a point of clarification, Deputies are aware that gas prices will come down by 10% from 1 February 2007—-
Who called for them to come down in the face of very stiff opposition and a Minister stating in the Chamber that he agreed with the increase in prices?
The Government has introduced a number of grants that are available to older people to help them pay their energy bills.
Will the Chairman explain that to people when they bring him the bill. As the Deputy stated, external factors control the price of gas and oil.
The Chairman should have prefaced his remarks by stating that he welcomed the climbdown by the Government and the regulator. In line with clearly visible market trends the Government had to acquiesce to the views expressed by the Opposition spokesperson.
Amendment, by leave, withdrawn.
I move amendment No. 52:
In page 10, to delete lines 13 to 17 and substitute the following:
" "(4A) The Minister shall not give a direction under subsection (1) where the SEM Committee has informed the Minister that the proposed direction would materially affect, or would be likely to materially affect, the Single Electricity Market.".".
Amendment agreed to.
Amendments Nos. 53 and 54 not moved.
Section 10, as amended, agreed to.
SECTION 11.
I draw the attention of members to an error in the amendment list. In amendment No. 55, "section 9(1)(e)” in paragraph (ii) should read “section 9(1)(d)”.
I move amendment No. 55:
In page 10, paragraph (a), between lines 19 and 20, to insert the following:
"(i) by the insertion in paragraph (c) of “or section 9BA” after “section 9(1)(d)”,
(ii) by the insertion in paragraph (d) of “or section 9BA“ after “section 9 (1)(e)”,”.
Section 11 of the Bill amends the current trading arrangements as described in section 14(1) of the Electricity Regulation Act 1999, as amended, to reflect the new single wholesale market arrangements being introduced by this legislation. Currently CHP and green licences are defined by reference to the existing trading arrangements and the amendment to section 11 of this Bill is to ensure that CHP and green licences are included in the new trading arrangements.
On a point of clarification in regard to our definition, I presume the green licence refers to what are commonly known as renewable energy suppliers. I return to a point I made earlier. Under our current licensing arrangements, if Moneypoint had a 5% co-fired or wood-fired system would it be given a green licence, and would that give it dispatch priority, which would give it a huge competitive advantage in any market arrangement?
If it is the case, I imagine it must be of concern to all other parties because it would mean such plants would have a very considerable competitive advantage.
We will get clarification.
If that is the case, is it appropriate for us to put in percentages in this Bill to define a green energy source? It would be important to do it.
That is being examined at the moment in accordance with renewables policy.
So it will not come here.
Is the amendment with the typographical change agreed to?
I have a general question. Obviously everybody on this side supports the process being attempted here. It is a complicated one with six bodies involved in negotiations as well as legislative bodies. Most of the amendments come before this committee first. Do the Houses of Parliament at Westminster have a similar procedure in terms of a Committee Stage? Are we in advance of that in terms of the whole process? In the context of certain of the concerns that have been outlined here, the amendments the Minister proposes seem to be quite extensive. We welcome some of them and some we might question. We are very much part of a flexible process in that this House is legislating a very much different Bill on Committee Stage than appeared on Second Stage. I do not object to the amendments, but I did not expect the extent of them. I hope there will be a reciprocal arrangement whereby, as the amending body here, something we believe could materially benefit the Bill and what we are doing on Committee Stage can trickle through to Report Stage and to the procedure at Westminster.
I understand a Bill will be before a committee in the House of Commons on 26 February, and the House of Lords on 27 February. I also understand that if it is sought to amend the Bill it falls.
Has the Bill been published yet?
Any amendments made here can be reflected before 19 February.
There are opportunities on Second, Committee and Report Stages.
It is published. The consultation process has taken place. Some amendments have been made on foot of that.
We on this side of the House are encouraged not to amend anything because we are the "plebs" in this business. The Minister, on the other hand, has, in his wisdom, introduced a certain number of amendments that I presume arose from discussions he had with Northern Ireland authorities. What Deputy Ryan is trying to find out is whether amendments proposed by the Minister and any amendments accepted from the Opposition will be reflected on Second, Committee or Report Stages of the Bill that is likely to be introduced in the House of Commons?
They will be reflected by an order in council and taken on board.
The point I am trying to make is that we hope there will be flexibility on the other side as well in terms of issues raised here——
The answer to Deputy Durkan's question is "Yes".
——and that possible further amendments will be considered. This is obviously an issue that affects the process more than usual because there is almost a two-stage process and because so many bodies are involved in the setting up and public consultation. I am happy to accept amendments and to make this Bill as good as it can be, as long as we are not merely a clearing house for negotiations.
Until 19 February the order in council can reflect proposed changes.
If changes were made after that, which we felt were not acceptable or needed to be teased out, we could not return to the issue. That is the problem.
It is not amended in Westminster. It is either passed or falls in its entirety.
Because it is an order in council.
Arising from the last two questions, will the Northern Ireland authorities be aware of some of the amendments we tried to make and which were rejected?
To be helpful to the committee, it is important we acknowledge that there are three members from the Department of Enterprise, Trade and Investment in Northern Ireland present, Mr. Hughes, Ms Flanagan and Mr. McNally who have not left the Gallery since the sessions began. I have no doubt they are very interested in all of the submissions made by members and that the transcript of proceedings will be helpful to them when they are processing their Bill. It is open to members, particularly members of the Opposition, to travel to Westminster on behalf of the committee to observe the procedure there. I have no doubt that would be facilitated by the Houses of Parliament. I had the pleasure of travelling last year with the director of committees and my clerk to meet the culture committee there. We can discuss this at the joint committee, but if any of the members of the committee wish to travel to observe the passage of this Bill through the various Stages in the Houses of Parliament, they are more than welcome to do so.
More could not be expected. However, that was not my question.
Obviously, all the amendments which are made here will have to be discussed with our Northern counterparts and agreed.
That was not my question. I was trying to ascertain whether our colleagues in Northern Ireland would have had knowledge of the unwise things put forward here. While I respect fully that they are well represented here by the officials who have sat with us as observers all day, we should not have to go to the House of Commons and they should not have to come to us. We should be left to ourselves while consideration of our work would follow from the co-ordinating body. I would be happy if everybody was aware of what we said and the context in which we said it. They can then judge for themselves whether we were right or foolish and write to tell us off. They could also suggest we look at things again.
Reasonable amendments from the other side of the House which we considered accepting were discussed fully with our Northern Ireland colleagues.
Were they discussed before the Minister of State came to the committee?
The officials discussed them.
The bottom line about today's and yesterday's Bills is that they represent new territory. Typically a Bill is considered by the Dáil and Seanad only, but this process is like an international treaty negotiation. It is breaking new ground. The Chairman's suggestion is quite a good one in that context.
I am being cautioned by the clerk that we must move on. We might discuss the matter as a joint committee and perhaps invite members of the relevant committee in the UK to watch Report Stage in the Dáil. Some of our members might decide to go to Westminster. It would do no harm to engage with them. Whether that is appropriate or not is a matter for the clerk and departmental officials to advise us on subsequently.
Amendment agreed to.
Amendments Nos. 56 to 58, inclusive, not moved.
I move amendment No. 59:
In page 10, to delete lines 40 to 42 and in page 11, to delete lines 1 to 3 and substitute the following:
" "(15) For the purposes of this section a person acts as Single Electricity Market operator if the responsibilities of that person include responsibility, pursuant to the Trading and Settlement Code under the Single Electricity Market, for calculating charges and other payments due under that code.".".
Amendment agreed to.
Amendment No. 60 not moved.
I move amendment No. 61:
In page 11, line 3, after "arrangements" to insert the following:
"subject to approval by the authorities in this State and Northern Ireland".
The amendment seeks to replace the words "the State" with "this State". I have already received an undertaking from the Minister of State to the effect that the change will be considered on Report Stage in the context of the legal position. I seek not to be pejorative but to ensure that what we do is correct and stands up from the European, UK and domestic points of view.
Amendment, by leave, withdrawn.
Section 11, as amended, agreed to.
SECTION 12.
I move amendment No. 62:
In page 11, line 22, after "the" where it secondly occurs to insert "generation system".
I would like to hear the Minister of State's views on the subject first. He nearly always tells us afterwards that he does not agree with us. Let us hear from him beforehand.
This amendment is not accepted. The general terminology for referencing electricity systems includes "transmission" and "distribution". As there is no generation system, the amendment cannot be accepted.
Why then do we refer to the generation of electricity every day? We refer to the distribution and transmission in everyday language too.
Section 14 of the 1999 Act refers to generation and supply. The matter evokes the earlier debate. The type of generation used impacts on price mechanisms in the wholesale market.
Transmission and distribution are recognised as systems. Generation is the production of electricity, rather than a system. It is not, therefore, referred to as one.
I can just imagine people smiling in the drafting section when they drafted the provision. I imagine they said it would really set us back an inch or two. I suggest the additional wording in the amendment would serve to strengthen the section. Some people refer to generation systems while others refer to the transmission or distribution systems. In this case, all three are mentioned, which must prove more encompassing than the current provision. It is a necessary amendment.
As I have said, "transmission system" and "distribution system" are technical terms while "generation system" is not.
It is possible someone might point out that we have failed to mention "generation" and that his or her definitions of "transmission" and "distribution" do not match ours. I have seen several references to "generation".
Transmission system operators and distribution system operators are defined in the legislation. There is no such thing as a generation system operator.
Therefore, it is not technically acceptable.
One could theoretically say that transmission and distribution are the same thing while generation is something different. "Transmission" entails the transmitting of something from one location to another. If one distributes something, it is from one location to another. Before those actions occur, generation of the electricity must take place.
That is how it is defined. There is no legal definition for "generation system operator".
There has not been up to now, but there may have to be later. I will withdraw the amendment if the Minister of State will reconsider the matter in the context of the definitions applicable in the UK and Northern Ireland.
Amendment, by leave, withdrawn.
Amendment No. 63 not moved.
Amendment No. 68 is related to amendment No. 64 and an alternative to amendment No. 67. Amendments Nos. 64, 67 and 68 may be discussed together, by agreement.
I move amendment No. 64:
In page 12, line 12, after "State" to insert "or the law of Northern Ireland".
I am introducing something that may or may not militate against the interests of the authorities and consumers in Northern Ireland. I have proposed the insertion of that addition of the laws of Northern Ireland because it strengthens the possibility of us recognising that there are two sides to this Bill. We should refer to them in the Bill.
Amendment No. 64 is unnecessary as section 14A (1)(e) provides for determining the terms in which new contracts or arrangements are to be entered into, including terms for contracts or arrangements to be governed by law other than the law of Ireland. This means that there is no limitation on the law which may apply to such new contracts, and the amendment is therefore unnecessary.
Amendment No. 69 proposes that the commission shall publish any modifications under section 12 of this Bill in such manner as it considers appropriate as required by the laws of this State and Northern Ireland. The requirement of the relevant laws is that the commission shall publish any modification in such manner as it considers appropriate, and the amendment is therefore unnecessary.
The purpose of amendment No. 67 is to provide traditional powers for the CER with regard to licensed modifications, leading up to the establishment of the SEM committee. Section 12 currently provides for consultation with regard to licensed modifications. Following enactment of this Bill, such matters will be the remit of the SEM committee. This amendment allows the commission to carry out its functions with regard to consultations and modifications for licences, having regard to the SEM criteria, until this becomes a function of the SEM committee. If the CER did not have this transitional power, modifications for licences between now and the beginning of the new market would have to be based on the existing criteria which will be incompatible with the new market modification process. A modification process would have to be undertaken again within a very short timeframe.
This is about the modification of licences. Does that imply that the actual starting date of SEM could be two years after the Bill is passed? If there were difficulties and it could not happen, why was a time-specific issue included? Three or four subsections were removed and six new subsections were added. In practice, what does the two-year period mean as we run into the starting date of the market?
The two-year period deals with the run of existing licences. That mirrors the same period in the North.
We would then be into territory where all wholesale electricity is going through the SEM.
I will withdraw my amendment to save time, though there is a valid case to be made for it. Incidentally, some of the amendments brought in by the Minister of State relate to amendments that we have proposed in other sections in the Bill.
I do not know of any amendments that were hidden.
Amendment, by leave, withdrawn.
I move amendment No. 65:
In page 12, line 21, after "conditions" to insert the following:
"subject to scrutiny by the relevant Parliamentary bodies".
There should be a certain amount of parliamentary scrutiny. It is always a safe bet. The Minister of State will say that he and his opposite number are the scrutineers. We recognise that. The Minister of State will also say that the papers will be lodged in the Oireachtas Library, and we are delighted to hear that. However, it is imperative in a modern democracy that the ordinary parliamentary scrutineers have some function in matters that have such a broad impact on the economy at large, both North and South.
If we were dealing with the old system, I would not agree with Deputy Durkan. We cannot have micromanagement if we are going to have an effective governance system. That debate was held yesterday in the health area, when we discussed to what extent the Minister and the head of the HSE are the ultimate arbiters. I feel it must be the Minister. In regard to licences, we could say that we either let CER do its job or we do not. However, given the fact that there is a cross-Border element to this issue with the SEM committee, I have some sympathy for Deputy Durkan's point. We are entering new territory. In the gas market, we are entering a world over which we have little control and Parliament will ultimately be cut out of the equation. I have sympathy for the amendment in the circumstances of this Bill, but I generally feel that the regulator should regulate.
The commissioner is already accountable regarding the performance of his duties to the joint committee of the Oireachtas. The proposed amendment would add an unnecessary layer to the day-to-day business of the regulator. Therefore, the amendment is not accepted.
All it states is "subject to scrutiny by the relevant Parliamentary bodies". That means both sides.
Amendment, by leave, withdrawn.
I move amendment No. 66:
In page 12, line 27, to delete "appropriate." and substitute the following:
"appropriate,
(c) the relevant Parliamentary Representatives.”.
The Parliamentary Counsel is satisfied that the drafting is correct as it stands. There is no requirement to replace a full stop with a comma, as proposed by Deputy Durkan. Therefore, the amendment is not accepted.
In previous amendments, the Minister of State inserted two commas and a full stop. I know that the conventional wisdom is on that side of the House. Notwithstanding that, we occasionally make an odd foray into that area ourselves.
Amendment, by leave, withdrawn.
I moved amendment No. 67:
In page 12, to delete lines 31 to 51 and substitute the following:
"(6) Notwithstanding section 8A(4), consultation referred to in subsections (4) and (5) may, subject to subsection (8), be performed by the Commission otherwise than in accordance with section 8A(4) where such consultation is performed jointly with the Authority.
(7) Notwithstanding section 8A, modifications under this section may, subject to subsection (8), be made by the Commission otherwise than in accordance with section 8A(4), but in such event it shall consult the Authority before making any such modification.
(8) Subsections (6) and (7) shall cease to have effect where the SEM Committee referred to in section 8A has been appointed in accordance with Schedule 1A, but without prejudice to any things done or steps taken prior to those subsections ceasing to have effect.
(9) The Commission shall publish any modifications under this section in such manner as it considers appropriate.
(10) The power of the Commission to modify a licence under this section may not be exercised after the end of the period of 2 years beginning with the day on which this section comes into operation.
(11) Subject to subsection (12), nothing in this section prejudices the generality of any other power to modify a licence, and nothing in subsection (2) or (3) prejudices the generality of subsection (1).
(12) Where a licence is modified under this section sections 19 to 22 and sections 29 to 31 shall not apply in relation to any such modification.".".
Amendment agreed to.
Amendment No. 68 not moved.
Section 12, as amended, agreed to.
NEW SECTIONS.
I move amendment No. 69:
In page 12, before section 13, to insert the following new section:
13.—The Act of 1999 is amended by the insertion after section 36 of the following sections:
"36A.-(1) Subject to subsection (2), within such time as the Commission may direct, the Market Operator shall prepare a statement for the approval of the Commission setting out the basis on which charges are imposed in relation to participation in the trading arrangements under the Single Electricity Market (in this section referred to as ‘the trading arrangements').
(2) The Commission may give directions to the Market Operator from time to time in respect of the basis for charges imposed for participation in the trading arrangements.
(3) Notwithstanding the generality of subsection (2), directions given by the Commission under this section may provide for—
(a) the methods of charging to be included in the statement to be prepared by the Market Operator,
(b) the form and extent of information to be provided by the Market Operator to persons participating in the trading arrangements,
(c) the form of charges and information about those charges to be included in the statement to be prepared by the Market Operator,
(d) the procedure to be adopted in the submission by the Market Operator of a statement of charges and the approval by the Commission of such statement, and
(e) the nature of information to be provided to persons seeking to participate in the trading arrangements, and the presentation and transparency of that information, and the Market Operator shall comply with directions given by the Commission under this section.
(4) Charges relating to participation in the trading arrangements shall be calculated in accordance with directions given by the Commission under this section so as to enable the Market Operator to recover—
(a) the costs and expenses directly or indirectly incurred in operating the trading arrangements, and
(b) a reasonable rate of return on capital expenditure included in such costs.
(5) The Commission, solely, will determine what constitutes a ‘reasonable rate of return' referred to in subsection (4)(b).
(6) In this section and in section 36B, ‘Market Operator' means the holder of a licence to act as the Single Market Operator granted under section 14(1)(j) or a person granted an exemption from the requirement to hold such a licence pursuant to section 14(2F).
36B.—(1) The Market Operator shall send each statement prepared in accordance with section 36A to the Commission for its approval (in this section referred to as ‘the Statement') and the statement, and in particular any charges referred to in it, shall not apply until such time as it has been approved by the Commission.
(2) The Commission shall consult with the Market Operator and have regard to any submission made by the Market Operator to the Commission prior to making a decision as to whether or not to approve, as the case may be, a statement submitted by the Market Operator to the Commission for approval.
(3) A statement and, in particular, charges referred to in it, shall not take effect until such time as it is approved by the Commission, subject to such modifications, if any, as the Commission considers appropriate.".".
Section 11 provides for the appointment under licence of a market operator to carry out on a day-to-day basis the trading and settlement of the new single electricity market. Functions of the market operator will include, inter alia, to develop, operate and maintain the trading and settlement system, to carry out the function and duties assigned to it in the trading and settlement code and perform the tasks required of it in the trading and settlement code, to plan the future development of the trading and settlement system to enable it to support the administration of the settlement arrangements, and implement such plans. This function will initially be jointly carried out by the transmission systems operators, TSOs, that is, EirGrid in the South and SONI in the North.
This amendment, which inserts a new section, is to allow the market operator to recoup costs incurred by it in facilitating participation in the trading arrangements under the SEM. It requires that a statement is approved by the commission setting out the basis for such charges.
It is an interesting amendment. One might ask why we did not include such a provision in the 1999 Act. At that stage I suppose we had only one monolithic system and the idea of a market operator, other than the incumbent, did not really arise.
It states, in section 36A(4), that charges relating to participation in the trading arrangements shall be calculated in accordance with directions given by the commission so as to enable a market operator to recover "a reasonable rate of return on capital expenditure included in such costs", and that the commission, solely, will determine what constitutes a "reasonable rate of return". Is that an area to which the Minister of State should have given some thought in the schedule because in the Energy (Miscellaneous Provisions) Act 2006 we included a definition, not of rate of return but of elements of the markets involving a couple of mathematical formula, to determine how companies could operate in an increasingly deregulated market? Would it be better at the next Stage to define that, perhaps by reference to legislation in Europe or in other jurisdictions? Other than that, it is a reasonable insertion that certainly gives a bit of body to the 1999 Act.
It mirrors the provisions of the 1999 Act for the transmission systems operator in the market operator function for the SEM.
Should the Minister of State have defined that? Maybe it is a matter to which we will return on Report Stage.
The Bill sets out the functions of the market operator.
The Minister of State may want to return to it.
Amendment agreed to.
I move amendment No. 70:
In page 12, before section 13, to insert the following new section:
14.—The Act of 1999 is amended by the substitution for section 38 of the following section:
"38.—(1) On and after the commencement of this section, and at such intervals as the Commission may direct, the transmission system operator shall prepare a statement, (to be known and in this Act referred to as a ‘forecast statement') based on the information available to it, in a form approved of by the Commission.
(2) A forecast statement shall include forecasts in respect of capacity, forecast flows and loading on each part of the transmission system of the transmission system operator and fault levels for each electricity transmission node together with:
(a) such further information as shall be reasonably necessary to enable any person seeking use of the transmission or distribution system to identify and evaluate the opportunities available when connecting to and making use of the transmission or distribution system;
(b) a statement identifying those parts of the transmission system of the transmission system operator most suited to new connections and to the transport of further quantities of electricity;
(c) the generating capacity which is likely to be connected to the transmission system;
(d) the demand for electricity in the period to which the statement relates; and
(e) a statement on the demand for electricity generated from renewable, sustainable or alternative sources generally and a statement on arrangements for the supply of electricity to customers who have opted to purchase such electricity.
(3) The transmission system operator may revise from time to time the information set out in and, with the approval of the Commission, alter the form of each forecast statement and shall, at least once in every year, revise such statements.
(4) The transmission system operator shall give a copy of a forecast statement and of each revision of the forecast statement under subsection (3) to the Commission.
(5) Subject to subsection (6), the transmission system operator shall give a copy of a forecast statement or, as the case may be, of the latest revision of the forecast statement, to any person who requests a copy of such statement or statements within fourteen days of the date that the request was received.
(6) The transmission system operator may, with the prior consent of the Commission, omit from a forecast statement given under subsection (4) any confidential details as to the capacity, loading or other information, where disclosure of that information would, in the opinion of the Commission, prejudice the commercial interests of the transmission system operator or any other person.
(7) The transmission system operator may make a charge for each forecast statement given under subsection (4) of an amount which shall not exceed the maximum amount specified by the Commission for the purpose of this subsection.
(8) In this section the period to which the forecast statement relates shall be seven calendar years on and after the date on which the statement is prepared by the transmission system operator.
(9) The transmission system operator shall consult with the Northern Ireland System Operator on each occasion when it prepares, alters or varies a forecast statement.
(10) The preparation of any plan in accordance with this section shall, so far as practicable, be co-ordinated with the preparation of any equivalent document prepared by the Northern Ireland System Operator and such plans shall, so far as possible, be prepared on a consistent basis.
(11) In this section:
‘Northern Ireland System Operator' means the holder of a transmission licence granted under Article 10(1)(b) of the Electricity (Northern Ireland) Order 1992 and who is, from time to time, designated by the Authority as the transmission system operator for Northern Ireland.”.”.
This is a technical amendment inserting a new section that will expand the existing provisions of the Electricity Regulation Act, as amended, to allow the CER to work together with the NIAER to bring forward joint estimates of capacity, forecast flows and loading statements for SEM purposes.
It requires the transmission system operator EirGrid to produce a statement to be known as a forecast statement, the purpose of which is to give operators in the market or those considering establishing in the market sufficient information to enable them to plan their enterprises. The statement will be a forecast of the system looking seven years ahead. The requirement to have the statement approved by the commission reflects the importance of ensuring that the proposed market entrants are given all available relevant information and ensuring there is a level playing field.
It is an interesting section because it encompasses some of the amendments tabled already by the humble members on this side of the House which will be covered later. We welcome this new section.
I draw the Minister of State's attention to the introduction of the words "generating capacity". Generation, a word that was struck off the list a few minutes ago, is back in business here.
The system is not mentioned.
Transmission is also mentioned in several places. It features in sections 38(3), (4), (5), (6), (7) and (9).
This section is of particular importance because it refers to forecasts, the load, the capacity of the system to meet requirements and, ultimately, the degree to which it will be possible to meet the needs of the consumers. There is no great reference to consumers' interests at all throughout, but this is the bones of where the consumers' interests will be best served.
I also note it contains the reference that "Northern Ireland System Operator" means the holder of a transmission licence granted under Article 10(1)(b) of the Electricity (Northern Ireland) Order 1992 and who is, from time to time, designated by the Authority as the transmission system operator for Northern Ireland, which is a recognition of what I suggested to the Minister of State earlier, that it is no harm to make specific references to all that the legislation is supposed to encompass and leave nothing vague. We need to include, recognise, present and deal with matters which have arisen heretofore or are likely to arise. In so far as it goes, I welcome this section as an important and helpful addition.
It replicates to a large extent section 38 of the Electricity Regulation Act 1999. On the earlier discussion on renewables, perhaps the opportunity should have been taken, using the old section the Minister of State has replicated here as "a statement on the demand for electricity generated from renewable, sustainable or alternative sources generally and a statement on arrangements for the supply of electricity to customers who have opted to purchase such electricity", to include the policy of the two Governments to move electricity generation down the renewables road. There has been much discussion on this. All the parties have published reports on energy. The Government published a Green Paper and we all have made submissions to the White Paper, which I presume the Minister will publish before he leaves office.
There is a percentage of renewables that might be taken through the system. We all are familiar with reports, for example, from Airtricity stating the kind of commitments into which that company wants us to enter, not only through cross-Border initiatives but also east-west interconnectors. Such commitments would involve the company becoming an exporter based on its renewables capacity.
One of the statements received on a daily basis from the Department over the Christmas break told us that our generation from renewables had passed the 1,000 MW level. If it was all to come on stream, I gather there are in the pipeline up to 3,000 MW, which, with the intermittency of wind at present, we clearly could not use. I wonder would this have been an opportunity — it did not occur to us because we did not realise that the Minister of State would recast the entire section — to build on that. This section is a good inclusion and I agree with Deputy Durkan that it is good to transmute it and bring Northern Ireland into it.
We all are familiar with using the EirGrid capacity statement. EirGrid forecasting has been valuable. We are familiar with the 5% per annum rule and have a rough idea of that for which we are trying to plan for 2010, 2020, etc.
The other point about energy we have realised through this committee is that one must think of generation with a long term view. However, I note there are no sanctions in the 1999 Act or in this new section where EirGrid, or SONI, gets it wrong.
I am not familiar with the System Operators Northern Ireland, SONI, ones but the last EirGrid report contained terrible warnings of a blackout in 2009 that the media faithfully reported. This is a serious responsibility and it depends on the Government because whoever is Minister in 2009 will be in a lot of trouble with the public if there is a blackout. Security is the very least one can expect of an electricity system. We are talking about security of supply, given the expansion of the economy and the development of the economy in Northern Ireland. It has turned a corner and is growing in tandem with that in the South. We are moving towards an all-island energy market. Should we be able to sanction the operator if it gets this wrong and fails to ensure sufficient electricity is generated? Suitable conditions for new entrants must be created. In general, a secure, competitive market is needed. Above all, when it is time to turn on the lights or the heating, people will be upset if there is not sufficient energy available.
A very important section has been introduced but we could have strengthened the renewables aspect which has an impact on security of supply. Also, should Parliament be able to insist that these highly paid operators and forecasters deliver the goods?
The only difference is that the Minister will not be concerned about what happens in 2009.
I note what Deputy Broughan said about sanctions and we will come back to him on the issue.
Regarding renewables, section 9(4)(b) of the Bill seeks “to secure a diverse, viable and environmentally sustainable long-term energy supply in the State and Northern Ireland”. Section 9(5)(a) takes account of “the effect on the environment in the State and Northern Ireland of the activities of authorised persons”, while section 9(5)(b) mentions “the need, where appropriate, to promote the use of energy from renewable energy sources”. The sentiments expressed by the Deputy are stitched into the Bill.
The opening of the market was announced in 2005. I think Airtricity was giving householders a choice but suddenly Dr. Eddie O'Connor removed this choice. We know Viridian well because it has liaised closely with this committee and we have met its representatives through the years. Will the single electricity market, SEM, deliver in order that everyone in this room will be able to switch to Viridian? Regardless of prices and inputs, the Energy Minister in the United Kingdom always seems to think switching supplier is the key power that consumers have. When would we see a practical realisation of this? This is not the exact point in the Bill but it is something in which consumers have an interest.
My colleague referred to a fear of a duopoly involving the ESB and Viridian with the two companies looking after each other and scratching one another's back. At least we now have Vodafone, O2, 3 and Meteor in the competitive mobile phone market. When can we look forward to real benefits from this proposed legislation?
We are dealing with the wholesale market. Discussions with our Northern brethren on the retail market are further down the line.
Will new legislation be required? Viridian has supplied commercial customers and there are a few smaller operators. What is all this about? I mentioned the mobile phone market because through the years this committee has been unhappy with how it has operated. At least, if one is with Vodafone, one can switch to Meteor, O2 or 3. We are tied to a single operator in the electricity market.
There are 21 further amendments to be discussed and I am conscious that we should finish before the Order of Business commences.
The Minister of State might come back to the idea of sanctions on Report Stage.
Amendment agreed to.
Amendment No. 71 not moved.
Section 13 agreed to.
NEW SECTION.
I move amendment No. 72:
In page 13, before section 14, to insert the following new section:
14.—The Act of 1999 is amended by the insertion after section 34A (inserted by section 8 of the Energy (Miscellaneous Provisions) Act 2006) of the following section:
34B.—(1) Where the Single Electricity Market is in operation the Commission may direct the transmission system operator to seek to enter into and maintain in force such arrangements as are necessary to—
(a) enable the transmission system operator, subject to such terms and conditions as may be specified by the Commission in any direction, to offer any person who makes an application pursuant to section 34(1), an agreement for connection to the transmission system or use of the All-Island Transmission Networks,
(b) enable the Northern Ireland System Operator to offer any person who makes an application to the Northern Ireland System Operator, an agreement for connection to the Northern Ireland Transmission System or use of the All-Island Transmission Networks.
(2) The Commission may make regulations for the purposes of subsection (1).
(3) Without prejudice to the generality of subsection (2), regulations under subsection (2) may—
(a) prescribe those matters in respect of which the Commission may make directions including, without limitation, directions in relation to—
(i) the basis upon which payments are to be made by the transmission system operator to the Northern Ireland System Operator and by the Northern Ireland System Operator to the transmission system operator, in each case in relation to connection to the transmission system, connection to the Northern Ireland Transmission System and use of the All-Island Transmission Networks, and
(ii) the method for determining the proportion of the costs to be borne by the person making an application for connection to the transmission system and the proportion to be borne by the transmission system operator,
(b) prescribe the circumstances in which the transmission system operator can refuse to make an offer to an applicant to enter into an agreement for connection to the transmission system or use of the All-Island Transmission Networks,
(c) prescribe the circumstances in which the transmission system operator can refuse to make an offer to enter into an arrangement with the Northern Ireland System Operator pursuant to subsection (1),
(d) provide for the resolution of disputes between the transmission system operator and any applicant for an offer to enter into an agreement for connection to the transmission system or use of the All-Island Transmission Networks or any person who has entered into an agreement with the transmission system operator for connection to the transmission system or use of the All-Island Transmission Networks,
(e) provide for the resolution of disputes between the transmission system operator and the Northern Ireland System Operator in connection with any arrangement entered into or sought to be entered into pursuant to subsection (1),
(f) provide for the basis upon which charges are determined for connection to the transmission system and for use of the All-Island Transmission Networks, and
(g) prescribe the circumstances (if any) in which the transmission system operator shall continue to be obliged to make an offer to enter into an agreement for connection to or use of the transmission system pursuant to section 34(1).
(4) In this section—
‘All-Island Transmission Networks' means the transmission system together with the Northern Ireland Transmission System;
‘Northern Ireland System Operator' means the holder of a transmission licence granted under Article 10(1)(b) of the Electricity (Northern Ireland) Order 1992 and who is, from time to time, designated by the Authority as the transmission system operator for Northern Ireland;
‘Northern Ireland Transmission System' shall have the meaning given to the term ‘transmission system' in the licence granted to the Northern Ireland System Operator under Article 10(1)(b) of the Electricity (Northern Ireland) Order 1992.”.”.
This amendment inserts a new section which applies to an all-island status of the new market on the transmission network. It amends the terminology in the existing domestic legislation to reflect the language to be used in single electricity market licences under the trading and settlement code.
Is the committee happy with the amendment?
We are not happy with it but we will accept it.
Amendment agreed to.
SECTION 14.
Amendments Nos. 73 to 75, inclusive, are related and will be discussed together.
I move amendment No. 73:
In page 13, line 20, to delete "Commission" and substitute "Commission,".
This is a technical amendment which is similar to others I have proposed but which have been refused by the Minister of State. It is also similar to amendments proposed and accepted by him, but we will say no more than this. Does he wish to accept the amendment?
The Minister of State is not in a receptive mood.
Amendment, by leave, withdrawn.
I move amendment No. 74:
In page 13, line 22, to delete "not" and substitute "not,".
This amendment, introducing a comma and a full stop, is exactly the same as an amendment proposed by the Minister to another section. Does the Minister of State see fit to accept it in his wisdom?
The drafting reflects standard drafting practice. Therefore, the proposed amendments are not necessary. I think the Deputy is getting bad legal advice.
The reverse is the case. It is not that the Minister of State is being badly advised, but he has failed to heed the advice offered to him. He should take advice from this side of the House as much as anywhere else. I withdraw the amendment on the basis that the Minister of State is incapable of recognising its magnitude.
I bow to the Deputy's superior wisdom.
I would like to make an observation on behalf of the committee. The drafting of the Bill should be examined again because committee members would not propose amendments such as these if they were without merit. I respectfully suggest to the Minister of State that, of all the issues raised today, those responsible for drafting the Bill examine the language used in the text. It is important that the Department consider tidying the Bill, if necessary, before Report Stage.
Amendment, by leave, withdrawn.
I move amendment No. 75:
In page 13, line 23, to delete "paragraph 7" and substitute "paragraph 7,".
This amendment faces the same fate as the others.
Amendment, by leave, withdrawn.
Section 14 agreed to.
Section 15 agreed to.
NEW SECTION.
I move amendment No. 76:
In page 13, before the Schedule, to insert the following new section:
16.—Paragraph (c) of section 6 of the Energy (Miscellaneous Provisions) Act 2006 (which amends section 14(1)(d) of the Act of 1999 with effect from a day to be appointed under section 1(2) of the Energy (Miscellaneous Provisions) Act 2006) is amended by the substitution of “section 9(1)(d) or section 9BA” for “section 9(1)(d).”.”.
This technical section allows for the provisions of section 14(1)(d) of the Electricity Regulation Act 1999, as amended, regarding the making of regulations for trading arrangements for the new market. It will come into effect on the date the Minister may by order appoint. This provision is to ensure the regulations for the existing trading arrangements can continue as long as necessary.
I would like to pick up on the Minister of State's last point about section 9(1)(d). I know it is a reference to the other energy Bill. It is obvious that we have to put a full stop somewhere.
This relates back to a previous conversation we had. All of the wisdom cannot be on the other side of the House.
I do not mean any disrespect to the advisers.
We should remind our officials and their counterparts from the North that what we are doing here is different — it is not the same as doing an ordinary domestic Bill.
It is not a parish pump issue.
We have to allow for a little leeway. I thank the Chairman for giving us a little leeway to make some general comments. We are doing something quite historic here.
Amendment agreed to.
SCHEDULE.
As amendments Nos. 77 to 80, inclusive, are related, they may be discussed together, by agreement.
I move amendment No. 77:
In page 13, line 35, after "Commission," to insert "the industry and consumer representatives,".
This amendment represents an expression of a theme that I have been trying to introduce to the Bill throughout this debate. Some of my colleagues have been trying to do the same thing. I am proposing that "industry and consumer representatives" be catered for in this section of the Bill. Such a provision would cover the needs and requirements of the entire spectrum, from those involved in the transmission and generation of electricity to industrial and domestic consumers. I would like to hear what the Minister of State has to say on the amendment.
Has the Deputy spoken on all the amendments in this group?
Will he comment on amendments Nos. 78, 79 and 80?
I will. I support the amendments in the group which are not in my name. The comments I have made apply to all of these amendments. They mean the same thing, in effect.
I second those remarks. It is obvious that a formula has been laid down. The amendments in the names of Deputies Durkan and Ferris would tighten up these provisions. I will move Deputy Ferris's amendments. I agree that there should be direct representation of consumer and business interests.
I will not accept these amendments. The principal aim of the SEM committee structure is to ensure consistent regulatory decision-making on the part of the CER and the NIAER in respect of single electricity market wholesale matters. It is not intended to create a new all-island regulator. The concept that underpins these amendments can be considered in the future in the context of an all-island energy market.
I will withdraw amendment No. 77 on the understanding that the requirements of the amendments to this section will be reviewed in advance of Report Stage.
Amendment, by leave, withdrawn.
Amendments Nos. 78 to 80, inclusive, not moved.
I move amendment No. 81:
In page 14, line 8, to delete "with the approval of the Department," and substitute the following:
"with the approval of the Department and after consultation with the Commission,".
This minor technical amendment reflects the provision, as drafted, relating to the appointment of an independent member of the SEM committee.
Amendment agreed to.
As amendment No. 83 is consequential on amendment No. 82, amendments Nos. 82 and 83 may be discussed together, by agreement.
I move amendment No. 82:
In page 14, line 22, after "term" to insert "or consecutive terms".
This amendment would improve section 6 of the proposed new Schedule, which currently states that "a person shall not be appointed as a member for a term exceeding 5 years". I would like to amend that provision so that it refers to "a term or consecutive terms exceeding 5 years", which could mean something totally different. I am not sure the Minister of State is disposed to accept this amendment, although he might "make my day", as Clint Eastwood once said, by doing so. There is quite a difference between "a term" and "consecutive terms". It might not be any harm to keep this proposal in mind. I will be pleased if the Minister of State accepts this amendment now, or if he decides to be totally humble by throwing himself on his sword and accepting the amendment on Report Stage.
As section 11 of the Schedule does not preclude a member from being appointed to the committee for more than a single term, the proposed amendments are unnecessary.
I ask the Minister of State to examine this proposal, for which there is a need, in advance of Report Stage. There is a certain amount of vagueness in this area.
The Minister of State will come back to it on Report Stage.
Amendment, by leave, withdrawn.
Amendment No. 83 not moved.
As amendments Nos. 85 and 86 are alternatives to amendment No. 84. Amendments Nos. 84 to 86, inclusive, may be discussed together, by agreement.
I move amendment No. 84:
In page 15, to delete lines 13 and 14 and substitute the following:
"(b) A sub-committee of the SEM Committee may include persons who are not members of the SEM Committee.”.
I intend to propose a similar provision in amendment No. 85. The Minister of State is suggesting that a sub-committee of the single electricity market committee may include people who are not members of the committee itself, if such people have the necessary expertise.
Under this section, as amended, a sub-committee can include all relevant persons who can assist it in the effective conduct of its business.
Amendment agreed to.
Amendments Nos. 85 and 86 not moved.
I move amendment No. 87:
In page 15, line 25, after "member" to insert the following:
"provided all other statutory requirements are complied with and that includes the laws of this State and those applicable to Northern Ireland".
This amendment relates to an issue I have raised in amendments on numerous occasions. If the Minister of State is true to form, he will have 10,000 reasons not to include the phrase "provided all other statutory requirements are complied with and that includes the laws of this State and those applicable to Northern Ireland" in the Bill. I think that on reflection, mature or otherwise, he might come back to the House in this regard on Report Stage. He could accept this amendment and improve it on Report Stage.
I will not accept amendment No. 87.
What is the Minister of State mumbling?
I will not accept it because it is unnecessary.
The Minister of State can get back to me on Report Stage, if necessary.
Amendment, by leave, withdrawn.
I move amendment No. 88:
In page 15, to delete lines 31 and 32 and substitute the following:
"16. (a) A matter may be decided by agreement——
(i) of all the members of the SEM Committee (whether at a meeting or not), or
(ii) of all the members of the SEM Committee present at a meeting.".
This minor technical amendment clarifies that decisions taken at quorate meetings are decisions of the SEM committee.
Amendment agreed to.
I move amendment No. 89:
In page 16, line 13, after "manner" to insert the following:
"subject to the laws of this State and those of Northern Ireland".
I have tabled this amendment merely to recognise the existence of the two parts of this island which are party to this agreement. I am referring the matter to the Minister of State even though he refused to accept similar amendments previously. He has yet to seize with both hands the opportunity to accept an amendment from the Opposition. This measure may have to wait until the lifetime of the next Government, unfortunately.
Is the amendment being withdrawn?
I will have to withdraw it because the Minister of State is not proposing anything else.
Amendment, by leave, withdrawn.
As amendment No. 91 is an alternative to amendment No. 90. These amendments may be discussed together, by agreement.
I move amendment No. 90:
In page 16, to delete lines 17 to 24 and substitute the following:
"17. (a) Anything which is authorised or required to be done by the SEM Committee may be done by——
(i) any member of the SEM Committee who is authorised for that purpose by the Committee, either generally or specifically,
(ii) any sub-committee of the SEM Committee which is so authorised, or
(iii) any member of the staff of the Commission or the Authority who is so authorised.
(b) Subparagraph (a)(ii) does not apply to a sub-committee whose members include any person who is not a member, or member of the staff, of the Commission or the Authority.”.
This minor technical amendment allows each regulatory authority to designate members of the other authority to ensure efficient and effective conduct of SEM regulatory business.
Is amendment No. 91, in my name, being taken now with amendment No. 90?
Yes, but if amendment No. 90 is accepted, amendment No. 91 will not be allowed.
I know. That is why I want to speak about my amendment now.
Of course. We are on the home straight.
My amendment No. 91, which proposes the insertion of the phrase "by the Commission or the SEM" after the word "authorised" at the end of section 17 of the Schedule, might do the same job as amendment No. 90. I have made the exact same suggestion, although my version is much shorter. I compliment the Minister of State for his wisdom in anticipating the amendments which were likely to be tabled by the Opposition.
I convey my appreciation of the fountain of knowledge that exists on that side of the House. I would especially like to compliment the advisers and civil servants who have come up with the inspiration for these amendments.
I thank Deputy Durkan for his comments.
Amendment agreed to.
Amendment No. 91 not moved.
Schedule, as amended, agreed to.
TITLE.
I move amendment No. 92:
In page 3, line 10, after "MARKET" to insert the following:
"AND FOR MECHANISMS TO PROTECT THE INTERESTS OF ELECTRICITY CONSUMERS".
It is appropriate that this final amendment would make reference in the Title to electricity consumers. At the end of the day, this is the point of what we are doing. The consumers should be in a central role. We have had the debate before and we know the issue. An energy Bill will be published in the coming years where consumers will have to be put at the forefront, but I have tried to refer to that in this amendment. It is central to why the SEM is important and why we have been here today going through this Bill.
I support the amendment. It reflects what we have been saying throughout the debate. In a world that is becoming increasingly overpopulated with technocrats, autocrats and bureaucrats, it is important to have some democratic enterprise imposed on the Bill, albeit imposed on those who might have to face up to it with reluctance. The most important element of the amendment is to recognise the existence of the needs of consumers. We have spoken about the strength, voracity and reliability of the grid. We have spoken about regulators and all of these people who have technical or plutocratic input of one kind or another. The amendment put down by Deputy Broughan encompasses the most important need of all; that of the consumer.
I must be consistent. This amendment is not accepted. The protection of the consumer is set out as the principal objective of the Minister, the CER and the SEM committee in section 9 of the Bill. Therefore, it is unnecessary to include Deputy Broughan's amendment in the Title of this Bill. That is for another day.
Amendment put and declared lost.
Title agreed to.
Bill reported with amendments.
I wish to acknowledge the presence of Mr. Peter Hughes, Ms Elaine Flanagan and Mr. George McNally of the Department of Enterprise, Trade and Investment in Northern Ireland. This is the second Bill that deals with North-South relations and is historic for this committee. I said during the course of our own meeting that when the Assembly is up and running again, members of our opposite committee might visit us here, or we might visit them in Northern Ireland. In the meantime, I see no difficulty in the committee considering a visit to Portcullis House to sit in on Committee Stage of this Bill on 19 February. It might be worthwhile for our committee to do that. On Report Stage of the Bill, we might invite members from our opposite committee in the House of Commons to visit Dáil Éireann.
Just one second, Deputy. Other legislation will be passed in both the House of Commons and in the Oireachtas which will benefit the people of both jurisdictions on the island of Ireland.
I will call on the Minister of State to address the committee, then I will ask committee members to speak according to procedure. We will give everybody a chance to speak.
I thank the Chairman and his officials for his patience and courtesy at all times. I thank the Opposition spokespersons and Deputy O'Malley for their input into this Bill. It is a very technical Bill and is complicated at times, but some of the views expressed today will hopefully be reflected on Report Stage.
I thank my own officials for their expertise, their guidance and for making sure that I did not concede too much to Deputy Durkan. I welcome our brethren from Northern Ireland. We are pleased to have them and I know there has been a great working relationship between our officials and the Northern Ireland officials to bring this Bill to conclusion as quickly as possible.
I thank the Chairman, the Minister of State and his officials, as well as the officials from Northern Ireland, for their contributions in this groundbreaking Bill. The debate was very useful. The only thing the Opposition can and should do in the passage of any Bill is to challenge it constructively. We did not do this together as we all raised the points separately having read the Bill. We do not have the resources of the Department. We must do this ourselves, sometimes staying up until the early hours of the morning. The Minister of State will tell me that he does the same, but we will not go there.
The Minister of State will probably find that some of this will come back to us on Report Stage. As the process moves on, we need to do things right. We need to keep in mind the job we are doing and for whom we are doing it, which is all the people of both jurisdictions.
I thank the Minister of State. He got through a difficult Bill in his usual affable way. I also thank the officials from the Department for briefing us on the Bill. I know that they will keep us informed if there are any further changes. I warmly welcome our colleagues from Northern Ireland and I look forward to working with them in the administration of the SEM in the months and years ahead.
I commend the Minister of State for sitting in on what is not an easy Bill to bring through Committee Stage. I particularly commend the officials from both sides of the Border. This is a historic, positive and progressive development. It is not easy. I welcome the further passage of the Bill and I hope it will be to the benefit of consumers and the environment, as well as to our economy.
Last but not least, my friend and colleague, Deputy O'Malley.
Thank you, Chairman. I also thank the Minister of State and his officials and I welcome the delegation from the North of Ireland. As this is a groundbreaking Bill, it was important that we were well briefed along the way. I appreciate the help and assistance that was given.
I have one query that I was prevented from asking earlier. Will Report Stage take place before or after the debate in the House of Commons? I think it will have to be after the debate.
It will have to be before the debate.
Sorry, that is what I meant.
It is down for 14 February.
I thank everybody involved today, especially for the order that they maintained. Things did not go too far astray between Deputy Durkan and myself.
