Energy (Miscellaneous Provisions) Bill 2011: Committee Stage

The meeting has been convened to consider the Energy (Miscellaneous Provisions) Bill 2011. I welcome the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, and his officials.

It is now 2.45 p.m. and there are a number of amendments. I propose we try to conclude this consideration within 90 minutes. Is that agreed? Agreed. Does the Minister wish to make any comments?

If the Chairman would permit me I would like to make a few comments. Although this is an important Bill it is fair to say it is not a controversial one. The House did not divide on it. I thank colleagues on the other side of the House for their constructive approach to the Bill and remind them that in my Second Stage speech on 19 October I flagged my intention to introduce a number of amendments on Committee Stage of the Bill, primarily for the purpose of clarifying certain matters. I indicated the possibility of amendments to make provision for the winding up of a number of non-trading BGE subsidiaries. I also indicated my intention to introduce amendments to the National Oil Reserves Agency Act 2007 whose purpose was to facilitate co-operation and the provision of information by the oil companies in respect of oil contingency planning and to introduce amendments to the National Oil Reserves Agency Act 2007 in regard to the time limits set out in that Act to allow the agency to perform its functions more effectively with respect to bio-fuel certificates.

Following consultation by my Department with the office of the Parliamentary Counsel amending provisions in regard to these three matters were drafted and I propose to introduce amendments in this regard today.

The Members will also note I am proposing a number of amendments in respect of Chapter V of the Bill which deals with LPG safety regulations. For the benefit of the commiteee I wish to set out briefly the rationale for those amendments.

The role proposed for the regulator in this Bill with regard to LPG safety is a small part in the overall safety regulation of the LPG chain. The object is to assign to the regulator responsibility for the safety and regulation of those aspects of LPG that are not already regulated by the health and safety authority or, indeed, any other body. In discussions between the authority and the regulator in my Department, following the publication of the Energy (Miscellaneous Provisions) Bill 2011, concerns were raised by the Health and Safety Authority that if the provisions of the Bill were enacted there was potential for double safety regulation of certain aspects of the LPG chain.

I am satisfied that these concerns were well-founded and therefore I propose a number of amendments in order to clarify the regulator's LPG safety role. These amendments have been agreed by the office of the Parliamentary Counsel. The amendments will restrict the regulator's LPG safety functions to the regulation of the activities from a safety perspective of these LPG undertakings that make LPG available to domestic consumers via a piped distribution network. These are entities that supply LPG to housing estates and are generally located in areas not served by the national gas network. The amendments will eliminate the potential for regulatory overlap between the Health and Safety Authority and the regulator, namely, the Commission for Energy Regulation in regard to LPG safety regulation. The proposals in this Bill, if enacted, will result in all aspects of the LPG chain being regulated from a safety perspective.

A grouping list for the treatment of amendments has been circulated to members so we shall turn straightaway to their consideration.

Section 1 agreed to.
SECTION 2

I move amendment No. 1:

In page 3, after line 31, to insert the following:

" "Minister" means Minister for Communications, Energy and Natural Resources;".

This is a drafting amendment proposed by the Parliamentary Counsel to correct an omission in the text.

Amendment agreed to.
Section 2, as amended, agreed to.
Sections 3 and 4 agreed to.
SECTION 5

I move amendment No. 2:

In page 19, line 36, before "the" where it firstly occurs to insert "of".

This is a drafting amendment.

Amendment agreed to.
Section 5, as amended, agreed to.
Sections 6 to 11, inclusive, agreed to.
SECTION 12

I move amendment No. 3:

In page 30, subsection (3), line 17, after "approval." to insert the following:

"Prior to such submission, the energy supplier shall, subject to any confidentiality provisions contained in the agreement, publish notice of its intentions and invite comment from any stakeholder. The Minister may give guidelines regarding such publication.".

This amendment re-inserts language already set out in Regulation No. 17(3) of the European Communities (Energy End-use Efficiency and Energy Services) Regulations 2009 as set out in SI No. 542 of 2009. These regulations transpose the EU Energy Services Directive 2006/32/EC.

This amendment has been inserted on the advice of the Office of the Parliamentary Counsel to ensure consistency with the energy services directive. The amendment will ensure that, in the interests of transparency, energy suppliers shall, prior to submitting a voluntary agreement for the Minister's approval, publish a notice of their intentions and invite public comment, subject to any applicable confidentiality provisions. The Minister may give guidance on the format and manner of how the notice will be published.

Amendment agreed to.

Amendments Nos. 4 and 5 are related and may be discussed together.

I move amendment No. 4:

In page 30, subsection (4), line 21, to delete "section 12(2)” and substitute “section 11(2)”.

This is a technical amendment.

Amendment agreed to.

I move amendment No. 5:

In page 30, subsection (5)(a), line 27, to delete “section 12(2)” and substitute “section 11(2)”.

This is another technical amendment.

Amendment agreed to.
Section 12, as amended, agreed to.
Section 13 agreed to.
SECTION 14

Amendments Nos. 5a and 7 are related and may be discussed together.

I move amendment No. 5a:

In page 31, subsection (1), line 17, after "("Fund")." to insert the following:

"The Fund shall be integrated into the fuel poverty programme and all measures proofed to ensure compliance with the objectives of that programme.".

This amendment is to ensure victims of fuel poverty are protected and are not discriminated against. I hope the Minister will accept this proposal.

I have a similar proposal in amendment No. 7. It is important the energy efficiency fund has a particular focus towards the alleviation of fuel poverty. I hope the Minister will accept the spirit of our amendments. If the wording of our amendments is not right, he can come back with an alternative on Report Stage.

On 27 November, I launched the affordable energy strategy and every Member has a copy of that document. The strategy is primarily directed at alleviating energy poverty rather than fuel poverty. Moreover, there is already a better energy warmer homes scheme in place administered by the Sustainable Energy Authority of Ireland, SEAI. The programme for Government has signalled the Government's intention to move away from grants by the end of 2013. I do not want to be prescriptive about the fund's remit but I concede that, in practice, a portion of the fund may be directed at energy poverty alleviation.

The committee should note, however, section 14(1) provides the Minister may establish a fund meaning it is not a mandatory provision.

The proposed pay-as-you-save scheme is considering the issue of how to incentivise people on low incomes who would typically fall into the category of energy-fuel poor. I intend to bring a memorandum to the Government on this issue.

I understand where both amendments are coming from but it would not be right to enshrine it in primary legislation. The power is there for the Minister to ensure a portion of the fund is directed at the alleviation of energy poverty. I propose not to accept the amendments.

That is all well and good. However, it is at the discretion of the Minister. That all depends on the ideological position of the Minister at the time. Accepting these amendments would strengthen this Bill and the Minister's personal commitment to people in fuel poverty.

I am disappointed with the Minister's answer. I am concerned with this obsession with pay-as-you-save schemes. If one is poor, such a scheme does not immediately reduce one's bills. It means the bill is the same but one is paying back at capital cost. When one is poor, one needs immediate alleviation of cash pressures. The only way of dealing with that is through grants. I am appalled the Minister keeps repeating this mantra about doing away with grants and moving to pay-as-you-save schemes. That may be all right for people with wealth. It is a bit like putting a solar panel in one's house and in seven years time making some money out of it. That is a long time for someone without money.

It would be right for the Oireachtas to commit the Minister to binding the fund to the alleviation of energy poverty. I accept we may have used the wrong term — "fuel poverty" rather than "energy poverty" — in our amendments. If there is a subtle difference between fuel poverty and energy poverty in law, we better get the law right. If the Minister does not provide an alternative amendment, I will retable my amendment on Report Stage.

I support my two colleagues, Deputies Ferris and Ó Cuív. Will the Minister seriously consider their proposal?

I do consider it very seriously. This is an issue in our society. In the context of the economic crisis, no doubt it is more serious than it would be at other times. For that reason, we have this arrangement in place with the fuel supply companies and the regulator in respect of no disconnections where a pay-as-you-go meter is installed or the customer enters into a prepayment plan. That is designed to attempt to deal with disconnections, which, even in good times, have been a phenomenon. The figures going back over the years show that.

Deputy Ó Cuív is correct when he states that pay-as-you-save will not deal with the question of energy poverty in the sense that the pay-as-you-save scheme on which we are working is designed for those who will be able to avail of that scheme in order to retrofit their homes to make them more energy efficient and be able to pay for that out of the savings that accrue over a set period. As Deputies Martin Ferris and Ó Cuív will be aware, we have been involved in the discussions on that. I have met the chief executives of the two main banks. We are working on trying to create a new model that will permit the transition from the existing grants based system to this pay-as-you-save system.

However, Deputy Ó Cuív is correct in stating that there will still be those out there who will be among the fuel poor, and that is inevitable. In that regard, we may well have to look at continuing some form of grant scheme. In any event, the Department of the Environment, Community and Local Government will have a separate scheme in respect of public authority housing. For the most vulnerable, the warmer homes scheme would still be a fallback if the pay-as-you-save scheme does not suit their particular circumstances.

If colleagues have had an opportunity to read the document published on 27 November, we attempt to provide for this. As I say, I do not rule out that if the fund comes into existence, a portion of it may, indeed, have to be directed towards energy poverty alleviation.

The right thing to do is rule it in. I would rule it in through a mandatory directive by the Oireachtas and that is what we are trying to do.

I have read the Minister's document. They seem to be selling the Minister a policy that I always thought was ridiculous. They tried to sell it to me and I told them to jump. It was the idea that if one made one's house energy efficient, one would lose some of one's fuel allowance. I could never understand the logic of that one. Talk about providing a disincentive to improving energy efficiencies. I do not know anybody getting a fuel allowance who would find that it covers 100% of their fuel costs for a year and what seems to be in the policy is a disincentive to make oneself energy efficient because one would lose part of one's fuel allowance. As I said, they tried to sell that one to me when I was Minister for Social Protection and I said that was not on. If one was to keep the same fuel allowance, there would be a considerable incentive to become thermally efficient and avail of the warmer homes scheme and every other scheme because then the same money would make you much warmer, and if you happened to have any of it left over for bread or for anything else, good luck to you.

There is something seriously wrong with our approach to this question down the years. In the past ten years alone, the State has spent approximately €2 billion on the existing support schemes, the efficiency and effectiveness of which are in some cases questionable, as against a spend of approximately €70 million on the warmer homes scheme. It is really skewed spending. We really must address the question of energy efficiency of Irish homes.

If Deputies Martin Ferris and Ó Cuív are pressing this, I would draw the committee's attention to the fact that the wording in the Act is that the Minister may establish such a fund. If both Deputies want to go back to the drawing board and come back with a reworded amendment that states "may" as distinct from "shall", I will look positively on it for Report Stage.

I do not believe that anybody getting the fuel allowance is purposely fuel inefficient. It is not my experience. The fuel allowance is a supplementary social welfare payment for those on low income and it is means tested.

On the broader policy level, I was arguing that the fuel allowance should be protected at all costs and that the Government would be better making its saving on the rich contributory pensioners than taking it from the poorest. I used argue to the Department of Finance that the fuel allowance is a supplementary social welfare payment in cash to the poorest in society whereas contributory payments are scattergun by their nature. A person could be on €2 million a year and get a contributory payment, and we do not cut him or her. We cut those who we know have no more than €100 a week as a maximum on the contributory. I am shocked on a policy basis at what the Minister proposes in his document, if I read it correctly. As I stated, they tried this one on me. The document proposes that when a person makes his or her house fuel efficient, warm and comfortable, they will drop his or her fuel allowance, which is a disincentive.

There has been a significant improvement, certainly in my constituency, in the thermal quality of houses in the past 15 or 20 years. One of the big changes I noticed during the last election campaign when I stood in so many kitchens in February was how warm the homes were. That was, first, because we had a proactive policy of improving houses through grants such as the Gaeltacht grants, housing aid for the elderly, etc., and second, because of the warmer homes scheme. The Government should do much more of that.

It was particularly noticeable that while there was a small grant of €5,000 in the Gaeltacht, there was no grant like that in the non-Gaeltacht areas and there were many more really cold houses in the non-Gaeltacht areas. That shows how modest grants make a considerable difference in lifestyle. That is not exactly in the terms of the Bill.

I thank the Minister for the offer he made. Certainly, I will be putting in an amendment on the lines the Minister suggested on Report Stage.

If "energy poverty alleviation" is the phrase used, it might fit better with the Bill.

Nowhere in the document that I published does it remotely state that if we had more comfortable, warmer, more energy efficient homes, we would be dropping the fuel allowance. What it states is that the fuel allowance is inefficient. If one is giving somebody a fuel allowance in a very inefficient home, it is largely going up the chimney. I agree with Deputy Ó Cuív that it is not the fault of the recipients of the fuel allowance that such is the case. It is, however, the fault of successive Governments that the housing stock, most especially in the past 15 years when such a significant proportion of it was built, was not built to proper standard and that those building those houses got away with homes that are simply not energy efficient. There are wider considerations here which relate to the established effect on good health of energy efficient homes. That is why we put that up in lights, as our target for children and older people, the benefits from more energy efficient homes speak for themselves. We have spent a large amount of money on fuel supports. I am merely comparing the amount over the last decade, €2 billion plus in fuel supports, much of it inefficient, and €70 million on improving the energy efficiency of homes. It is a skewed figure.

There is no basis for that argument. There was no objection.

How stands the amendment?

I am pushing the amendment.

I am making the same offer to Deputy Ferris as I made to Deputy Ó Cuív that if they come back with a slight rewording I will look positively on it on Report Stage.

The Minister will look on it positively on Report Stage.

Amendment agreed to.

I move amendment No. 6:

In page 31, between lines 30 and 31, to insert the following subsection:

"(6) Without prejudice to the generality ofsubsection (5) , energy efficiency improvement measures includes the provision of dry lining or any other form of wall insulation, or the provision of double glazed windows.”.

This amendment is self-explanatory. It outlines what energy efficiency improvements mean. In many houses, the first job one has to do is put in a decent door, replace the windows and move on to the more conventional types of energy improvements.

I am not disputing Deputy Ó Cuív's version of what the definition ought to be. However, I do not think he has advanced the amendment in the belief that I would put it into primary legislation. I do not propose to do that as that would only tie the hands of future Ministers and the Administration.

If I may say so, the Minister is making me more persuaded that this is badly needed. Some people involved in the business think it is all about dry lining and so on but if the house is so flawed that fundamental work needs to be done to get that far, that should be included. I have been in older houses - there are not many of them - where there are two inches between the door and the floor. A new door and a new frame is needed in those houses. Some of these houses were built in the pre-planning days in the 1950s. It is amazing what can be done but one has to stop the wind blowing in before beginning to do the more esoteric developments and my fear is that the most vulnerable will be left out.

I do not doubt that there are a small number of homes in the country in the condition which the Deputy described but we cannot put this into primary legislation.

He knows as well as I do that the Sustainable Energy Authority of Ireland has considerable experience acquired at this stage in terms of assessing, monitoring and supervising the works under the schemes operated by the Department. We are learning as we proceed. The contractors working on it are learning all the time. The notion of us being prescriptive to the extent that Deputy Ó Cuív's amendment requires would be counterproductive.

I could widen it. The Minister is being implicitly prescriptive. Following a building energy rating one finds out that the main causes of the bad thermal qualities are the actual structure of the house, be it single glazed windows or windows and doors with draughts, faulty roofs and so on. One should be allowed to use the money to rectify the fundamental problems before proceeding to deal with the other problems. We seek to widen it, not to make it prescriptive. It is the Minister who wants to make it prescriptive.

I do not think we can operate a scheme such as this unless we had the necessary flexibility. I cannot go outside of here with legislation that obliges me to rebuild every faulty structure but what we can do is try to improve the efficiency of people's homes as best we can within reasonable parameters and as defined in the experience of the schemes in place. I am aware there has been jerry building and bad practice in the building industry but the notion that I be required by law to put all that right is not practical.

Amendment put.
The Committee divided: Tá, 3; Níl, 5.

  • Ferris, Martin.
  • McGrath, Mattie.
  • Ó Cuív, Éamon.

Níl

  • Deering, Pat.
  • Doyle, Andrew.
  • Harrington, Noel.
  • O’Mahony, John.
  • Rabbitte, Pat.
Amendment declared lost.
Amendment No. 7 not moved.

I move amendment No. 8:

In page 32, subsection (11), line 5, after "for" to insert "Public".

This is to correct a typographical error.

Amendment agreed to.
Section 14, as amended, agreed to.
Sections 15 and 16 agreed to.
SECTION 17

I move amendment No. 9:

In page 33, to delete line 6.

This is a technical amendment. It proposes to delete the definition of LPG on the basis that section 23 of the Energy (Biofuel Obligation and Miscellaneous Provisions) Act 2010 provided for the insertion of a definition of LPG into the Electricity Regulation Act 1999.

Amendment agreed to.

Amendments Nos. 10, 13, 14, 23 to 26, inclusive, 28, 30, 34 and 36 to 38, inclusive, are related and may be discussed together.

I move amendment No. 10:

In page 33, between lines 9 and 10, to insert the following:

"‘LPG safety licence' means a licence granted under section 9JE;".

I propose a number of technical amendments relating to the safety regulation of LPG by the regulator. For the benefit of the committee, I want to set out the rationale behind these amendments. The role proposed for the Commission for Energy Regulation in this Bill with regard to LPG safety is a small part in the overall safety regulation of the LPG chain. The object is to assign to the regulator responsibility for the safety regulation of those aspects of LPG that are not already regulated by the Health and Safety Authority or any other body. I drew attention in my earlier remarks to the comments of the Health and Safety Authority about double safety regulation at the time of the publication. The purpose here is to correct this as the Health and Safety Authority's remarks were well grounded. We have corrected it, which is essentially what these amendments are about.

In a general sense, which parts are now under the Health and Safety Authority and which are under the Bill?

The major part is under the Health and Safety Authority although, in some quarters, it was the feeling that all of it should be under the Health and Safety Authority.

That is what I was going to say.

A very limited aspect of the overall safety regulation chain - do not ask me what part it is - comes under the energy regulator from here on.

I am not arguing with the amendment. Like a lot of things in life, my simple view is that it would be a lot handier for everybody if all safety issues were under the one authority. Perhaps the Minister could come back to us with a short briefing note.

It states here that these amendments restrict the regulator's LPG safety functions to the regulation of the activities from a safety perspective of those LPG undertakings that make LPG available to domestic consumers via a piped distribution network. That would be where there is no gas grid.

Are the Bord Gáis pipes under the remit of the Health and Safety Authority or the CER?

The remits are entirely separate. The pipes are the responsibility of the CER.

Can we take it that all pipes are the responsibility of the commission?

Can we take it that everything else falls under the remit of the Health and Safety Authority?

The Health and Safety Authority.

I wanted to clarify whether there was ease of demarcation.

Amendment agreed to.

I move amendment No. 11:

In page 33, to delete lines 10 to 14 and substitute the following:

" ‘LPG undertaking' means any person who imports LPG or purchases LPG directly from a refinery within the State and makes LPG available to individual domestic or commercial final customers by way of LPG cylinder, bulk tank or via a piped LPG distribution network;".

This is a technical amendment to tidy up the definition of "LPG undertaking".

Amendment agreed to.

Amendments Nos. 12, 20, 27, 29 and 31 are related and may be discussed together.

I move amendment No. 12:

In page 33, to delete lines 24 to 29 and substitute the following:

" ‘piped LPG distribution network' means a pipeline system connected to a central storage bulk tank or LPG cylinder but not including a bulk tank or LPG cylinder as the case may be, and includes pipework above and below ground and all other equipment necessary upstream of the point of delivery and downstream of the emergency control valve, supplying gas to two or more customers;".".

This is a technical amendment to provide for a definition of piped LPG distribution network. It is proposed such a network will be regulated, in terms of safety, by the regulator. Excluded from the definition are LPG bulk tanks and cylinders, which are already regulated by the Health and Safety Authority. This amendment is one of a number I am proposing to provide a coherent approach to safety regulation, while also avoiding the potential for double regulation.

Amendment agreed to.

I move amendment No. 13:

In page 33, to delete lines 34 to 36 and substitute the following:

" "(ea) to regulate the activities of natural gas undertakings, holders of LPG safety licences for the purposes of making LPG available via a piped LPG distribution network and natural gas installers, with respect to safety,”.

Amendment agreed to.

I move amendment No. 14:

In page 34, line 2, to delete ", storage".

Amendment agreed to.

Amendments Nos. 15 to 17, inclusive, 19, 21 and 22 are cognate and may be discussed together.

I move amendment No. 15:

In page 34, line 9, to delete "an" where it firstly occurs and substitute "a".

This is to correct a typographical error.

Amendment agreed to.

I move amendment No. 16:

In page 34, line 16, to delete "an" and substitute "a".

Amendment agreed to.

I move amendment No. 17:

In page 34, line 40, to delete "an" and substitute "a".

Amendment agreed to.

I move amendment No. 18:

In page 35, to delete lines 18 to 21 and substitute the following:

" "9I.—(1) A transmission system operator or a distribution system operator in relation to natural gas or a holder of a LPG safety licence may appoint a person to be a gas emergency officer for the purposes of this section.".

This amendment seeks to align the legislation with the safety role proposed for the regulator with regard to LPG undertakings. It proposes to restrict the powers to appoint gas emergency officers in regard to LPG issues to those LPG operators who fall within the regulator's LPG safety licensing regime.

Amendment agreed to.

I move amendment No. 19:

In page 36, line 15, to delete "an" and substitute "a".

Amendment agreed to.

I move amendment No. 20:

In page 37, to delete line 3 and substitute the following:

" "(ia) piped LPG distribution network,”.”.

Amendment agreed to.
Section 17, as amended, agreed to.
SECTION 18

I move amendment No. 21:

In page 37, line 7, to delete "an" and substitute "a".

Amendment agreed to.

I move amendment No. 22:

In page 39, line 5, to delete "an" where it secondly occurs and substitute "a".

Amendment agreed to.

I move amendment No. 23:

In page 39, line 46, to delete "a LPG undertaking or natural gas undertaking" and substitute the following:

"the holder of a LPG safety licence or a natural gas undertaking".

Amendment agreed to.

I move amendment No. 24:

In page 39, lines 49 and 50, to delete "LPG undertaking" and substitute "holder".

Amendment agreed to.

I move amendment No. 25:

In page 40, lines 32 and 33, to delete "LPG undertaking" and substitute "holder of the LPG safety licence".

Amendment agreed to.

I move amendment No. 26:

In page 41, line 11, to delete "A LPG undertaking" and substitute "The holder of a LPG safety licence".

Amendment agreed to.

I move amendment No. 27:

In page 41, line 44, to delete "LPG" and substitute "a piped LPG distribution network".

Amendment agreed to.

I move amendment No. 28:

In page 41, line 45, to delete "a LPG" and substitute "the holder of a LPG safety licence".

Amendment agreed to.

I move amendment No. 29:

In page 42, to delete lines 25 to 34 and substitute the following:

"9JE.—(1) For the purposes of ensuring LPG safety a person shall not make available LPG by way of a piped LPG distribution network for use by individual domestic final customers unless a LPG safety licence is in force in respect of the activity.".

Amendment agreed to.

I move amendment No. 30:

In page 42, to delete lines 41 to 44 and substitute the following:

"(3) The Commission may, upon application to it, grant or refuse to grant to a LPG undertaking a LPG safety licence to make LPG available to final customers by way of a piped LPG distribution network.".

Amendment agreed to.

I move amendment No. 31:

In page 43, to delete lines 21 to 24 and substitute the following:

"(9) The criteria specified by the Minister under subsection (8) may relate to any or all of the following:

(a) the safety of the piped LPG distribution network,”.

Amendment agreed to.

I move amendment No. 32:

In page 43, line 30, to delete "LPG undertaking" and substitute "person".

This is a technical amendment.

Amendment agreed to.

I move amendment No. 33:

In page 43, line 42, to delete "as" and substitute "as may be".

This is to correct a typographical error.

Amendment agreed to.

I move amendment No. 34:

In page 44, line 40, after "LPG" to insert "safety".

Amendment agreed to.

I move amendment No. 35:

In page 44, line 52, to delete "recover" and substitute "to recover".

This to also to correct a typographical error.

Amendment agreed to.

I move amendment No. 36:

In page 45, lines 6 to 8, to delete all words from and including "the" in line 6 down to and including "licence" in line 8 and substitute the following:

"the grant or the refusal to grant a LPG safety licence".

Amendment agreed to.
Section 18, as amended, agreed to.
SECTION 19

I move amendment No. 37:

In page 45, to delete line 40 and substitute the following:

"(c) holders of LPG safety licences,”.

Amendment agreed to.

I move amendment No. 38:

In page 45, line 44, to delete "LPG undertakings" and substitute "holders of LPG safety licences".

Amendment agreed to.
Section 19, as amended, agreed to.
NEW SECTIONS

I move amendment No. 39:

In page 46, before section 20, to insert the following new section:

"CHAPTER 6

Dissolution of Bord Gáis Éireann Subsidiary Companies and Transitional Provisions

20.—(1) The Minister may by order or orders dissolve any or all of the companies mentioned in the Table to this section.

(2) On the dissolution of a company undersubsection (1) the following are transferred to Bord Gáis Éireann—

(a) all rights and property (and rights to such property) held or enjoyed immediately before that day by the former company, or

(b) all liabilities incurred before that day by the former company which had not been discharged before that day,

and, accordingly, without any further conveyance, transfer or assignment—

(i) the said property, real and personal, shall, on that day, vest in Bord Gáis Éireann for all the estate, term or interest for which, immediately before that day, it was vested in the former company, but subject to all trusts and equities affecting the property and capable of being performed,

(ii) those rights shall, as and from that day, be enjoyed by Bord Gáis Éireann, and

(iii) those liabilities shall, as and from that day, be liabilities of Bord Gáis Éireann.

(3) All moneys, stocks, shares and securities transferred to Bord Gáis Éireann by this section that, immediately before the dissolution, are standing in the name of the former company shall, upon the request of Bord Gáis Éireann, be transferred into its name.

(4) Every right and liability transferred to Bord Gáis Éireann by this section may, on or after the dissolution, be sued on, recovered or enforced by or against Bord Gáis Éireann in its own name and it shall not be necessary for Bord Gáis Éireann to give notice of the transfer to the person whose right or liability is transferred by this section.

(5) Every contract or agreement made between the former company, and any other person, which is in force immediately before the dissolution shall continue in force on and after that day and shall be construed and have effect as if Bord Gáis Éireann were substituted therein for the former company or, as the case may be, its trustee or agent acting on its behalf, and shall be enforceable against Bord Gáis Éireann.

(6) Where, immediately before the dissolution, any legal proceedings are pending in any court or tribunal and the former company is a party to the proceedings, the name of Bord Gáis Éireann shall be substituted for that of the former company or, as the case may be, such trustee or agent thereof, and the proceedings shall not abate by reason of such substitution.

(7) Final accounts of a former company shall be drawn up by Bord Gáis Éireann as soon as may be after the dissolution in such form as may be approved of by the Minister, and in respect of such period or periods as may be specified by the Minister.

(8) Every order made by the Minister under this section shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the order is passed by either such House within the next 21 days on which that House has sat after the order is laid before it, the order shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.

(9) In this section—

"dissolution" means the day upon which a company is dissolved undersubsection (1);

"former company" means a company dissolved undersubsection (1) and includes any trustee or agent of the former company acting on behalf of the former company.

Table

City of Waterford Gas Company

Clonmel Gas Company Limited

Cork Gas Company

Limerick Gas Company Limited

"

This is to insert a new section before section 20. It would enable the Minister for Communications, Energy and Natural Resources to dissolve, by order, certain non-trading statutory subsidiaries of Bord Gáis Éireann. Bord Gáis Éireann is seeking to wind up these subsidiaries in the interest of good corporate administration of the Bord Gáis Éireann group and, in doing so, removing an unnecessary administrative and corporate compliance burden.

Unless the statute establishing an entity provides for a winding-up mechanism, the entity may only be dissolved pursuant to statute. The statutes that establish the companies concerned do not contain provisions enabling the dissolution of the companies. All the real and personal property rights and liabilities of the companies concerned were vested in Bord Gáis Éireann on 4 February 1997 pursuant to the Energy (Miscellaneous Provisions) Act, 1995 (Section 14) Order 1997, SI 71 of 1997.

Amendment agreed to.

I move amendment 40:

In page 46, before section 20, to insert the following new section:

"CHAPTER 7

Amendment of National Oil Reserves Agency Act 2007

20.—(1) In this section—

"Act of 2007" means the National Oil Reserves Agency Act 2007;

"Biofuels Act 2010" means section 3 of the Energy (Biofuel Obligation and Miscellaneous Provisions) Act 2010.

(2) Section 44I (inserted by the Biofuels Act 2010) of the Act of 2007 is amended —

(a) in subsection (1), by substituting “60 days” for “35 days”, and

(b) in subsection (3), by substituting “35 days” for “28 days”.

(3) Section 44J (inserted by the Biofuels Act 2010) of the Act of 2007 is amended in subsection (2), by substituting "14 days" for "28 days".

(4) Section 44K (inserted by the Biofuels Act 2010) of the Act of 2007 is amended by inserting after subsection (2) the following:

"(2A) In order to count biofuel obligation certificates against the discharge of a biofuel obligation for any obligated period, the notice of transfer for those certificates must be submitted to the Agency within 81 days after the end of the obligation period concerned.".

(5) Section 44M (inserted by the Biofuels Act 2010) of the Act of 2007 is amended in subsection (1), by inserting after paragraph (c) the following:

"(ca) the biofuel obligation account holder fails to comply with Regulation 7(4) of the European Union (Biofuel Sustainability Criteria) Regulations 2011 (S.I. No. — of 2011),”.

(6) The following section is inserted after section 67 of the Act of 2007:

68.—(1) The Minister may prepare contingency plans to be implemented in the event of an oil supply disruption.

(2) Each oil company and oil consumer shall assist and cooperate with the Minister, the Agency and relevant public bodies in the preparation of contingency plans for, and the response to, an oil supply disruption.

(3) Each oil company and oil consumer shall, if so directed by the Minister, furnish to him or her and the Agency such information as he or she may require in respect of the preparation of contingency plans for, and response to, an oil supply disruption.".

This amendment is to insert a new section. There are two elements to it. Both relate to the National Oil Reserves Agency Act 2007. The first part relates to the administration of the bio-fuels obligation scheme by the National Oil Reserves Agency. It is a very small agency with six employees. The second part proposes to address a gap in the legislation in regard to oil contingency planning.

With regard to the bio-fuels obligation scheme, the changes proposed reflect recommendations contained in the 2010 annual report of the agency on the operation of the bio-fuels obligation scheme. The report contained recommendations that certain legislative deadlines should be extended to enable the National Oil Reserves Agency to perform its functions in regard to the scheme in a more cost-effective manner. Following a review of the recommendations by my Department, I am satisfied the amendments, as proposed, should be proceeded with.

The bio-fuels obligation scheme was introduced with effect from 1 July 2010 in compliance with EU legislation. The net effect of accepting the amendments would add 18 days to the entire reconciliation process in regard to bio-fuel certificates.

I propose that a new deadline be inserted by means of the proposed subsection (2A) in section 44K. If accepted, this provision will legally oblige bio-fuel obligation account holders to request transfers of bio-fuels obligation scheme certificates within 21 days after the issuing of the notice by NORA under section 44I or within 81 days after the relevant obligation period.

This will further contribute to the efficient administration of the scheme.

It is a requirement of the bio-fuel regulations that an annual audit be submitted to the NORA demonstrating the information held by the account holder regarding its compliance with sustainability criteria for bio-fuels as set out in the renewable energy directive. The amendment to section 44M(1) will allow the agency to revoke a certificate in the event that a bio-fuel obligation account holder fails to submit an audit within three months of the end of the obligation period.

In regard to the second part of the amendment, my Department actively engages with the National Oil Reserves Agency and the oil industry, as represented by the Irish Petroleum Industry Association, on oil supply disruptions contingency planning. The Department has published a handbook on disruption contingency measures which outlines the legislative and general procedures that inform the decision making process in the event of disruptions to oil supply. During the course of discussions with the industry and the NORA to develop the existing contingency plans, it was noted that while the Fuels (Control of Supplies) Acts 1971 and 1982 afford the Minister for Communications, Energy and Natural Resources, on foot of an order made by Government, extensive powers to control the supply and distribution of fuels in the event of an emergency the Acts do not provide a legal underpinning for the advance preparation of national oil supply disruption contingency plans. The proposed amendment to the National Oil Reserves Agency Act 2007 would remedy this gap by establishing that the Minister has thevires to develop a contingency plan to allow a national response to an oil supply disruption by imposing a general duty on oil companies to work with my Department, the NORA and other relevant public bodies in the development of contingency plans and to provide the Department and the NORA with such information and explanations as are necessary to prepare and execute plans in the event of supply disruptions.

That was a comprehensive explanation. I will have to study these obligation certificates before commenting on them.

In respect of the contingency plans, I take it that we are giving more powers to the Minister to ensure security of oil supply. How much oil can be suppled from storage facilities in the event of a disruption? I understand the State does not have sufficient supplies to meet contingencies.

The discussions with the industry and the NORA brought to light some holes in the legislation that will need to be plugged. These defects will be addressed once the Bill is enacted.

I understand we are required to stockpile sufficient fuel to provide a supply for 90 days. Not all of the reserves are held on the island of Ireland, however. The significant capacity provided by the new facility at Ringsend allows easier access to stocks in the event of an emergency. At the end of this year approximately 63% of the stocks will be available to us on the island of Ireland, with 32% held elsewhere. If an emergency occurred I understand we would have equal access to the stocks located outside this jurisdiction.

History tells us that if stocks are located elsewhere they can be grabbed by others in an emergency. In a more benign scenario, our capacity for importing the oil we require would be limited should a ship sink in Dublin Bay.

Is it the intention to store our entire oil reserve in the State in light of the potential capacity at Whiddy Island and Whitegate?

In regard to the oil refinery at Whitegate, the obligation on ConocoPhillips is due to expire in 2016. Is the Department preparing plans to continue refining in Ireland to guarantee our access to a strategic oil reserve in future?

I would instinctively feel more comfortable if the stocks were physically available in this jurisdiction. I am advised, however, this is not always necessary. It can be easier to supply Dublin from Wales than from the Deputy's jurisdiction. Although the agency dealing with these matters employs only six staff, it makes a significant contribution relative to its costs. Having met the people concerned I am impressed by their knowledge of the industry and the strategic concerns that arise. The purpose of building the Ringsend depot was to allow us to move stocks to a readily accessible location, as distinct from what obtained heretofore.

Deputy Martin Ferris has been pursuing me on a different matter related to the prospect of establishing a liquified natural gas plant at Tarbert, County Kerry. If, as I hope, that plant is built, NORA wants to explore with Shannon Development the possibility of locating an additional facility in that area. I have considerable confidence in the ability of NORA's staff to provide for everything but the scenario described by Deputy Ó Cuív, who suggested that the reserves held in Wales might be sequestered by the remnants of the empire if the ancient enemy declared war on us again. We do not expect such a scenario to occur, however.

Deputy Harrington will be familiar with the background to the Whitegate refinery and its acquisition. It is currently owned by ConocoPhillips and we are obliged to consider its role from 2016. That process is already under way.

My first question was by the way. My second question was about a disruption to Dublin Port. For example, if a boat sank then I would accept readily a much more likely contingency plan. If one cannot get oil into Dublin Port, or one cannot use the terminal to get more oil in, having it on the island is not much good. Is there storage in Northern Ireland?

In Kilroot, County Antrim, and there is also one in Derry. It might be something, Chairman. Nobody is concerned about energy security when one flicks the switch and the light comes on. Similarly, nobody thinks much about an emergency in this area but if it were to happen it would have grave consequences. Perhaps the committee might consider inviting the chief executive and chairman of the National Oil Reserves Agency to attend to deal with strategic questions like those posed by Deputy Ó Cuív. He asked if we had planned for every eventuality and have a contingency plan. During my discussions with the agency my knowledge of the matter was greatly improved and I am confident that it has provided, as best it can, for such circumstances.

Amendment agreed to.
Section 20 agreed to.
Title agreed to.

I thank the Minister and his officials for their attendance and for informing us about the various amendments. I also thank members for their attendance.

Bill reported with amendments.