Electricity Regulation Bill, 1998: Committee Stage (Resumed).

I welcome the Minister for Public Enterprise and her officials. Before moving to the next amendment, I am required to read into the record the correct wording of amendment No. 30, as amended in committee:

To insert "and taking account of matters raised in the public consultation process" after paragraph (b).

I forgot to raise one point. It concerns section 4 where there is a stipulation that a notice can be served on a 16 year old. The Minister will need to re-examine that because it can only be served legally on an 18 year old.

That is correct. Deputy Stagg mentioned that to meen passant when we were voting in the Dáil.

Privately.

One has to be 18 before one is an adult, so how can it be served at 16? We will look at that matter. It seems very odd to me.

I sought legal advice and it was to the effect that it should be 18.

My advice was the same. We will check on it.

SECTION 8.

I move amendment No. 35:

In page 10, subsection (3), lines 20 to 24, to delete all words from and including "which--" in line 20 down to and including line 24 and substitute "which does not discriminate unfairly between holders of licences, authorisations and the Board, and they consider protects the interests of final customers.".

Section 8(3) states:

It shall be the duty of the Minister and the Commission to carry out their functions and exercise the powers conferred on them under this Act in a manner which-

(a) does not discriminate unfairly between holders of licences, authorisations and the Board, and

(b) the Minister or the Commission, as the case may be, considers protects the interests of final customers.

I find fault with the section on a number of bases. We should take amendments Nos. 35 and 36 together.

Is that agreed? Agreed.

The word "unfairly" appears after the word "discriminate". Discriminate means that it cannot be unfair. "Unfairly" is a very subjective word. What is unfair to one person would not be so to another. The meaning of the word "discriminate" is clear. The word "unfairly" should be deleted.

It does not make a great deal of sense, however, because subsection (3) refers to "the Minister and the Commission", while paragraph (b) refers to "the Minister or the Commission". That is everybody's business and no one's. Subsection (3)(b) should read "the Minister and the Commission".

Has the Deputy tabled an amendment to that effect?

If so amended, section 8(3) would read:

It shall be the duty of the Minister and the Commission to carry out their functions and exercise the powers conferred on them under this Act in a manner which-

does not discriminate between holders of licences, authorisations and the Board, and which they consider protects the interests of final customers.

That would be much clearer than the present wording. In addition, the ambiguity between the Minister and the Commission on protecting the public interest would be removed. It is not an issue of principle but it is an attempt to state the case as clearly as possible.

There are two points in the amendments. One seeks to link the Minister and the Commission in carrying out their duties. The commissioner will be an independent regulator and will have to have a measure of independence. I see the Director of Telecommunications Regulation, Ms Étain Doyle, approximately every three months when she pays a courtesy call and lays a document before me, which is ready to be issued. I do not interfere in her duties, nor she in mine. Some independence is required if one is to have an independent regulator. I will not be toing and froing much, once the commissioner or regulator is up and running. It would be an unholy alliance to join together the Minister and the Commission. It would not work for the benefit of either the participants in providing energy, or the consumers in obtaining it.

Section 8(3) states

It shall be the duty of the Minister and the Commission [it does not say it shall be the duty of the Minister until the Commission is appointed] to carry out their functions and exercise the powers conferred on them under this Act in a manner which——

(a) does not discriminate unfairly between holders of licences. . .

Subsection (3)(b) refers to "the Minister or the Commission".

Collectively, it is the duty of the Minister and the commission but individually, on issues which arise, it would be the duty of the commissioner.

This is one of the sections which makes this Bill very good legislation. The Minister retains a large measure of power and will operate in tandem with the commission. The commission has powers and responsibilities but the Minister also retains powers. This fits with the Attorney General's view expressed in the very valuable paper he produced. Section 8(3) refers to the "Minister and the Commission" while section 8(3)(b) includes the words, ". . . the Minister or the Commission, as the case may be. . . " I do not understand why the word "and" is used in one case and "or" in the other. The use of the word "or" allows for the possibility of everybody and nobody being responsible. I would prefer to see "and" used in both cases.

I can see why Deputy Stagg might be puzzled. This is a complex Bill. I was interested to hear that Deputy Stagg, like myself, prepares himself each day only for those sections which he thinks the committee will have time to deal with on that day.

Section 8(3) is like the prologue to a book. It states that both the Minister and the commission have duties. In the exercise of those duties, the commissioner will be independent. The Minister will retain a broad policy remit but in the commission's day-to-day working, the regulator - or commissioner - will be independent . In section 8(3)(a) and (b) the reader proceeds, so to speak, from the prologue to the main body of the book. These paragraphs explain that it is the job of either the Minister or the commission to deal with particular matters as they arise. To join the Minister and the regulator at this point - the day-to-day working of the commission - would be to make the regulator powerless and to give inappropriate powers to the Minister.

The Minister will have the power to ensure that there is no discrimination between holders of licences, authorisations and the board. The commission will also have this power and will exercise it jointly or separately with the Minister. However, the interests of final customers will be exercised by the Minister or the commission. There is a danger that neither the Minister nor the commission will exercise this authority and the interests of final customers will not be protected. If the word "and" or the wording suggested in the amendment was used, this ambiguity would be removed. I will withdraw the amendment if the Minister undertakes to try to improve the wording of this subsection so that the game of pass the parcel cannot be played by the Minister and the regulator.

The Minister and the regulator will each have his or her duties. At present, the Minister appears to have very little power compared with the regulator. The Minister has a general policy remit but I have yet to decide on any policy matter. Perhaps this is just as well.

Before the Director of Telecommunications Regulation, Ms Étain Doyle, came to this committee, Deputy Yates was wont to berate me for not telling the regulator that licences should be issued to this or that deflector group in this or that county. However, the legislation states very clearly that the regulator has the power to make these decisions and not the Minister. Ms Doyle has presented me with an excellent and very sensible document setting out her powers with regard to deflectors. If the Bill stated that the Minister and the regulator must decide every matter jointly, no business would ever be done. I am by nature interventionist. If my interventionism were supported by legislation, there might be no stopping me.

This does not make sense. The Minister appears not to see the contradiction in this subsection. Why must the powers of the Minister and the commission be referred to twice? Would it not be simpler to say: "It shall be the duty of the Minister and the Commission to carry out their functions and exercise the powers conferred on them under this Act in a manner which does not discriminate unfairly between holders of licences, authorisations and the Board and they consider protects the interests of final customers"?

Either the Minister or the commission will decide on the minutiae. Final customers are very important. It would be wrong to establish a commission, give a regulator powers and then have the Minister intervene in the everyday exercise of those powers.

What the Minister wishes to do is not important. The Bill gives the Minister the responsibility for protecting the interests of final customers. The commission is also given this responsibility. The use of the word "or" makes it unclear who is responsible.

Mr. Brady

Is it correct to say that the Minister and the commission have two different sets of powers?

That is not what is set out in the Bill. That is not my interpretation.

Section 8(3) says, "It shall be the duty of the Minister and the Commission to carry out their functions. . . " There are clearly separate functions.

In section 8(3)(b) the words "as the case may be" are used. Does this clarify matters?

The subsection refers first to global responsibilities and then proceeds to the duality of separate responsibilities.

It must not be recorded that the Minister has no responsibility in this matter. The Minister is being given legal responsibilities and duties. The Minister will not be allowed to tell the commission to do its job and merely report once a month. I am delighted to say that the Minister will have direct and immediate responsibility in this matter, as will the commission.

The Minister and the commission will have responsibilities between them, as the case may be. The Bill does not give the Minister every power linked with the word "and". This will be very clear when we have discussed the entire Bill.

I am afraid the use of the word "or" allows for responsibility to be given to everybody and nobody and for the final customer to fall between three stools.

That is unfair to the regulator.

I do not intend a personal criticism of the Minister or the regulator.

I know that. As Minister, I will exercise my duties and the regulator will do the same but we will not exercise them jointly. We are not together on everything.

I hope the Minister will consider better wording which will achieve the same effect.

Will the Minister agree to re-examine the wording of the subsection before Report Stage?

I do not object to that but Report Stage may be very difficult. Almost 180 Report Stage amendments were tabled for a Bill which was discussed last week. I will consider the wording on Report Stage if Deputy Stagg resubmits the amendment.

Amendment, by leave, withdrawn.

I move amendment No. 36:

In page 10, subsection (3)(a), line 21, to delete "unfairly".

The word "unfairly" is unnecessary. Article 3(1) of European Directive 96/92EC, which underwrites this legislation, states that "member states shall ensure on the basis of their institutional organisation and furthermore shall not discriminate between these electricity undertakings as regards either rights or obligations". The conditional duty, therefore, not to discriminate is not appropriate in this instance. The terms of the legislation make the word "unfairly" unnecessary in this case and I suggest it can be deleted.

I have seen the phrase "positive discrimination" used, particularly in relation to women's and minority rights. The word "unfairly" is subjective, particularly when the word "discriminate" has such a clear meaning.

I acknowledge the difference between objectivity and subjectivity. When the Bill was being drafted the parliamentary draftsman approved of the word "unfairly". The word "unfairly" is superfluous. Discrimination or treating people differently is not a problem in itself whereas unfair discrimination implies that a person has an advantage or a disadvantage over another. That is what the word "discriminate" means as well. I am told the word "unfairly" could lead to constant challenges.

If the word "unfairly" is not included in the Bill, it will be discrimination because that is part of the decision-making process. I understand the qualification, but I also understand the difficulties. One assumes that the State and all its organs will behave in a way which is fair. If we do not qualify the issue of positive discrimination, a positive decision could be challenged. I have not seen the word "unfairly" used before.

We all know about positive discrimination. There should be positive discrimination in favour of disadvantaged children, for example, in areas such as education. Treating people differently is not a problem in itself. Unfair discrimination implies putting one person at an advantage or a disadvantageover another. It is not a problem which can be easily resolved, but the word "unfairly" is needed.

It is a strange word which I do not recall being used before. I can understand the need for it because one might have to discriminate if a decision is made in favour of one or another. It needs some qualification. The difficulty is the unusual use of the word.

The Minister did not respond to my point about the directive which does not allow discrimination between electricity undertakings. On that basis, it is superfluous.

The directives states: "shall not discriminate between these electricity undertakings".

I am advised the conditional duty not to discriminate is not appropriate because of the wording of the directive.

We do not use the true English meaning of the word "discriminate" because to discriminate is to make a difference. We do not want to discriminate unfairly when making decisions.

The word "unfairly" suggests an opinion rather than hard facts.

It raises the question as to who is or is not unfair.

What the ESB would regard as unfair, Northern Ireland Electricity might regard as fair.

I have no doubt about that.

It is a matter of opinion what is or is not fair. One will decide if something is fair depending on one's position. It is not right to ask the Minister or the regulator to make a decision based on fairness. "Discriminate" is a scientific word which is used in the directive without the word "unfairly". This is like being doubly certain.

I am not definite about this because I am bearing in mind what the phrase "to discriminate" means. We are leaving it to the regulator to decide whether it is discriminatory. If the word "unfairly" is added, it will put another onus on the regulator to decide and that could lead to court challenges. We will look at this again before Report Stage. The more the issue is probed, the more it throws up.

Amendment, by leave, withdrawn.
Amendment No. 37 not moved.

Amendment No. 38 is next. Amendments Nos. 42 and 46 are cognate, amendment No. 47 is an alternative to amendment No. 46 and amendment No. 48 is related. Amendments Nos. 38, 42, 46, 47 and 48 may be discussed together.

I move amendment No. 38:

In page 10, subsection (4)(e), line 36, to delete "promote" and substitute "secure".

One promotes a circus or a politician by displaying posters. I presume the intention is to have campaigns "to promote safety and efficiency on the part of electricity undertakings". I would prefer the word "secure" in this context. The Minister and the regulator should ensure that whatever action is required to ensure "safety and efficiency on the part of electricity undertakings" will be taken. The word " promote" is so soft, it suggests there is no need for safety and efficiency. It is more of a wish than something which should be done.

Amendment No. 42 seeks to delete "encourage the efficient" and substitute "secure the efficient production and". I am saying that instead of saying, "to encourage the efficient use of electricity", it should be "to secure the efficient production and use of electricity". The word "production" should be included as well as "use". The efficient production of electricity is important, so we should be seeking the most efficient production as well as use of electricity. If we have an inefficient use of electricity, we will be using large volumes of raw materials, such as gas, oil or other energy sources. The only such source we could afford to be inefficient about is wind, because we have lots of it, hot and cold.

The same argument applies to amendments Nos. 46 and 48. We should be examining the efficient production and use of electricity rather than just the efficient use of it.

The Chairman has quite rightly grouped all these amendments together. They seek to impose upon the Minister and/or the commissioner/regulator a finality about their dealings by using the word "secure", which it is not possible to achieve. I understand Deputy Stagg wishes to substitute the word "secure" for the words "promote" and "encourage". However, to insert the word "secure" implies that the person so doing - in this case the regulator - would be absolutely and legally bound to ensure and to be responsible for any unsafe act that occurs in any of the duties.

The section is important but it is also important for us to be clear about what we are doing. While the desire to give the commission and/or the Minister a strong set of duties to guide the performance is understandable, a duty to "secure" something means the person is bound to ensure it happens. In this case it would not be possible to carry it out. The outcome would be that in legal proceedings the regulator would have legal liability for any case where safety was at issue. He could not take on that responsibility, individually or otherwise.

Amendment No. 42 seeks to delete "encourage the efficient" and substitute "secure the efficient production and". This amendment is even more interesting because it would not be possible to ensure efficient production from every power station in the country. It would not be the regulator's job to do so. The commission could not ensure that all customers used electricity efficiently. That is up to the expertise of individual customers. One would hope they would all be committed to the efficient use of electricity but one cannot lay down in law that they should be.

Amendment No. 46 seeks to change the duty of the commission to encourage research and development. Deputy Sargent's amendment No. 47 seeks to "facilitate, foster, resource and support". Amendment No. 48 seeks to include the word "production".

Worthy as they are, these amendments seek to put a straitjacket on the regulator so that if there was inefficient production or use of electricity he would be responsible. The 1994-5 report on peat stations laid out the shelf life of some stations around the country. In the context of safety, if we inserted the word "secure" the regulator would have legal liability for any case where safety was an issue. That, however, is not his job.

That sounds like a sort of Pontius Pilate washing of hands and that nobody will be responsible for ensuring fuels are used efficiently. I am sure it is not the Minister's intention to say that nobody will do it, but the danger is that no one will. The Minister suggests that some power stations cannot be as efficient as others, but they can be efficient within their own parameters.

For example, the old turf burning stations are not as efficient as new gas turbine but they could be much more efficient than they are. If the ESB treated other turf stations like the one at Bellacorrick they would be much more efficient. They would not be lying idle for much of the time, thus getting a bad name because they do not produce electricity.

There is a case for making the producer efficient and introducing penalties for inefficient producers. Those who waste fuel producing electricity should be penalised. They may be penalised by the market because they will not be as profitable as other producers. The Minister should insert the words "to seek to ensure" because "promote" is such a soft word.

But, equally, "secure" is a hard word.

I accept the Minister's point that it is a very hard word. However, if the commission was to seek to secure, it would not be absolutely binding. The regulator would, however, make the best effort he could to secure it. That is much better than saying "promote" which could mean putting up one poster in the back of the regulator's own office. I am not suggesting that is all the present Minister or the proposed commissioner/regulator would do.

Who is doing the promotion for MEP Bernie Malone and Deputy De Rossa? Did the Deputy see the way she is above him in the picture. It is really interesting.

It is right to strengthen the area of fuel efficiency and the efficient use of electricity. I hope the Minister accepts that we should include the efficient production of electricity also, whether promoting, securing or seeking to ensure it. That would be along the lines of what the Minister has argued. That was what came to my mind as the Minister made her argument. What she said was much more than promotion; it was seeking to secure. That would give the commission the right to go after those who waste primary fuels and the finished products as well.

There is no doubt that these amendments are well meant but they would spancel the regulator in carrying out his duties. They would seek to give him duties, in law, which he cannot legally stand over. How could he secure safety?

That was the last point I made. It should be his job to try to do that.

I am sure he will be well meaning and will seek to do his best. I would be a bad legislator if I accepted these amendments, well meaning as they are, and so spancelled the regulator, giving him duties he could not do.

I am not suggesting any such thing. Will the Minister tell us what she means by "promote" and "encourage". What sort of encouragement is she talking about?

"Promote" means to encourage. It is just another word for it. To promote is to make your views or directions known. It may mean putting it in writing, on posters or in directives. To encourage is to be positive with a person about whatever is going on or whatever one wants to do. That is what to "promote" and to "encourage" mean. One promotes people in carrying out their jobs and one encourages them to work.

This seems like a wish list.

No, it is not. I have studied this question carefully. I have no intention of spancelling a regulator and obliging him to do something which I know he cannot do.

There is no question of spancelling a regulator. My amendment would give him authority and responsibility to do this. I cannot understand how this would spancel him. It would give him a real role in the conservation of primary fuel and its efficient use.

The word "secure" is the most difficult one could find. The use of the word imposes an absolute obligation to do something.

I have suggested a word between "secure" and "promote".

The term "seek to secure" is neither one thing nor another.

The wording in the subsection is useless. It is merely window dressing.

I am absolutely sure the wording of this subsection is correct. I am not so sure about the wording of other subsections.

Will competition be affected by it?

It is wrong to put into legislation things which cannot be done.

Of course it can be done. I do not understand how it cannot be done.

How can safety be secured? One cannot guarantee that there will not be an accident every time one travels by train.

One can ensure that safety measures are in place.

That is what one does; but one cannot secure the fact that there will not be an accident.

One can ensure safety measures are in place.

Will the Minister agree that, as well as the efficient use of electricity, we should also promote and encourage the efficient production of electricity?

The Commission will dothat. The ESB is entering the age of competition and other suppliers will enter the field. It will be the job of the ESB to make its plants as efficient as possible in the production of power. The company will want to do this to make itself more competitive.

I spoke earlier about the inefficient use of peat burning power stations. Competition will not affect them.

Not for some time.

Probably for as long as the turf lasts. I would like these stations to be used efficiently; they are not being used efficiently now by the ESB.

To which stations is the Deputy referring?

I am referring to stations in which boilers break down and are not repaired for three years.

Has the Deputy considered the possibility that this might be done deliberately?

It is done deliberately. The ESB deliberately downgrades turf burning electricity generating stations. This has social consequences. If the Bill obliges the regulator to promote the efficient production of electricity, it will be his duty to ensure the ESB ends the practice of running down turf burning stations with the ensuing social consequences in many areas of the midlands. The Minister is aware of the problem to which I refer.

These stations will not be affected by competition.

They will be affected by the public service obligations, but it is not correct to say they will not be affected by competition for a considerable time.

It would be very useful if legislation could allow the Commission to point out to the ESB its inefficient use of turf burning power stations.

Has Deputy Stagg considered the opposite side of the coin? In an era of competition, the ESB will have to take account of its competitors and of the economy of its operations and make decisions accordingly. The company will not need to be persuaded to run its plants efficiently. Public service obligations will be shared by everyone and it is not clear how long the PSOs will continue.

In that regard, unless the existing turf burning stations are replaced by another Europeat II——

The Kyoto agreement would not allow it.

——we cannot say for how long the PSOs will continue? This is pertinent to this amendment.

The amendment regarding production is pertinent to the PSO.

Let us forget for the moment about inserting the word "secure". It is important that the Minister and the Commission promote and encourage the efficient production of electricity.

Does the Deputy agree not to insert the word "secure"?

I do not understand why discussion of amendment No. 48 is included with the others in this group. It appears to address the separate issue of production, on which I support Deputy Stagg. With regard to amendment No. 47, I understand the Minister's point that the word "secure" carries an implication which we cannot consider here.

My amendment is self explanatory without being severe. It proposes that research be facilitated, fostered, resourced and supported as well as encouraged. Are we serious about encouraging this research and development? To say competition will ensure such research and development is carried out is not to face up to the reality of competition. If competition is the only yardstick used, research will not be done because it costs money. The Danes or some other enterprising country will do the research and we will benefit from their crumbs. I ask the Minister to expand on her proposal to encourage research and development and to note my amendment. The public service obligations and other long-term factors will not meet the criteria of competition in the current economic system. There must be a higher cost on fossil fuels. If this is not accept-able, we must provide resources to encourage research.

I am encouraging research.

Encouragement is all very well; in 1981 Charles Haughey encouraged us to tighten our belts.

He did not tighten his own.

Encouragement is not very credible in the world of politics. We require more than encouragement. That is the purpose of Deputy Stagg's amendments and mine. My amendment would give more scope for explaining what is being done rather than simply securing the research. I would like the Minister to bear this in mind for Report Stage if she cannot accept these amendments now. There is ongoing research but it has not been supported, whatever about being encouraged. It has run into the sand.

The regulator will get his finances from the industry. Ms Etain Doyle gets her finances from the telecommunications industry. It pays a levy and she does her work. The research the Deputy mentioned is into alternative forms of energy. I do not know if the industry would fund such research.

We could ensure it funds it.

I presume Government finances will be available to carry out numerous public service obligations.

The regulator is funded by a levy from the industry.

If the regulator believes that research should be facilitated, surely he will look for money from some source.

There is only one source and that is the industry. The industry funds the regulator.

Does the Minister understand my scepticism and that of Deputy Stagg about the word "encourage"?

I do not accept the word "secure" because it imposes legal obligations.

I appreciate that, but I ask the Minister to look at the other words.

I will accept the word "production" which can be encompassed under the public service obligations. The public service obligations will have to be pushed along, parameters set and the eventualities worked out. The word "secure" is too strong.

Amendment No. 47 seeks to insert "facilitate, foster, resource and support". There is little difference between "encourage", "facilitate" and "foster". "Support" relates to financial support.

The wherewithal must be put in place to facilitate something.

"Foster" is another nice word. The words "facilitate" and "support" denote money. One cannot carry out research without finance which must come from the levy. The levy would come from the industry and the industry would facilitate, foster, support and encourage research into alternative forms of energy.

We are talking about a public service obligation.

We were talking in a utilitarian sense about the public service obligation on the older stations which are not operating efficiently. The public service obligation will be on everyone to sweep them in.

I agree with the Minister. Research would indicate that a viable wave or wind power station would most likely be located in economically disadvantaged areas. Our public service obligation should go beyond the historical meaning of supporting a turf station to looking at possible future technologies. Disadvantaged areas are ideal for renewable energy generation.

I cannot accept the word "secure" in amendment No. 42 because of its finality, but I can accept the phrase "efficient production".

Amendments Nos. 46 and 47 deal with research and development. I have no difficulty with research. Ms Etain Doyle did much research before she published the deflector document at the weekend.

Where did she get the money?

She got it from the telecommunications industry. She gave a lot of money back to the Department of Finance this year which the industry had oversubscribed. Her research was done to find out about spectrums, digitalisation and the experience in other countries, not to find another form of telecommunications. I am concerned that we will include something for which the regulator will not get money. The Department or the Government will not give money to a regulator because the industry funds it. There should be ongoing research into further types of renewable energies.

If the industry, the regulator and the Minister agreed it was desirable to do research, would they be prevented from doing so because it is not specified in the legislation?

It is not anultra vires situation.

No. We would be saying the regulator would have no ideas on what needed to be done, when that would not be true. He may wish to do it but he would have to secure his finances before he could do so. I am not worried that he might not do it of his own volition.

I would like to be as optimistic as the Minister but I am concerned that the industry may not be inclined to make long-term investments.

Where then will he get the money to do it because he will be funded by the levy?

We are talking about the fundamentals of the legislation. Research and development will not be encouraged under this legislation.

Amendment No. 48 seeks to insert "production and" in subsection (5)(d)(ii) so that it reads: "methods of increasing efficiency in the production and use of electricity".

I will accept the word "production".

We will wait until we get to it before we formally decide upon it. Amendments Nos. 39, 40, 49, 50, 51 and 196 are related and may be discussed together by agreement.

Amendment No. 38, by leave, withdrawn.

I move amendment No. 39:

In page 10, subsection (4), between lines 37 and 38, to insert the following:

"(f) to promote the use of renewable and alternative forms of energy.".

Amendments Nos. 39 and 50 are straightforward. Section 8 deals with the functions and duties of the commission. In terms of duties, I am seeking to insert the words "to promote the use of renewable and alternative forms of energy". This spells out the need to which both the Minister and the Commission must have regard when exercising their duties. There is a consensus on the committee that there is an overwhelming need to integrate the concern for the environment into all decision making. Therefore, this amendment is worthy of inclusion. Amendment No. 40 is virtually identical and amendment No. 49 is similar.

Amendment No. 50 relates to functions and seeks to insert a new subsection (6) to section 8, as follows:

"(6) The regulatory Commission shall require that the system operator, currently the Board, when selecting generating installations gives priority to generating installations using renewable energy sources.".

According to the EU directive?

Yes. In particular, wind energy stands out. It is a primary energy source which meets our commitments to CO2 abatement under the Kyoto Protocolumn In addition, it is an indigenous resource which does not have to be imported and, as the Minister said, the principle is advocated in the EU directive. These are substantive issues and it is important that Mr. Reeves and the Minister - whoever he or she may be - highlights the need to use renewable energy sources.

Amendment No. 49 is critical and has particular relevance. The way it is dealt with will have a significant effect on the viability of the wind industry and any renewable energy sources that depend on the elements. The amendment would "require that the system operator give priority to generating stations using renewable energy sources when selecting generating stations". The Minister should consider the scenario of demand for power increasing at any particular time. Let us say that a combined heat and power plant, or any other fossil fuel plant, is on standby along with a wind farm. However, if the wind is blowing, wind energy operators should be able to assume that because power is available and flowing out of the wind farm, it will be taken. One of the drawbacks of renewable energy is that it requires that type of revision. Italy has this type of legislation which is important for the potential of wind energy. Italian law provides that when there are two sources of power on standby, wind-generated energy will be taken first. However, it might not be there again in a similar situation, when the fossil fuel operator kicks in and we get the power. The Minister should seriously consider this matter to ensure the wind industry reaches some level of potential and people can be assured it will be there on standby and will be taken, and not left aside for whatever reason.

In that case, how does one ensure that there is not unfair discrimination? We debated that point earlier - that the commissioner is meant to operate in a non-discriminatory manner.

We wanted to take out the word "unfairly", but the Minister wanted to retain it.

I was using the word discriminate in the proper sense.

We are for discriminating in favour of wind.

This is not a case of discriminating or being unfair or biased. It is a case of recognising the world as it is. Unfortunately, the elements do not come under the control of the Government or any regulator. There is only one regulator in that department.

There is an all-seeing regulator, I hope, who will put us all right eventually.

I see great merit in the proposal and there is no problem with unfair discrimination if one indicates, in a stepped format, which energy source should be used by way of preference. It is in the public interest that a non polluting, renewable resource that comes from the bounty of nature, should be used first. It should be encouraged for two reasons. First, a non-polluting energy source would discourage the use of a polluting alternative. Second, any form of positive discrimination towards wind energy would be beneficial because it would be an inducement for people to invest in it. There is a habit among engineers that if they are faced with alternatives they will choose an engineering one.

That is what they are trained in.

There is nothing wrong with that and it is as one would expect. It would make a great deal of sense if the Minister could factor this in.

I see the point. We accepted an amendment earlier concerning our commitments to reduce CO2 emissions under the Kyoto Protocolumn The greater good is served by lowering emissions and we all, with varying degrees of enthusiasm, seek to bring that about. If that is the overarching principle, the amendment would fit in.

Renewable and alternative forms of energy are already promoted in the Bill. Section 8(5)(a) states it shall be the duty of the Commission "to take account of the protection of the environment". Section 8(5)(d) states it shall be the duty of the Commission "to encourage research and development. . . ". Section 27, which we have not yet come to, states that access is given to any customer to choose electricity generated from renewable and alternative sources. This will increase the demand for such electricity. The amendments are very good.

Is the news good or bad for us?

The news is good but we have to put it in legal language.

That is acceptable to me.

I do not know whether the Minister is dealing with the amendments in a generic sense. Amendment No. 49 is a stand alone one because of its incredibly important aspect. The wind industry places great emphasis on this because it sees the future possible investment in wind resting to a considerable extent on the success of Deputy Yates's amendment and mine.

Is the Minister accepting the general point?

I accept the general point.

Is the Minister dealing with this specific point when she says the amendments are good?

I have said that I accept the amendments in principle. I do not know if the wording is acceptable.

I am happy to proceed on that basis.

We may now discuss amendment No. 196.

May I say a word on that amendment?

Some of my amendments are included in this group, Sir. I do not understand the grouping of these amendments. I understand why amendments Nos. 49, 50 and 51 are together but I do not understand why they are grouped with amendments Nos. 39, 40 and 196.

The Bills Office is responsible for grouping amendments.

With regard to amendment No. 40, I ask the Minister not to reject this amendment before I make a case for it. The amendment proposes that the commission secures the use of renewable and alternative sources of energy for generating electricity.

I am putting a bracket around the word "secure".

If the Minister puts a bracket around "secure" she will be promoted. We should secure renewable forms of energy. If amendment No. 40 is accepted there will be no need for amendments Nos. 49 and 50 which propose that renewable forms of energy be given preference.

I cannot accept the word "secure".

I know the Minister does not like the word "secure". Amendment No. 51 bears no relation to the others. I do not understand why it is grouped with them. It proposes that a supply of electricity from peat resources, in accordance with section 28(2)(a) and from renewable or alternative sources of energy, in accordance with the provisions of section 38(2)(b), be secured in the most viable manner possible. I do not see how this relates to the other amendments.

Neither do I.

The amendment refers to renewable sources of energy.

I am prepared to withdraw amendment No. 39 on the basis that the Minister accepts the principle of it.

Amendment, by leave, withdrawn.
Amendment No. 40 not moved.

I move amendment No. 41:

In page 10, subsection (5)(a), line 40, after "environment" to insert "locally, regionally, nationally and globally".

According to the principle of subsidiarity, one deals with the protection of the environment, like anything else, at the lowest effective level. This amendment takes note of that.

The prospect of being globally responsible for the environment induces megalomania in me.

We are all globally responsible for the environment.

I do not think my ministerial colleagues would tolerate my claiming to have a global responsibility - for anything.

I would be disappointed if the Minister did not.

Amendment, by leave, withdrawn.
Amendment No. 42 not moved.

I move amendment No. 43:

In page 10, subsection (5)(b). line 41, after “electricity” to insert “, in particular the use of combined heat and power”.

Some of the Minister's officials were kind enough to contact me about CHP. I spoke about this problem previously, with regard to the national convention centre. The ESB says that, because of its workload, it cannot provide power conventionally until one year after the proposed opening date of the national convention centre. All efforts, including political efforts, have failed to move the ESB from that position. If the centre is not opened before the earliest date made possible by the ESB, the £26 million EU grant will be lost and the national convention centre will never be built.

When is the proposed opening date?

I do not know that. Deputy Stagg gave us a very graphic explanation of how hot air which goes up a chimney can be rerouted and used again. The Minister reminds me of St. Augustine who was full of good intentions.

St. Augustine prayed that God would make him good, but not yet.

The Minister will be made good by CHP.

It was St. Augustine who said the way to hell was paved with good intentions.

The Minister may wish to comment on the national convention centre. It is not my proposal. It is a Government proposal and is included in the national development plan and the operational programme for regional development.

I support what Deputy Yates said. The situation is as he described it. The national convention centre organisers have failed to convince the electricity suppliers to give them a supply for the systems required in the centre.

The organisers have not been in touch with me.

The situation is unacceptable.

Is that stated in a letter?

Yes, in detail. They say their workload is such that they cannot meet this requirement. It relates to a customer who uses a great deal of electricity. It is a prestigious national project which is very important. They are very happy with the amendments proposed by other Members and the Minister for the inclusion of CHP which will allow them to produce their own electricity.

It is very important to support CHP in any practical way possible. I visited Denmark some time ago to look at how they deal with waste. The incineration of waste in terms of combined heat and energy resources is quite marvellous. The power stations are old, small and on the outskirts of towns and they provide heat and energy. The main point is to reach a critical area.While the power stations are relatively small, they must reach a certain critical masse. We have, in this project, one such example which reaches that critical masse and we are being told that because the Electricity Supply Board has a work schedule it cannot support it. There is something fundamentally wrong with that. It harks back to the 1950s.

Deputy Stagg referred to peat. The Government had to take a decision to instruct the ESB to use peat because its engineers did not favour that method. The arguments put forward here are artificial. There should be some legislative encouragement for this project from across the political divide. The ESB should be encouraged to be a little more proactive in that for the first time we will have CHP, which is very efficient - there is an efficiency rate of 80 per cent. It is quite extraordinary that the ESB will not support this project. If we could encourageit to be more proactive it would be very beneficial.

I want to encourage the use of CHP as the most efficient fossil fuel available. One of the duties of the Commission is to encourage the efficient use of electricity, but we must be careful not to close off possible efficient uses. We are not talking here about efficient production.

It is efficient production.

Efficient use and production. The efficient use of electricity is something we have not been able to achieve. We are extremely inefficient users of electricity.

And of water etc.

Yes, but we must become more energy conscious in terms of energy audits in our buildings, public, private and domestic. While encouraging the efficient use of electricity, we must not lose sight of the wider responsibilities in energy efficiency by talking about production rather than use. Perhaps there is a need to include "to encourage the efficient production of electricity". I agree with the spirit of the amendment but I want to make sure we do not close off doors by drawing attention to efficient production of electricity.

We have agreed to accept the amendment about production.

That is why I am stressing that energy efficiency needs greater reference.

The Minister has accepted that it should read "encourage the efficient production and use of electricity".

Deputy Yates is seeking to include "in particular the use of combined heat and power".

If it stated "including combined heat and power"——

That paragraph of the Bill is aimed at encouraging the efficient use of electricity in terms of power consumption and appliances, lagging jackets etc. which we are all supposed to use. A reference to methods of generation such as combined heat and power would not be appropriate here, but it is appropriate in amendment No. 59. This amendment is not necessary as combined heat and power is already being promoted by way of my amendment No. 59 which was the subject of tortuous writing and rewriting.

People contacted me to say that amendment No. 59 does not go far enough.

It is stated that "the Minister [rightly, in my view] has succumbed to pressure from the wind lobby [I never met a wind lobby in my life] and has amended the——

The Minister is not quoting the relevant points. She should not throw the baby out with the bath water. The national convention centre is a good project.

Yes, I agree.

The ESB cannot supply the electricity.

It may well be that I had a letter from Treasury Management——

They are not showing the Minister everything.

——but it did not come to see me about that matter. The concept is right but we will deal with it in amendment No. 59.

I will not labour the point. I thought it was appropriate here in the context of efficiency. I will withdraw the amendment and consider it for Report Stage.

Section 8(5) states "without prejudice to subsections (3) and (4). . . . ". That, as far as I understand it, means that we can be unfair and can discriminate.

To take account of the protection of the environment.

Yes, and to encourage the efficient use of electricity.

The Deputy is harking back to an earlier debate.

Yes, in relation to the use of the word "unfair".

We have already accepted those amendments.

Do the words "without prejudice" mean we can be unfair and can discriminate?

They are normally secondary duties but we have made them principal duties by accepting the group of amendments.

One usually writes a letter and states "without prejudice. . . ".

One hopes they will not take one to court for what was said in the letter.

What is its meaning in this context?

I think there is a barrister in Deputy Stagg waiting to get out.

May we have some explanation of what "without prejudice" means in that context?

I do not know. I am hearing versions which I do not quite understand. I will communicate with the Deputy later. We are going ahead with that idea in amendment No. 59.

Amendment, by leave, withdrawn.

I move amendment No. 44:

In page 10, subsection (5)(b), line 41, after "electricity" to insert "in liaison with relevant public authorities and interested non-governmental organisations".

The motivation is to achieve something similar to what the Department of the Environment and Local Government is doing in relation to various issues in that there should be sufficient openings for consultation. I propose that the wording read: "to take account of the protection of the environment in liaison with relevant public authorities and interested non-governmental organisations. The wind sector requires a considerable amount of goodwill and there should be an exchange of information with the planning authorities. The lack of planning considerations creates major problems in the development of wind power. There would be a keen interest among non-goverenmental organisations, for instance the Irish Wind Energy Association, in having as part of their brief to take account of the protection of the environment, an opening for consultation which will be provided by the insertion of the words "in liaison with relevant public authorities and interested non-governmental organisations". It would be useful and could avoid unnecessary blockages on account of the narrow focus of the commission.

The commission would have every intention of liaising and consulting with public bodies, local authorities and other individuals. The regulator could not carry out his duties without consultation. The regulator will want to engage with people. There is no need to mandate him to consult, or to labour the point.

I am reassured to some extent by what the Minister said in such definite terms. People reading this, would welcome that there is an opening for the commission to consult because it is not obvious. The words "to take account of the protection of the environment" could mean a person might take a look around. It does not necessarily mean there will be consultation.

The regulator will have endless liaisons.

The amendment is to encourage the efficient use of electricity in liaison with relevant public authorities and interested non-governmental organisations.

I take Deputy Stagg's point. It probably requires a section——

It should be paragraph (a).

There was a mistake in the drafting. The principle is still relevant whether it is paragraph (a) or (b) because people will want to know about the consultation and that it is not a closed shop commission.

It will not be. Our only experience of a regulator is that she does not operate a closed shop.

She tried to.

The Deputy knows that happened because the 1996 legislation was faulty.

The Minister is above all this. We were down on the ground.

I have opened a can of worms.

She is doing very well. The regulator will liaise with anyone.

I will not labour the point. The principle should be more obvious than just reassuring us how good the regulator will be. That is all very well but unless there is a CD-ROM or an explanatory tape from the Minister it is not obvious that there will be consultation.

Most people are aware that they can and should approach bodies, councils, regulators and so on to stand up for themselves and put forward their case. It is not an ogre.

I am not so sure. I will withdraw my amendment and hope its principle might be taken into account on Report Stage.

Amendment, by leave, withdrawn.

I move amendment No. 45:

In page 10, subsection (5) (c), line 42, to delete "take account of" and substitute "ensure that provision is made for".

It is important that more than account should be taken of the needs of rural customers, the disadvantaged and the elderly when we are talking about supplying energy needs. At a minimum, provision should be made for them. I will not labour the point unduly as I am sure the Minister will agree with me.

As it is almost 4.10 p.m. perhaps we will adjourn.

We will go into private session.

The Select Committee adjourned at 4.05 p.m.