Are Members of the opinion that we should suspend for the Order of Business in the Dáil?
Electricity Regulation Bill, 1998: Committee Stage (Resumed).
I do not know if firm arrangements have been made in respect of the summer recess, but it appears that the committee will have only two more weeks to debate the Bill before Report Stage is taken in the Dáil and all Stages are taken in the Seanad. I will be available at all times during the next two weeks and if dates for meetings are arranged I will be present. I am available today and tomorrow and I will forgo visiting Brussels on Thursday to be present then and on Friday. If necessary, I can make similar arrangements for next week.
We will co-operate in every way possible to facilitate meetings today, tomorrow and on Thursday.
I am due to attend a meeting of the Council of Ministers on Thursday but I will forgo doing so to facilitate the committee.
It is proposed that our meeting tomorrow should take place between 5.30 p.m. and 8.30 p.m.
Is it not possible to meet tomorrow afternoon?
There is a problem with accommodation tomorrow. It is also proposed that on Tuesday next we will meet between 2.30 p.m. and 5.30 p.m. and on Wednesday, 23 June, we will meet between 3.30 p.m. and 8.30 p.m.
There will be a problem on one of those days because the Estimates are being taken.
The Estimates will be taken between 5.30 p.m. and 8.30 p.m. Are the arrangements for Wednesday, 23 June, acceptable?
What are the Minister's plans for Thursday, 24 June?
My son is getting married on that day and I would appreciate being allowed to attend the wedding.
We are happy to co-operate. We wish the Minister's son every happiness.
What will be the duration of today's meeting?
We can sit until 8.30 p.m. with a break to allow people attend in the House for the Order of Business.
For how long will the meeting be suspended?
From 4.15 p.m. until 5 p.m. Is that agreed? Agreed.
What are the arrangements for tomorrow?
We are meeting from 5.30 p.m. until 8.30 p.m.
Is there no possibility that we might obtain the use of a room tomorrow afternoon?
I appreciate that there are problems with accommodation but we must conclude our deliberations on this Bill. For what purposes have the committee rooms been booked tomorrow?
By other committees which will be debating Estimates.
In both rooms?
A total of five Estimates are due for discussion this week.
Would it be possible to check if a room might be made available?
Yes. We will try to obtain the use of a room for tomorrow afternoon. As already stated, on Wednesday, 23 June, we will be meeting between 3.30 p.m. and 8.30 p.m.
The Bill is due in the Seanad on the following Tuesday so we will be obliged to have concluded our deliberations by that time in order to permit all Stages to be taken in the Upper House before, if necessary, the Bill is returned to the Dáil. We must make haste.
To make haste is not a bad idea. At our last meeting amendments were agreed to in the absence of Deputy Yates.
At our last meeting we agreed to leave out sections until the Deputy was available.
The sections concerned are 13, 15 and 27. Deputy Yates is grateful.
We have all been lobbied by various interest groups concerning CHP. I received a letter from the ESB which describes the information we got before as palpably false, misleading and designed to promote another agenda. It is very serious if Members - during the process of legitimate lobbying - are given information that is palpably false, misleading and designed to promote another agenda.
I also received that letter. I intend to write to its author. I am advised that it is unusual and inappropriate that anyone who has only visitor status before this committee would comment, write or attempt in any way, by way of clarification or otherwise, to interfere with Committee Stage proceedings.
I presume everyone got the same letter.
I intend to state the position as provided for in Standing Orders.
Did everyone get the same letter?
I accept the Chairman's ruling and acknowledge he is in charge of this committee. I also understand that people have the right to lobby and are free to consider what people tell them. When Deputy Yates tabled his amendments I said I had not met the people concerned; subsequently I met them. While information material was being sent to Deputy Yates it appears the group told him that "the Minister has now succumbed, helpfully we think". I was upset by that remark. I do not succumb to anyone. The letter referred to today is startling.
The promoters of the national conference centre were our original lobbyists.
l did not receive a letter from them until much later.
The promoters stated in their letter:
Our interest in CHP arose from the fact that we are building a national conference centre. The ESB cannot power it conventionally until one year after its proposed opening date due to the ESB's workload schedule. All efforts, including political, have failed to shift them. If the NCC is not operating before, the ESB state the £26 million EU grant will be lost and the NCC will never be built.
According to the ESB's letter, which is a State agency and has offered to leave their records open to inspection, their statement is false. It is a serious matter when a false statement is submitted to this committee in the form of lobbying or otherwise. I am not sure how to proceed with this matter.
I did not receive that letter until later. I am not sure how to proceed either, particularly with regard to the comment made by the group that I had succumbed. Deputy Yates informed me about their comment but it was not said to me directly. The first day we started to deal with this Bill I said that there would be a lot of strong lobbying. I have no difficulty with lobbying but you must have time and space to clear your mind and be able to make decisions. I was not subjected to the same type of lobbying as other Deputies. A fortnight ago I met the group in question and they confirmed their views. It was after that meeting that I, like everyone else, received a letter from the ESB outlining times, dates, conversations, file numbers, etc., in great detail. This is a serious situation.
I have taken account of what Deputy Stagg and the Minister said. They have stated the correct views on this matter. We did not ask for submissions from anyone in connection with this Bill. If we accept the ESB's view of the letter then it is grossly misleading. However, the ESB is well able to handle that type of situation. The Minister has clearly stated that lobbying is a feature of politics but this committee does not accept the suggestion that any Member surrendered to anyone.
I do not want to clash with the ESB. It is a State agency for whom I have the highest regard. Nevertheless I am duty bound to outline the Standing Order arrangements. I also want to ensure that this committee is not used by outside groups as an instrument to solve disagreements and confrontations on legislation.
I accept the Chairman's viewpoint.
I have not experienced this amount of intense lobbying before - and it has not been helpful. If Members had been left alone we might have done just as well with regard to legislation. Our experience highlights the need for lobbying to be regulated. If we did that we could prevent people from giving false information to the committee. The ESB did not give false information but false information was presented about it. Perhaps the Chairman would inform the relevant people that there is a need to regulate lobbying and for operating standards to be set out.
Those revelations are now being taken up by other people and passed on to me as if they were the gospel truth.
It is unfair and it misrepresents the truth.
Since I do not have a copy of that letter with me I am not in a position to comment on the matter. However, I have listened carefully to what has been said. With regard to the Chairman's comments on the ESB, I wish to state that I am proud of the company's work, achievements and success to date.
I agree that there has been a considerable amount of lobbying and that it should be regulated. Unfortunately, Deputy Yates is not present and he has not had an opportunity to discuss this matter.
I support the Chairman's stance on this issue. It is extraordinary that the ESB could be accused of being unable to provide a service to anyone here, particularly as it has served this country well. For the past two years storms have resulted in half of the country's electricity supply being cut off but the ESB quickly reconnected everyone affected. That is proof the ESB is a strong and capable company.
That does not take from the value of CHP.
With regard to Standing Orders and the points raised about lobbying, we can have Standing Orders examined to see what amendment can be made to ensure the committee's integrity will not be affected in the manner that is has been and that good use is made of our time.
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".
I tabled a similar amendment on a previous Bill. I am worried that someone could inadvertently give false information and leave themselves open to litigation.
The Deputy tabled a similar amendment when we were dealing with legislation on Aer Rianta and we had an argument about it.
I felt the words "take account of" were too weak and that we should insert "ensure provision is made for".
What is in the Bill is the correct wording. I see the point behind Deputy Stagg's argument but it goes beyond what the commissioner, regulator or whatever he will call himself would do. To "take account of" fits the bill - I do not mean to be funny.
I move amendment No. 48:
In page 11, subsection (5)(d)(ii), line 5, after "the" to insert "production and".
The Minister might include "production" in this case, so section 8(d)(ii) would read "methods of increasing efficiency in the use and production of electricity."
We already discussed this amendment.
It was discussed with amendment No. 38. I thought the Minister indicated she would look again at including "production" as well as "use".
What does the record say?
It has been decided whether the amendment is moved or not.
What does the record of the debate on that amendment say?
We do not have it. Amendment No. 38 was discussed and was withdrawn.
I move amendment No. 49:
In page 11, subsection (5), between lines 6 and 7, to insert the following:
"(e) to require that the system operator give priority to generating stations using renewable energy sources when selecting generating stations.".
We had a long discussion on this amendment, so I will withdraw it. Note was taken of the points made in the amendment.
I do not have the record with me.
I recall it, so I hope the record will show my recall is correct.
I presume whatever the record says is what happened.
I move amendment No. 52:
In page 11, subsection (2)(b), lines 14 and 15, to delete "holders of licences or authorisations, eligible customers" and substitute "individual holders of licences or authorisations, individual eligible customers".
This section allows the Minister to give directions to the commission until 19 February 2000 which, as we know, is the deadline and will stand repealed after that date. This allows the Minister to issue general policy directions to the commission for the sake of consistency as we get on with the next electricity directive. This amendment will reassure prospective entrants into the electricity market as well as the ESB that the Minister of the day cannot issue directions to the commission in relation to individual licences or authorisation holders or individual eligible customers.
Has the Minister thought about who will revoke licences?
It would be the regulator.
The Minister said she will not have the power.
Not when the Bill is passed and when the regulator is established.
Deputy Daly asked about revoking licences. Will the Minister outline the position on amending licences?
I will not amend licences.
What power will the commissioner have?
He will have the power to grant, revoke and amend licences - this is contained in another section.
I move amendment No. 53:
In page 12, subsection (6)(d), line 17, before "gives" to insert "knowingly".
I am worried that somebody would inadvertently give false information. It is a normal defence in court as well. Since the word "knowingly" is normally included in legislation, the Minister might consider inserting the word "knowingly" before "gives to the Commission or to an authorised officer information which is false or misleading, in a material respect".
That came up previously in the Aer Rianta Bill in relation to the director of a board. When the Deputy moved his amendment, I knew that was the Bill. The issue concerned a director of the board knowingly giving false information. I accept the Deputy's amendment.
The difference between the two situations was a directorship.
It was. I said a director should be well aware.
The word "knowingly" is already used in paragraph (c) which states "knowinglyalters, suppresses or destroys". It would be inconsistent not to use the word in subsection (d).
It is slightly different. I take Deputy Stagg's point.
Amendment No. 55 is related to amendment No. 54 and both may be discussed together. Is that agreed? Agreed.
I move amendment No. 54:
In page 12, line 28, to delete "or" and substitute "and".
Section 11, which deals with search warrants, mentions authorised officers or members of the Garda Síochána. I am not clear who authorised officers will be and what authority they will have in carrying out actions with search warrants. Would it not be advisable to have a member of the Garda Síochána in attendance at such times? That is the reason I tabled this amendment. I have asked for somebody not below the rank of sergeant. I am not reassured that the reference to authorised officers carries sufficient authority to carry out search warrants, and I would like the Garda to be involved. What type of person does the Minister see as an authorised officer?
Would the authorised officer be able to gain entry on his own? Does the Minister believe it would be desirable to have a member of the Garda Síochána present? If the authorised officer had the power to gain entry after obtaining a search warrant, it might not be necessary. It might be in the best interests of the firm or company involved if an authorised officer could go in without the Garda Síochána. That might be better.
I understand the attendance of Garda officers is normal in such circumstances. I do not believe they should not be in attendance.
Authorised officers will have specialised knowledge and will be well informed about the parameters of their job. This section states that an authorised officer, who must be accompanied by another authorised officer or a Garda, will be able to exercise the powers granted to him or her under the terms of a search warrant. The Force's resources are impinged upon enough without its members being obliged to await the arrival of a Garda of a certain rank before a search warrant can be acted upon. The commencement of a search could be unduly delayed as a result. If an unauthorised officer can accompany the officer charged with carrying out the terms of the warrant, then the section as it stands is satisfactory.
Amendments Nos. 54 and 55 seek to require the attendance of a member of the Garda Síochána of at least the rank of sergeant when entering premises on foot of a search warrant obtained in the District Court. The provision set out in section 11 is standard and the Parliamentary Draftsman has advised that the words "or members of the Garda Síochána" used in this context would allow an authorised officer to be accompanied either by other authorised officers or the gardaí, by both or by neither.
In general I believe gardaí should be present when search warrants are being implemented but there could be circumstances where it would not be possible for a member of the Force to be present. As Deputy Stagg stated, it might not be possible to have present a Garda of suitable rank during a search. I cannot accept the proposed requirement that the member of the Garda Síochána to be present during a search should not be lower than the rank of sergeant because one might not be available at the appropriate time.
It should be a matter for either the courts or the Garda Síochána to decide what is appropriate on a case by case basis. It is easy to stipulate in a Bill that certain requirements must be met. However, authorised officers may need to obtain information by entering a premises during a major crime-busting operation and a sergeant might not be available to assist them. In addition, the courts might decide in certain instances that only an authorised officer need be in attendance. This is a standard provision and in my opinion we should not alter it.
I deliberately separated the two amendments but they are being discussed together. Given the times in which we live, I am concerned because people can call to houses and present different types of identification. I believe there is a need to amend the section and I offer one or other or both of the amendments for that purpose. If the Minister is confident that an authorised officer will be sufficiently empowered to carry out his or her job, I will withdraw the amendments. However, I believe they should have been discussed separately.
I appreciate that stipulating that a garda not lower than the rank of sergeant should be present during a search might require the deployment of resources which the Government either cannot or will not make available to the Force. However, that is another day's work and it is the responsibility of another Minister. I will withdraw the amendments because my main aim was to outline my concerns. I hope the Minister has taken note of those concerns.
I move amendment No. 56:
In page 12, line 30, after "enter" to insert "such premises as are specified in the warrant".
This amendment was suggested by the Parliamentary Draftsman in order to clarify the power to enter the premises, limiting it to what is written on the warrant, in other words, only the premises stipulated on the warrant may be entered.
Amendments Nos. 57, 58 and 58a are related and may be discussed together by agreement. Is that agreed? Agreed.
I move amendment No. 57:
In page 12, subsection (1), line 33, to delete "A" and substitute "Save as otherwise provided by law, a".
I am concerned that the Freedom of Information Act will apply to this legislation and to the commission. We could be faced with a situation where it would be illegal, under the terms of the Bill, to comply with the Freedom of Information Act. Inclusion of the term "Save as otherwise provided by law" will resolve this problem.
These amendments are motivated by the need to balance the need to protect information of a confidential commercial nature with the law as it stands in respect of the public interest under the Freedom of Information Act. Amendment No. 58 seeks to provide clarity in that regard. I am merely asking the Minister to balance the two provisions. There is a constraining provision which deals with confidential commercial information and it should be balanced by outlining the boundaries within which, namely, the Freedom of Information Act, that confidentiality should operate. Amendment No. 58 requests that reference be made to the requirements of the Freedom of Information Act.
This section involves matters of a confidential nature. It refers to "an adviser or consultant". We are concerned because people who are not connected with the commission might become involved in this area. How would the Minister define "adviser" or "consultant"?
That is a very topical question.
The section sets out a very tight line in respect of confidentiality but I believe it should be tightened even more. Use of the term "an adviser or consultant to" means that a large number of people might have access to confidential information.
Etain Doyle, the regulator of the telecommunications industry, has in the past two years employed up to 12 or 13 different consultants to draft papers for her. There is no way the commissioner could be prevented from employing advisers or consultants because he or she could not do his or her work without seeking expert advice in the form of consultancy or advisory studies. While one might want to tighten the confidentiality requirements, there is no real need to do so because the officer of the commissioner will only employ a small core staff. The technical advice needed in many instances will be furnished in the form of consultancy reports. Obviously, consultants need information and we are attempting to bind them to confidentiality while at the same time not nobbling the strictures of the Freedom of Information Act.
Deputy Stagg's amendment proposes that the section be subject to any other statutory requirement. This would make clear that the provision could not interfere with any other law requiring the disclosure of confidential information. I think this is a satisfactory way of putting it and the phrase used in the amendment, "Save as otherwise provided by law," is proper. Therefore, I am accepting the amendment.
Amendment No. 58 in the name of Deputy Sargent specifies that "no provision of this section shall be construed as in any way compromising the rights conferred on the public under the Freedom of Information Act, 1997, under the Freedom of Access to Information on the Environment Regulations, 1993, or under the Aarhus Convention on Access to Environmental Information, Public Participation in Decision-making and Access to Justice in matters relating to the Environment". That number of different strictures might be unnecessary as section 45 makes the commission subject to the Freedom of Information Act, 1997. The environment regulations of 1993 have been revised and replaced on two occasions - in 1996 and 1998 - and it is likely that new and more up to date regulations will be made this year and next year. The Aarhus Convention on Access to Environmental Information, Public Participation in Decision-
making and Access to Justice in matters relating to the Environment was, I am told, signed in 1998, but has not yet been ratified. This is a matter for another Department.
I move amendment No. 58a:
In page 12, after line 49, to insert the following subsection:
"(4) The Freedom of Information Act, 1997, is hereby amended in the Third Schedule thereto by the addition to Part I at the end thereof——
(a) in column (2), of 'Electricity Regulation Act, 1999.’, and
(b) in column (3), of 'Section 12.’.”.
This has been suggested by the freedom of information unit in the Department of Finance so that requests for information can be fully complied with. As Deputies are aware, the Act sets out a number of exemptions to protect sensitive information. I am asking the committee to accept the recommendation of the Department of Finance.
I do not understand the Minister's amendment. Does it refer to the list at the end of the Bill of all Acts——
That is fine.
We are postponing consideration of section 13.
Section 13 deferred.
I move amendment No. 70:
In page 13, subsection (2), line 39, to delete "section 10” and substitute “section 13”.
This is a technical amendment and is required to rectify an incorrect cross-reference due to a clerical error. A reading of the text will make it clear that the reference in this subsection to "section 10" should read "section 13".
I move amendment No. 71:
In page 14, subsection (4), lines 2 and 3, to delete "continue in full force and effect as if this Act had not been passed" and substitute ", subject to the provisions of this Act, continue in full force and effect".
This is a technical amendment. The wording of section 14(4) as it stands could have been construed to mean that permits issued by the ESB before 1 September 1998 under subsection (2) of this section were not subject to any regulation under the Bill. The amendment clarifies that such permits will continue to apply and will be subject to the provisions of the Act.
I understand the general tenor of the amendment and accept that in some instances it may be necessary to change permits. Does the Minister see a problem in changing conditions which have already been imposed in the context of people who might have entered agreements?
In terms of permits?
Yes. Agreements have been entered into. For example, IVO Energy has made an investment - I have not discussed this with anybody.
The Deputy should just make his point. We are all afraid - this is what comes from over-intense lobbying in other areas.
They have made a big investment and have been granted a permit. Conditions were imposed and I am apprehensive that the regulator or commissioner might change the conditions and adversely affect agreements which have already been entered into.
I understand the point being made by the Deputy. In general I anticipate that changes will not be made to existing permits. At the same time, the regulator has to carry out his or her functions and I cannot tie their hands in advance in terms of a specific case when conditions change.
Agreements have been entered into with IVO Energy in consultation and co-operation with the Minister's Department and her advisers. Much discussion has taken place and the company has made a commitment.
I do not anticipate any changes.
I cannot say if what I am referring to will happen, but I am apprehensive that changes may be made in the future by somebody. IVO Energy has made an investment in excess of £100 million. Suppose another firm from outside Ireland wants to establish a similar company and changes are made to permits being granted——
Is the Deputy referring to new permits or the permit already granted?
I am worried that changes will be made to permits already granted which may adversely affect IVO Energy and result in strenuous conditions being imposed.
The Deputy is correct to put forward his view, but my belief is that general fairness will apply and that the regulator will see that a permit has been granted under conditions set out, agreed and signed and that building proceeded on that basis. I cannot foresee a situation where a regulator would seek to alter materially the conditions of a permit already granted. In any event an appeals system exists, so that if an existing permit holder thought modifications to their permit were being demanded they could appeal.
I think the issue of modification arises in section 18 and I will return to it at that stage.
I move amendment No. 72:
In page 14, between lines 3 and 4, to insert the following subsection:
"(5) The power of modification or revocation of a permit referred to insubsection (3) or (4) shall be exercisable by the Commission and not by the Board, and any powers conferred on the Board by such a permit shall be exercisable by the Commission and not by the Board.”.
This amendment has been suggested by the Attorney General's office to clarify that the commission will exercise regulatory authority on permits issued by the ESB under section 37 of the ESB Act, 1927.
I have observed that parliamentary draftsmen listen to debates on Bills and produce ten more amendments later. They are continuously thinking of ways to improve legislation. I have no doubt that they will send me a letter outlining how silly I am to make such an observation.
It would take a brave person to write that type of letter.
They listen to everything and are continuously trying to find a way to insert more amendments.
They got an earful today.
I have been asked to examine new amendments. The parliamentary draftsman produced an amendment for this Bill and now he has put forward an amendment to his original amendment. I notice that Members are not supporting me on this issue.
We are trying to get through the Bill.
We will defer consideration of section l5.
Section 15 deferred.
I move amendment No. 76:
In page 14, subsection (2), lines 39 and 40, to delete "may include criteria relating to" and substitute "may relate to".
In reviewing the Bill the Attorney General's office has advised that the wording of this subsection should be changed to reflect more accurately the provisions of Article 5 of the directive. The list of matters to which the criteria for authorisation may relate is an exhaustive one. This amendment is necessary to ensure compliance with that list which, in turn, complies with Article 5 of the electricity directive.
I move amendment No. 77:
In page 14, subsection (2), between lines 40 and 41, to insert the following:
"(a) the principles of sustainability and biodiversity,".
I want to include as one of the criteria specified by the Minister the principles of sustainability and biodiversity. The sections relating to the protection of the environment may be seen to overlap but I am referring to the security of supply and other issues of sustainability and biodiversity which would not come under the narrow term of "environment protection". I hope this Bill will take due note of the commitments entered into by the Government at the Rio and Kyoto Summits. The words "sustainability" and "biodiversity" evoke those commitments and we should keep them to the forefront of our minds, particularly in the mind of anyone making an application.
The list of criteria for considering applications for authorisations is set out in Article 5(1) of the electricity directive. It is an exhaustive list. I cannot add to it in legislation implementing the electricity directive. I am trying to stick to the exact meaning of the directive. The thrust of Deputy Sargent's amendment is covered in this section. In subsection (2)(b) it states that the commission must consider "the protection of the environment" and, in subsection (2)(d), "the efficient use of energy". The Deputy is asking for the commissioner to take into account the protection of the environment, not the protection and the efficient use of energy. These are general terms for sustainability and biodiversity.
I recognise that the Minister is quoting from notes that were prepared for her before I made my contribution. Section 17 does not specifically deal with the protection of the environment.
I accepted the Deputy's point that the section was not specific enough.
The section needs to be less specific because security of supply is a growing problem for Ireland. For sustainability we should takenote of that aspect. Sustainability is not just associated with environmental protection. It is as much an economic as an environmental principle and I hope it will be taken into account. The Minister referred to other sections of the Bill and I will not pursue the matter. However, it should be understood that sustainability is not just about environmental protection.
I talk about sustainability in terms of the environment.
That is restrictive.
Sustainability was the thrust of the Kyoto Convention.
That was the tabloid interpretation.
The Deputy views sustainability in terms of the economy and the environment.
A long-term economic view has been taken and we have a responsibility to do the same. That is why I tabled my amendment.
I move amendment No. 78:
In page 15, subsection (2), before line 1, to insert the following:
"(b) the extent to which the authorisation will contribute to competition in electricity and lead to increasingly competitive electricity prices for customers,".
The aim of Deputy Yates's amendment is to insert a reference to competition and prices for the consumer into the list of criteria the Minister can authorise for the consideration of applications. Safety and security, protection of the environment, the siting of a generating station and the efficient use of energy are all contained in her list. However, we feel it is important that reference should be made to the promotion of competition and reduction of prices for the end consumer.
The section is worthwhile because the list of criteria is good. Deputy Coveney referred to the safety and security of the electricity system, electric plant and domestic lines. It is important to include these on the list. The environmental aspect is also important, particularly with regard to emissions into the atmosphere, water or on land. The list of criteria outlined in section 17 is desirable and acceptable. It is important that the price of generating electricity is competitive and gives the customers and consumers value for money. It would be worthwhile to insert amendment No. 78.
This amendment refers to competition not the environment.
The list of criteria is wide ranging.
Deputy Yates's amendment states: "the extent to which the authorisation will contribute to competition in electricity and lead to increasingly competitive electricity prices for customers". Section 8(4) states:
In carrying out the duty imposed . . . . .. the Minister and the Commission shall have regard to the need:
(a) to promote competition in the generation and supply of electricity in accordance with this Act.
Competition is outlined in that subsection. Amendment No. 78 seeks to ensure that the granting of any single authorisation would be subject to checking whether it fit in and whether it impinged upon another authorisation where competition would or would not ensue and the giving of it.
Nobody will look for an authorisation if they do not believe they will get business. Getting into this area involves a considerable amount of money. Clearly there will be competition - that is the purpose of the Bill. The other part of the directive, which we will introduce in the autumn, promotes competition and that is laid out in page 10, that is, "to promote competition in the generation and supply of electricity in accordance with this Act".
Deputy Yates, Deputy Coveney and others want each authorisation to be subject to competitive criteria. That is the duty of the person supplying the electricity. If they do not have competitive prices, they will not get business and they will close. If a person or a firm can get electricity cheaper and a good service, they will go to that suppler. This issue is being brought to a micro level when, in fact, the onus of competition has been already inserted in the Bill and agreed on.
I accept the point the Minister made but I would like to put forward an opposite view. If a local authority put the collection of refuse out to tender, those providing this service would undercut one another. It appears, however, that the prices being charged by those providing this service have increased as has the charge to the citizen whose refuse is being collected. In this instance, I see the point the Minister made about what is in page 10.
The only reason those generating electricity are in the business is to make money and they will be anxious to make a profit. The commission should ensure the customer is provided with a service at a reasonable and competitive price. This should be specified as one of the criteria taken into account by the commission when issuing authorisations.
They are going into a market, not a protected industry. The purpose of this Bill - as well as the implementation in full of the directive - is to allow for competition. That is what this is about and not about giving protection to one providervis-à-vis another. Encouraging competition is laid out in page 10 as one of the overriding criteria in terms of the purposes of the regulator. If competitors are to enter the market - if the lobbying is accurate, there will be competitors - potential prices will fall and people will make choices. If people want to pay high or low prices, they may do so. That is the way markets operate. They do not operate if protected by high walls. Competition will be one of the lodestars of a regulator to subject each particular authorisation or application for authorisation to its competitive outflow or effect, so to speak. It would not be possible for a regulator to do this.
I agree with the Minister that the Bill is about opening up the existing electricity production market to the private sector. Giving a slice of the cake, at present the sole preserve of the ESB, to the private sector is what the Bill is about. The people who will enter that market have no interest in customers. It is nonsense to pretend competition is about interest in customers; it is about interest in making a profit. That is the only reason they will invest in this area, and very high investments will be made.
It might happen that the customer will get a better deal but that is very much by the way. In this case, we are fairly certain, because of the way the ESB has operated to date, that the customer will pay more than they do now when there is competition. Maybe a select few customers will pay less but the majority will pay more when there is competition.
We have figures from the European study of electricity prices which show electricity prices in the Republic are cheaper than 17 of the other European countries studied. The only country which was not studied was Sweden for which they had no figures. Figures showed prices were 14 per cent and 18 per cent cheaper than in Northern Ireland and competition is likely to bring us up to that level rather than down. A competition audit for each authorisation, as suggested in the amendment, could make the situation worse rather than better.
I have no problem with Deputy Enright's amendment. It is worth pointing out, even if it is only by way of a gentle reminder, that the customer matters. Whether note is taken of that, we should at least say it. The Minister referred to my amendment, said the criteria were sacrosanct and could not be adjusted. Why are we entering into another debate? Would it not be better to cut to the chase, say this is the directive and get on with amending what we can?
I reserve the right to be able to say something.
Absolutely, but we should call a spade a spade. If these are the criteria in the directive, and it is not to be amended, then it looks as if we talking for the sake of it.
I do not want to live in a dictatorship in which we cannot open our mouths.
What I had to say was well worth hearing.
I do not know about that.
I think so.
It was very good but we will not ask for an encore.
My understanding is that the Minister is not accepting the amendment because this may be a competitive market anyway and if a company or a firm which enters it does not supply electricity at the right price, people will not buy it from them. That is the next stage. It is our responsibility to give authorisation initially.
It is the responsibility of the regulator.
It is our responsibility to decide on that responsibility. The Minister has laid out all the other criteria and there is no reason this should not be included if for no other reason, as Deputy Sargent pointed out, that it reminds us that it is the customer or consumer who is the important person at the end of the day. We have gone to great lengths to include everything else, so I do not understand why the Minister is objecting to including this as well.
I am doing what Deputy Sargent suggested, that is, being brief. I cannot accept the amendment.
I do not wish to be confrontational but the bottom line is, what is the Bill about and who are we trying to serve? I might be a little naive but I believe the bottom line is that we are here to serve the consumer. This is an effort to ensure that there is a clear directive in the Bill that the authorisation may be determined by the commission with reference to the criterion of "the extent to which the authorisation will contribute to competition in electricity and lead to increasingly competitive electricity prices for customers". The bottom line is the need for competitive electricity prices. The amendment should be accepted.
It is said often that markets, such as the electricity market, should be changed and we pay lip-service to the consumer. If we consider how the consumer fares under the present regime, we would argue for no change because Irish consumers fare better, as far as the price of electricity is concerned, than their European counterparts. Irish industrial and commercial consumers are about 20 per cent better off than their counterparts in Northern Ireland.
One may say that competition is good for the consumer but that is not necessarily true. There is supposed to be competition in Northern Ireland but it does not really exist. It exists in England but do consumers there get a much better price from producers than consumers here? The purpose of introducing competition is to give a slice of the market to other capitalists who want to invest their money in that particular enterprise. That is the object of the exercise. When that is being done on European, national and other levels, lip-service is paid to the consumer. The effect of the practice is that the consumer pays more when there is competition.
The Minister, the committee and I will have no control over prices subsequently. The famous, almost sacred, market which protects consumers will control it and we will see what the consumers get. If they have the same experience as consumers in Northern Ireland, they will get a much worse deal.
I have nothing further to say. I am taking Deputy Sargent's advice and I thank him for it.
I move amendment No. 79:
In page 15, subsection (2), between lines 10 and 11, to insert the following:
"(h) an authorisation holder not seeking to compel the Board to purchase all or any of the electricity generated by it under any circumstances save where the primary source of the energy used in the generation of the electricity comes within the definition of 'renewable or alternative forms of energy' as provided for insection 2(1).”.
The purpose of the amendment is to give the Minister power to ensure that people cannot produce much more electricity than that for which they have customers and compel the ESB to buy it. The Minister would have power to stop the commissioner telling the ESB that it must buy electricity above the amount which is required, that is 28 per cent. If less than half the number of interested parties who say they will build power stations in Ireland when this legislation is enacted do so, they will produce considerably more than 28 per cent of the market. The Minister should have the power to tell the commission not to compel the ESB to purchase that excess electricity.
The Deputy's amendment provides an exception where the primary source of the energy comes within the definition of renewable or alternative forms of energy.
That is correct.
The Deputy considers that these would-be competitors should not produce more than they can sell.
If they do, the ESB should not be compelled to buy the surplus.
The ESB will not be compelled to buy the surplus.
There is nothing in the Bill to stop the ESB being compelled by the commission.
To compel the ESB is not part of the commissioner's brief.
There is nothing to stop him doing so. The Bill does not state that the commission cannot do that.
There is nothing in the Bill which states that he must tell the ESB to purchase surplus electricity.
For example, under section 17(2)(d), the efficient use of energy——
Is the Deputy talking about stranded assets?
No, I am not talking about stranded assets. I am talking about excess production. If a producer has a market for only half of its electricity and it is capable of producing cheaper electricity than the ESB, the ESB could be told to close down one of its inefficient stations and to take the electricity from the other producer. It could happen. The Bill provides for powers to take such action.
If I am totally wrong, I will be glad to hear it.
I am told the Deputy is wrong. The Attorney General's office has told us that the list of matters in section 17 is an exhaustive list. A regulator could not say to the ESB that it must buy electricity because a firm has produced more electricity than is required. Is that not what the Deputy is saying?
I am saying that will be the case under the efficiency clauses and the powers of the Minister.
Nobody will start a station and enter the market unless they are sure they have customers. That is what they are doing already. They are trying to sign up would be customers. However, it is not provided that the regulator should have the power to compel the ESB to take up any surplus electricity should a competitor find that it has produced too much.
What will happen to their surplus?
I do not know.
They will have surpluses.
I do not imagine they will generate surpluses. They must take account of the market and its needs each year. There are figures for what will be used this year and the projections for 2000, 2001 and 2002 based on estimated rates of economic growth. Any entrant to the market must take account of them. It is a foolish person who will go to the expense of generating electricity surplus to requirements.
The Bill outlines many powers of the commission and I am advised that there is nothing in the Bill which prevents the commissioner from telling the ESB to close down its inefficient station.
This reminds me of stranded assets.
The Minister would need to check it. The commissioner could say that the ESB must take much cheaper electricity in the interests of the customer, about whom we spoke earlier.
There is a transitional period in which stranded assets will be catered for. I introduced the issue of stranded assets because the Deputy referred to the stations which might be operating below par. There is a transitional programme in that regard but there is no power in the Bill for a commissioner to compel the ESB to take surplus electricity from another firm and to tell another firm what he was doing. It is not in his power to do so.
I understand the Deputy is genuinely concerned about the matter. If he wishes to leave the amendment until Report Stage, I will then have more definitive information on the matter.
I thank the Minister.
Amendments Nos. 80 and 82 are related and they may be discussed together by agreement.
I move amendment No. 80:
In page 15, subsection (4), line 13, to delete "this section" and substitute "subsection (3)”.
These amendments relate to the publication by the Minister of an order setting out the criteria for authorisation. The Bill, as published, would require that notice of intention to make an order setting out criteria should be published 28 days before the criteria will come into effect. It is considered that this would delay the initial grant of authorisations unnecessarily and so it is proposed to publish subsequent orders which would change the criteria for the grant of authorisation.
I move amendment No. 81:
In page 15, subsection (4), line 14, to delete "newspaper" and substitute "daily newspaper published and".
The Bill, in respect of the publication of applications for authorisation, refers to "a newspaper circulating in the State at least one month before the making of the order". In the interests of freedom of information, etc. amendment No. 81 seeks to include the term "daily newspaper" because newspapers have various publication dates. Advertising an application for authorisation in a free advertising newspaper which is published weekly, bi-weekly or monthly is not the same as advertising it in a daily national newspaper. In the interests of consistency, such information should be made available to consumers in a proper manner.
The amendment stipulates that advertisements should be placed in daily newspapers published and circulating in the State because there are a number of newspapers which are not published in this country but which do circulate here.
I accept the amendment. However, I must point out to the Deputy that he went on forever about the amendment having informing me that I could not do so in respect of an earlier amendment.
How often does the Minister accept an amendment? I had to make my argument in as strong and trenchant terms as possible in order to convince her to accept the amendment. I am delighted the Minister has accepted the amendment.
I am glad the Deputy is delighted.
I move amendment No. 82:
In page 15, subsection (5), line 16, after "order" to insert "proposed to be made undersubsection (3)”.
I move amendment No. 82a:
In page 15, between lines 19 and 20, to insert the following subsection:
"(6) An order under this section shall not provide for the use of nuclear fission for the generation of electricity.".
On 12 May, I agreed to Deputy Sargent's request that an amendment would be prepared to insert a provision into section 17 that nuclear fission would be specifically excluded as an energy source. That is the purpose of the amendment.
Go raibh maith agat.
I am delighted that the Minister has accepted the amendment. However, I am puzzled about a particular matter and perhaps she can assist. There will be interconnection with Northern Ireland Electricity which, in turn, will be interconnected with Scottish companies producing electricity by means of nuclear fission. Is the Minister in a position to indicate how we can avoid the importation of electricity produced in this way into our system?
No. However, I will communicate with the Deputy about that matter in writing at a later date.
I suggest that the Bill should stipulate that it would be illegal to purchase electricity from a nuclear producer, either in Britain or further afield. This would ensure that people would not be paying for electricity produced by means of nuclear fission.
That is a weighty subject to which I will be obliged to give a great deal of consideration.
It is a subject which is addressed by the amendment. It is important to deal with this matter because otherwise we will be engaged in window-dressing. For example, Roadstone might decide to purchase its electricity from a nuclear power station operated by Scottish Power and import it through the interconnector which would be legal. In my opinion the Minister could table an amendment to make it illegal to purchase electricity produced by means of nuclear fission. I am sure the EU would object if she took such action but we could deal with such opposition as it arose and publicise the non-nuclear nature of the Republic's electrical power system.
I will return to this matter on Report Stage.
With Deputy Stagg, I believe there might be a number of implications from this amendment. For example, a number of Irish contractors benefit from work they carry out at Sellafield and other nuclear installations. Grey areas already exist in Ireland in respect of the nuclear industry. If the Minister could clarify the implications involved and our ability to stand over this new provision, it would help us to see whether it is window-dressing or whether it means something.
Let us be clear, the Deputy was responsible for proposing the window-dressing.
I was not proposing window-dressing; I proposed that we copperfasten our national policy in this area.
I will communicate further with the Deputies on this matter.
For the information of Members, our meeting tomorrow will commence at 4 p.m. and it will continue until 8.30 p.m. Is that agreed? Agreed.
That should knock the bottom out of it.
Is it agreed to suspend proceedings until 5 p.m. and continue our deliberations until 8.30 p.m. tonight?
I suggest that we adjourn at 7 p.m.
Is that agreed? Agreed.
Amendments Nos. 83 to 85, inclusive, are related. Amendment No. 87 is cognate with amendment No. 84 and amendment No. 88 is cognate with amendment No. 85. Amendments Nos. 83 to 85, inclusive, and 87 and 88 to be taken together by agreement.
I move amendment No. 83:
In page 15, subsection (2), line 23, to delete "is of the" and substitute "reaches a reasoned".
I will discuss amendments Nos. 83 to 85, inclusive, together but then they can be dealt with separately.
Amendment No. 83 deals with the modification of a licence or authorisation. In the Bill it states "Where the Commission is of the opinion that a licence or authorisation should be amended. . . . ". My amendment seeks to reassure the applicant that it is more than just an opinion and that the commission reaches a reasoned opinion that can be laid out.
With regard to amendment No. 84, as the Bill stands, the authorisation or licence can be amended without the consent of the holder of the licence. Is that being a bit harsh? Should the licence holder be consulted in regard to the amendment of a licence?
Amendment No. 85 is the most constructive of these three amendments because it states: ". . . . .to insert "or having created, through independent arbitration involving the holder, an agreed basis for amending the licence or authorisation". This amendment would ensure that fair play would be seen to be done in the usual open, transparent and accountable way that we talk about. It would also ensure that all sides would understand that there is an independent procedure that must be followed. I offer these amendments for the Minister's consideration.
In amendment No. 83 the Deputy asked that the commission's opinion would be a reasoned one. The commission is subject to a judicial review process at any time. It is the right of any citizen and it is referred to under the section of this Bill relating to appeals. Natural justice requires that all opinions would be reasoned and, therefore, it is not necessary to say it would be reasoned.
Amendment No. 84 would mean that when the commission considered it appropriate to amend a licence or authorisation it could only do so if it has the consent of the licence or authorisation holder. In section 19 procedures to be followed where a holder objects to a modification are outlined. First, the commission tends to give prior notification of a modification. Second, public hearings take place where the commission considers it is warranted. Third, section 28 outlines an appeals system that can be employed to oppose any modifications. Earlier someone asked me to abolish the appeals system. I refused because I believe every system needs an appeals mechanism. It makes sense to be able to appeal if you cannot pay your water rates. An appeals system is even more important in this case.
Modifications to licences or authorisations resulting from public service applications or transitionary entrance orders are not subject to appeal as they would result from Government policy. There might be occasions where the commission considers it appropriate to amend licences or authorisations. There are many options available. There are the appeals system, hearings, prior notification and any citizen has the right to opt for a judicial review. Section 28 provides for an appeals mechanism.
Amendment No. 85 states: ". . . after 'authorisation' to insert 'or having created, through independent arbitration involving the holder, an agreed basis for amending the licence or authorisation"'. This amendment proposes the setting up of an independent arbitration board or service. We already have an appeals system so who will be on an arbitration board? The appeals system is the best option. For example, if a person wants to lodge an appeal for planning they can go to An Bord Pleanála. It is natural to appeal a decision and every citizen has the right to a judicial review. The appeals system is the best option. Appellants must also give notice or publicise their wish to appeal. These are necessary safeguards. Under the Freedom of Information Act all relevant documents can be obtained; therefore, any person making an appeal would be fully informed.
Amendments Nos. 87 and 88 repeat what is sought in amendments Nos. 83 to 85, inclusive. Therefore, the arguments that have been made stand.
As usual the Minister is very convincing in her arguments. She has given some comfort to anyone concerned with this issue by citing the appeals structure that is in place. Does she view the commission as consultative or open to consultation?
Yes. I do not view the regulator as someone who will lock himself in a room and become a recluse. I would view his office as being open. I note that Etain Doyle operates her office in a remarkably discursive and open manner.
On that basis I withdraw my amendments.
Most of the discussion on these amendments is more relevant to the next section. Section 19 does not refer an appeals system.
There is an appeals system.
I have not found it in section 19. There is room for modifications. A person can object to the person who is making the modification but that is not an appeal.
There is an appeals system.
On page 20.
It is not referred to under section 19.
It comes under the heading "Establishment of Appeal Panel".
Does it deal with modifications as well?
It refers to a person whose application for a licence is refused and a person who is the holder of a licence or an authorisation who is already the holder and who wishes to appeal against a decision. If one is a holder, one would be appealing against an amendment to that.
It might not be - it might be a new application.
It also refers to modifying the licence. The reason I was so sure about that is that it was put to me to do away with the appeals system.
I move amendment No. 86:
In page 15, subsection (3), to delete lines 30 to 32, and substitute "undersection 38 or 39”.
This amendment will allow the commission to modify conditions or requirements in both licences or authorisations without consent if necessitated by an order made by the Minister regarding either public service obligations or the transitional arrangements. The subsection of the Bill, as published, would not allow such modifications to authorisations if necessitated by a public service obligation order. The Minister's prerogative to require a modification to a licence or an authorisation stemming from Government policy on the public service needs to be applicable to both licences and authorisations. That is what is wanted as regards the transitional arrangements or the PSO - the public service obligation. It is fair that the Minister would want to see the carrying out of arrangements under public service obligations or under the transitional arrangements.
When dealing with section 14(4), I expressed my concern about a permit granted before 1 September 1998. Section 18(2) states:
Where the Commission is of the opinion that a licence or an authorisation should be amended it may do so with or without the consent of the holder of the licence or the authorisation, as the case may be.
The Minister is probably convinced that is all right, and I do not doubt that in most instances it will be. However, I have concerns where agreements have been entered into as regards the granting of permits, licences or authorisations, that these can now be amended or altered by the commission. It strikes me as being ——
Arbitrary. While appeals may be made, I am concerned. As the Minister is aware, a number of international firms have come here and have entered into agreements which they felt were binding. They have also expressed interest in expanding further in this country. To be able to amend solemn agreements and contracts entered into is something which greatly worries me for business reasons and in terms of the future of firms investing in Ireland. I do not know the terms and conditions of the IVO agreement or what other firms would be involved. Perhaps the Minister would consider whether she is fully satisfied with it.
I will undertake to do that. With your permission, Chairman, we might refer to it tomorrow at the start of business.
I am happy with that.
I move amendment No. 89:
In page 16, subsection (5), line 13, after "Minister", to insert the following:
"who shall arrange, without undue delay, to provide a copy of the notice to the Oireachtas library".
In case the Minister accepts the amendment, I will not say too much about it.
Am I supposed to do something?
The last time the Minister accepted the amendment and I was sorry I said so much. Will she indicate ——
I will accept the amendment.
Great. I will stop talking.
I move amendments No. 90:
In page 16, subsection (7)(a), line 22, after "representations" to insert", in whole or in part,".
As originally drafted, this subsection provides that the commission could either accept or reject an objection or representation. This amendment allows the commission the flexibility to take account of part of an objection or representation rather than the full one if necessary and inserts after the word "representations" ", in whole or in part,". It is fair that the commissioner would not necessarily have to consider the whole objection or representation as part of it may strike it as needing review. The commissioner will have the flexibility to take account of that in whole or in part. It is really a technical amendment.
Amendment No. 91 is consequential on amendment No. 93. Amendments No. 91 to 93, inclusive, may be taken together. Is that agreed? Agreed.
I move amendment No. 91:
In page 17, subsection (1), to delete lines 25 to 27 and substitute the following:
"(a) to modify a licence or an authorisation in accordance with the proposed modification set out in the notice issued undersection 19(2)(b) or otherwise, or
(b) not to make the modification concerned.".
These amendments relate to section 21 which enables the commission to make a determination on a modification which has been the subject of a public hearing. Amendment No. 91 proposes to clarify the wording of subsection (1) to make clear that following a public hearing, the commission may determine to make the modification as originally proposed or otherwise or not to make the modification concerned. This will happen after a public hearing when the appeal will be made.
Amendment No. 92 would make the provision of the existing subsection (3) subject to a new subsection (4) to be inserted by amendment No. 93. The new subsection (4) would replace a stay on the implementation of a modification for 28 days to allow time for an appeal to an appeal panel under section 28. If no appeal is made, the modification would come into effect. If an appeal is made, the modification could ultimately be implemented under section 29(7) but provided that the modification was confirmed by the appeal panel. It strengthens the appeals mechanism.
I move amendment No. 92:
In page 17, subsection (3), line 32, to delete "The" and substitute "Subject to subsection (4), the”.
I move amendment No. 93:
In page 17, between lines 37 and 38, to insert the following subsection:
"(4) A modification of a licence or authorisation shall take effect on the day which is 28 days after the day on which -
(a) service of notice of modification on the holder of the licence or authorisation concerned is effected or,
(b) notice of the modification of the licence or authorisation concerned is published in a newspaper circulating in the State,
whichever is the later, unless an appeal is made undersection 28(2) in which case the modification shall not come into effect, unless confirmed under section 29(7).”.
I move amendment No. 94:
In page 17, subsection (2), line 43, after "concerned" to insert "or the Board in respect of the transmission and distribution system".
This section concerns directions by the commission to protect public health, etc. The amendment simply allows the powers of direction by the commission to apply to the remaining areas of transmission and distribution which will give the commission greater control in dealing with some consumer related issues such as supply, connection, price, capital distribution and so on. In other words, it slightly widens the powers of the commission. As it is, it may only stop the licence holder from practising whereas we would like to see this widened to the board which is also responsible for the transmission and distribution system.
I accept the amendment, which is sensible.
I move amendment No. 95:
In page 19, subsection (1), line 24, to delete "section 22(4)” and substitute “section 23(4)”.
This is a technical amendment.
It is an incorrect cross-reference. Reading the text will make it clear that the reference in this subsection to section 22(4) should be replaced with a reference to section 23(4).
Amendment No. 96 is in the name of the Minister. Amendment No. 97 is related, and amendments Nos. 96 and 97 may be discussed together by agreement.
I move amendment No. 96:
In page 19, subsection (1), lines 34 and 35, to delete "or determination made undersection 23 or 24” and substitute “under section 23”.
These amendments relate to section 25 which enables the commission to apply to the High Court for an order requiring compliance with an enforcement direction. Section 25 refers to section 24 which enables the commission to make a determination that a breach of a licence took place. This is intended to be used where there was a temporary breach which was remedied by the licence holder and where no direction from the commission is required to ensure compliance. It is effectively a "naming and shaming" facility to enable the commission to bring the breach to public notice. The reference in section 25 is an error as no useful purpose could be served by obtaining a High Court order in relation to a determination made under section 24. The error would be corrected if both amendments were accepted.
I move amendment No. 97:
In page 19, subsection (2), line 42, to delete "or determination made".
I move amendment No. 98:
In page 20, between lines 11 and 12, to insert the following subsection:
"(3) Where appropriate a supplier who supplies electricity to one or more eligible customers as defined insubsection (2) shall be regarded as an eligible customer for the purposes of purchasing generation output.”.
The section deals with eligible customers and the provision in the amendment ensures that supply companies can function freely in purchasing energy from generators and selling to eligible customers. Although this should be a feature of the trading system that emerges, it is necessary to guarantee it in legislation as without it competition may not be meaningful.
This amendment eliminates the need for licensed generators to obtain a separate supply licence to supply electricity to a licensed supplier. In response to Deputy Yates we did not take amendment No. 68 in my name. That amendment reads:
In page 13, between lines 30 and 31, to insert the following subsections:
"(7) The holder of a licence granted underparagraph (a) of subsection (1) may supply electricity to the holder of a licence granted under paragraph (b) or (c) of that subsection or to the Board.
(8) A licence granted underparagraph (b) or (c) of subsection (1) shall not authorise the supply of electricity to an eligible or final customer until after the 19th day of February, 2000.”.
Therefore, the thrust of the amendment is covered by amendment No. 68. Deputy Yates told us he had submitted many amendments based on submissions made to him and that he would wait to make decision on them until the debate on Committee Stage. What Deputy Coveney has put forward is perfectly proper, but it is covered in amendment No. 68 which will be discussed next week.
Amendment No. 99 is in the name of Deputy Stagg. Amendment No. 100 is related to amendment No. 99 and they may be discussed together by agreement.
I move amendment No. 99:
In page 20, subsection (3), line 12, after "may" to insert ", on or after the 19th day of February, 2003,".
This amendment would ensure that the four gigawatt-hours limit is not varied in such a way that it will result in the market opening more than that which is intended or laid down by the directive. Will the Minister accept the amendment?
I know what the Deputy is proposing. The minimum opening of the market is 28 per cent with a minimum of 33 per cent three years later.
I thought it was 32 per cent.
It does not matter. The figure refers to the position three years after the opening of the market. It gives power to the Minister to open the market further from 28 per cent by lowering the consumption rate. The amendments proposed would have the effect of preventing the Minister from exercising the power to open the market further than 28 per cent under section 26(3) by lowering the consumption rate and, thereby, making a greater number of customers eligible. I am troubled by this as I feel we should adhere to the minimum proposals in the directive, which were put forward by the previous Government and which I have followed. The minimum openings required by the directive are 28 per cent and 32 per cent. The Minister should have the prerogative to open the market further in the future without the need for further legislation.
The reason 28 per cent is set out as a minimum is because we argued for it——
I am aware of that.
——to protect the ESB in the interim period——
In the transitional period.
——and to open the market in a phased way. We set down the parameters and won the argument fairly well. Many people and different Governments were involved in this issue at various stages. It would cut across what we did then to say that the Minister can decide, for example, that customers who use one gigawatt are eligible. This would immediately open a huge tranche of the market. If the safeguard in my amendment is not included, whatever Minister is in power will be under immense pressure to make a decision on the hoof without referring it to the Dáil.
A derogation was obtained in terms of telecommunications by the Government in 1996. It is not that the Government acted wrongly in 1996. However, the circumstances which suited in 1996 do not exist in 1998 because it was necessary to open the market rapidly. I accept the electricity market is different from the telecommunications market and that the transitional period is important to those who supply and who wish to enter the market. There is a certainty in the electricity market. Those wishing to enter it know the market, know what they can allow for and can plan accordingly.
I gave considerable thought to amendments Nos. 99 and 100. I wonder if there is a way the matter can be dealt with which would tie the Minister to introducing legislation or a statutory instrument. Otherwise it could be unfettered.
Given the Minister's strong personality and all that goes with it, I am sure she will resist any pressures placed on her which she would not think desirable. However, other Ministers may not be so strong. Indeed, other Ministers may not agree with the legislation and use the chink in the armour to fully open the market, which would do great damage to the ESB. The ESB is owned by the State and we have a responsibility to protect it in the way the Bill is structured.
The directive sets out the route to be taken. Many European countries went beyond the directive and were much more liberal with immediate effect while others, such as ourselves, took the minimum provisions of the directive and are implementing them in legislation. We received a derogation of one year and have until 2000 to implement the directive. I have not yet fully resolved how this matter should be dealt with. I am troubled by it. I want to see competition and to ensure people have a chance to move in on monopolies. I also want to do what is right for the ESB.
I am trying to see whether there is an amendment which I could introduce which would ensure that it would involve more than just laying an order before the Oireachtas because, while that sounds good, is meaningless enough - the order would be laid in the Library and there would be debate on the matter.
In the case of the Telecom Éireann IPO, I found it useful that Deputy O'Shea tabled an amendment which required me to return to the Dáil, which I did, and it led to another debate. That was fair enough and I accepted his amendment.
I suggest we do the same with section 26, if everybody who has tabled amendments is agreeable, as we have done to the other sections which we have skipped.
Yes, but we cannot keep piling them up. I have not made up my mind on this one.
I support the Deputy's view. The Bill provides that 28 per cent of the market will be open by February next and 32 per cent by 2003. If the Minister has the power to vary it by order, I am certain considerable pressure will be imposed on the Minister of the day and it will be raised at the EU Council of Ministers.
I endorse the earlier tribute to the ESB. Its service to the country has been excellent. It is facing open competition. I am in favour of Deputy Stagg's amendment.
One does not know how circumstances or market demands will change. That is what happened in the Telecom Éireann case and what was right for 1996 was not right for 1998. I would favour a power for the Minister to vary it but only after a resolution of Dáil Éireann.
In that case would it not be simpler for the Minister to introduce an amendment to the Bill?
I will consider that.
Unless it is amended this section could cause difficulties
I am convinced that, as soon as the market opens and the four gigawatt-hours customers get access to it, the pressure from the group below that level will start growing. That will be accommodated to a degree by the increase to up to 32 per cent in 2003 but the pressure will continue to grow. If the Minister has the power to simply sign an order and lay it in the Library, no doubt he or she will be forced by public pressure from these powerful people at the top end of the consumer market. If the Minister is not protected by the legislation, he or she will be vulnerable to that. The collective opinion of the committee is that the ESB needs the space which is set out in the Bill to deal with the competition.
The Deputy spoke of the Minister being protected. In the future the Minister of the day may wish to move from the protectionist ambience of the time. What the Deputy is putting to me, if I understand him correctly, is that if his amendment were agreed and the Minister wished to do that, he or she would have to introduce amending legislation in the Dáil.
That is correct.
It is actually an inversion of what I am saying, which is that if the Minister, having not accepted this amendment, wanted to change the provision, he or she would have to introduce it by way of a resolution of the Dáil. It would have to be approved so it is the same thing.
It is along the same lines. I appreciate that the principle of what I seek is being accepted by the Minister. I also accept the Minister's point that things may change.
The market, demands and circumstances may change and there may be a need to move quicker than anticipated because a 1996 directive may be irrelevant in 2003 and, therefore, there would be a need for change. I accept that such change should be ratified by the Dáil. That is what I am putting forward.
The difference, as Deputy Stagg pointed out, is that his proposal would involve amending legislation whereas the Minister is opting for the use of a resolution. The resolution will only involve a debate whereas——
No, not necessarily. A resolution involves a debate on a notable issue.
That is correct. The point is that people will be restricted in that they may be either for or against it. If there were legislation, as advocated by Deputy Stagg, one would have the opportunity to amend it.
If we do not accept these amendments but include an amendment to the effect that if the overall timescale requirements of the Bill were to be changed it could only be done by resolution of Dáil Éireann, it would amount to the same thing.
It would go a long way towards it.
It would go a long way towards it. The difference is that if there was amending legislation, one could deal with the nitty-gritty, as we are doing now, whereas one must vote for or against a resolution. At least the Dáil would have a voice in the matter.
The best way of dealing with it would be to provide that any changes to the timing or scope of the Bill would require a resolution of Dáil Éireann.
I will withdraw my amendments and perhaps the Minister will come back with an amendment on Report Stage.
Amendment No. 101 was discussed with amendment No. 68.
No. It was deferred with amendment No. 68. I referred Deputy Coveney to Deputy Yates's amendment No. 68, which we were not to take until he returned.
I suggest we postpone consideration of amendment No. 101 and deal with it together with amendment No. 68.
Amendment No. 101 deferred.
I move amendment No. 102:
In page 20, subsection (5), line 17, after "subsection (3)” to insert “or (5)”.
This subsection was intended to provide that the Minister shall give notice of any order made under this section. However, the original text omitted to mention orders which the Minister may make under subsection (6) of this section. It is technical amendment for clarification.
We will leave the discussion of the section 26 for the moment.
We will return to it the next day because an outstanding amendment must be dealt with. Will the Minister be prepared to discuss the subject matter of amendments Nos. 99 and 100?
Does the Deputy mean when we come back to Deputy Yates's amendments?
We will be discussing the section.
We will do it that way and tidy it all up.
That will be for Tuesday next.
That would remove the need for Report Stage?
There is a procedural matter here. Amendment No. 98 has been decided. Strictly speaking, under Standing Orders we can postpone a section but not an amendment once we have begun to deal with and agreed it, as we have done. In the circumstances if the section is postponed it will accommodate the totality of what we want to deal with on the next day. Is that agreed? Agreed.
Sections 26 and 27 deferred.
I move amendment No. 113:
In page 21, subsection (1)(b)(i), lines 2 and 3, to delete "other than a modification of a class required by an order made undersection 38 or 39,”.
The section seems to be the same as the amendment.
I presume there is an error.
Amendment No. 114 in the name of Deputy Yates. Amendment No. 116 is related. It is proposed to take amendments Nos. 114 and 116 together by agreement.
I move amendment No. 114:
In page 21, subsection (3), line 16, to delete "by order as soon as practicable" and substitute "within one month".
This section deals with appeals. Amendments Nos. 114 and 116 seek to put a timetable and limit on deliberations and decisions by the appeal panel, to which section 28 refers. The section is very grey in that it contains words such as "by order as soon as practicable". We are seeking to tighten it up and to substitute "within one month". Amendment No. 116 seeks to have all appeals determined within six months.
Is the Deputy asking that appeals be determined within six months?
While amendment No. 114 seeks to substitute "within one month", the appeal panel may not be up and running but definitely there should be a time limit. An Bord Pleanála had smartened up for some time but its decisions are again delayed. Amendment No. 116 seeks to have a determination made within a six months deadline but in a complex case it may take longer to hear the parties to an appeal and to consider other issues, etc. I think six months is a reasonable deadline. We are all trying to determine matters in a more decisive way while giving rights to people. The one month deadline may be difficult in that it may not be possible to get the professional capacity together in that time. Certainly a six month deadline could be imposed. While I do no know if the wording in the amendments is correct, I have been told to accept neither amendment. Amendment No. 116 states: "All appeals underPart IV of this Act shall be determined within six months”. That is fair enough. Amendment No. 114 which seeks to substitute “within one month” would be difficult to comply with because of the complexity of getting the professional capacity together; only some people may be available. The determination issue within six months is sensible. I am accepting amendment No. 116.
Will the Minister consider a time limit for amendment 114 for the next Stage?
No. The Deputy has the right to table the amendment again but I think it is unrealistic.
Even if we agree to increase the time ——
The determination to have it done within six months will give the spur to get it started.
I move amendment No. 115:
In page 21, subsection (5), line 23, to delete "its functions" and substitute "the functions of the Appeal Panel".
The reference to "its functions" is intended as a reference to the appeal panel functions and not to the commission's function. The intention is to make it clear that it is the function of the appeal panel and not the commission.
I move amendment No. 116:
In page 21, between lines 28 and 29, to insert the following subsection:
"(8) All appeals underPart IV of this Act shall be determined within six months.”.
While I have formally withdrawn amendment No. 113 I realise now what it is about. The reason I sought the deletion of "other than a modification of a class required by an order made undersection 38 or 39” is that that is clearly a restriction on the appeal panel. All appeals under public service obligations and under transitional arrangements are prohibited from this section. I cannot understand why that is so. Why are appeals restricted in such a way that these two areas are not covered?
The purpose of the appeal panel mechanism is to allow appeals against decisions of the commission to refuse an authorisation or to appeal a modification for the purpose of regulating the industry. This amendment could frustrate the implementation of public service obligations and a transitional regime. Is not the Deputy saying they could be appealed as well and that the appeals mechanism should apply also in the case of ministerial orders or whatever with regard to a transitional regime and public service obligations? Public service obligations would be good for the generality.
I have no difficulty with that. Deputy Enright said that if an existing licence is modified for the transitional period or the public service obligations, the right of appeal will not exist. We will now have a situation where a person who is the holder of a licence or an authorisation who wishes to appeal against the decision of the commission to modify the licence or authorisation concerned may do so other than a modification of a class required by an order made under section 38 or 39.
Which would be the public service obligation or the transitional arrangement.
That is right. However, if I am a licence holder and I am modified without my consent I have no right of appeal if it comes under section 38 or 39.
Sections 38 and 39 refer to the transitional regime which is meant to be the fluidity of allowing for the opening of competition, but in a measured way. Any appeal under that process is likely to be detrimental to PSO and to the transitional régime.
I seldom speak on behalf of the licence holders - they can speak for themselves and other spokespersons speak for them also - but in this case licence holders could have their licences modified because the Minister says they should be modified in the transitional period in the interest of public service obligation. Even if licence holders are damaged by that decision, they have no right of appeal.
Does the Deputy see my point? Modifications which affected PSOs or transitional arrangements would be for the public good. They would not be——
I presume all the other decisions the commissioner would make would be for the public good also; he would be able to demonstrate that was the case during the appeal. In this case, if I am injured as a licence holder, I have no right of appeal. That is why I want to make the deletion. It is going very far to say a licence can be modified but the licence holder cannot appeal against that decision.
We have built in the transitional regime and the PSOs, which are an easement into competition, to allow for many matters, mostly within the monopoly, and for the division of costings among people who have got authorisations and, in turn, the customers. The reason for the transitional arrangement and the PSO process is to ensure people in peripheral regions have a guaranteed supply and that the cost of such supply is borne equally by all the licence holders and, ultimately, by the customers. Why would one appeal against that?
I am not appealing against it, but if I were the person whose licence was modified, and that modification was to my disadvantage and I was injured financially, I have no comeback. I do not even have the right to appeal the decision. It seems an extraordinarily Draconian measure to introduce. Every other change or decision being made has some avenue of appeal.
We have already dealt with that amendment but it is——
I am talking about the section.
I know but we have dealt with the amendment.
I am talking about the section as it stands now.
The section as it stands is to ensure an easement into competition. The judicial system is open to everyone but the appeals mechanism is well set out. Why should one appeal against a modification which may ensure people participate in a transitional arrangement or PSO?
There would be a good reason to appeal if one were injured by the decision and, in any event, there is a good reason for having the right of appeal.
That would frustrate PSOs and transitional arrangements.
That might or might not be the case, but people are entitled to protect their rights whether it is Bord na Móna, the ESB or——
That will not be the case with Bord na Móna or the ESB because the ESB wants transitional arrangements and PSOs which are applicable to all entrants and, therefor, applicable to its customers. Why would there be an appeal when what one is endeavouring to do is for the public good?
The "public good" is a very vague term.
Deputy Stagg asked earlier about transitional arrangements and about the correct laying out of 2000 and so on. That takes in the transitional arrangements and the PSO which will become evident in that arrangement. If people wish to appeal, it clearly would be for purposes other than the correct mechanism of transitional arrangements and PSO. It would be that they do not want PSO or transitional arrangements. Why should we allow an appeal against what is a stated good?
I see the Minister's point.
In setting up the panel by ministerial order, will matters such as the cost of appeal to the High Court against the refusal to issue an authorisation be taken into account? Deputy Stagg said that somebody might be severely out of pocket as a result of this decision. I presume that in setting down the order to establish this mechanism there will be some provision for costs.
The cost of hearing the appeal?
The cost of the litigation with which the appeals board will deal. For instance, if I apply for a licence to generate electricity in the Shannon Estuary near Moneypoint, and my licence is turned down, I can go before the appeals panel. That would involve a great deal of technical and expensive representation.
There is no doubt about that. I have paid lawyers.
Would I be entitled to claim my costs? It should be written into the ministerial order that I am entitled, or not entitled, to claim my costs for such action. I would prefer if a schedule dealing with that aspect were attached to the Bill. My main criticism with the section is that if there is a long delay in producing the ministerial order - we all know how long it takes to get ministerial orders on the Statute Book - it might be detrimental to the prospect of a project going ahead. That could result in long delays between the determination by the commission and the final appeal mechanism being put in place. Rather than have this done by way of ministerial order, it would be better to have a schedule setting out the exact procedure. In such a schedule matters such as the cost of representation could be taken into account. I am not making an issue of this; I am merely making a comment.
It is a fair comment. I do not want to offer an appeal system to somebody who will try to frustrate a transitional arrangement or a PSO. That person could get a judicial review, but why should the appeal system be set up when we want to implement a transitional regime and a public service obligation which should be implicit on all suppliers?
I am not a lawyer, but I understand a judicial review is only about the mechanism of making the decision, not the essence of the decision. It is about whether the decision was made correctly. I am sure decisions will be made correctly and, therefore, the opportunity for judicial review will be limited. It would be highly undesirable to transfer the appeal system from the system the Minister has set up, which is fine, to the courts because of the danger that the courts would become the appeal tribunal. There is also a danger in going through the appeal system, but these people have megabucks available to them and they can pay the lawyers and solicitors. There is a danger that if they do not win in the appeal system, they will still go to court.
I do not understand why in one part of it the Minister has taken out other than to modify the licence of an authorisation concerned. If the holder of a licence has a right of appeal, he or she should have a right of appeal if that licence is modified.
This relates to PSOs, which are public service obligations. I do not want anyone to be able to make an easy appeal to get out of upholding his or her public service obligations nor do I want anyone to be able to make an easy appeal to get out of the transitional arrangement. That would go against the spirit of the Bill.
I have no difficulty with that. I cannot envisage where that could arise.
It could arise. A person could challenge a PSO and the transitional arrangement provided for in the Bill because we want to comply with our obligations.
They could do that in any event.
Yes, but I do not want to make it easy.
They can do that anyway.
I do not want the Deputy to take this as a criticism, but that goes against the spirit of all the earlier points he put forward.
The fact that there is one situation where decisions would be made where no appeal would be allowed sticks out like a sore thumb.
That situation relates to a public service obligation allowing for power to be given to people in remote areas or allowing for a transitional arrangement.
I am dealing with this Bill in chunks rather than combing through it.
So am I.
I am trying to deal with it altogether. If the Minister is saying that a separate appeal system applies in respect of orders made under sections 38 and 39 and that we do not, therefore, need a dual system, I would say that is fine. I am not sure if it is constitutional to make decisions - as a result of which people may be injured, although I do not know if they will be - in respect of which there is no appeal system.
This discussion is irrelevant. It comes down to whether PSOs are interpreted objectively or subjectively. There would be argument over, for instance, a short-term arrangement related to price which could be considered in the public interest or another arrangement related to energy tax. I am not sure if the Minister is saying it will be a Government policy version or the commission's version of a PSO. As political parties, we would probably vary in our interpretation of PSOs.
Their meaning is laid down.
They are set out in the Bill and include security of supplies, price of supplies, environmental protection, use of indigenous energy sources and so forth, but if one were to choose one and not the others, that could give rise to conflict.
They come under statutory instruments laid down by the Minister.
PSOs would, therefore, be Government policy.
They could be challenged at election time but not by way of any appeal system under the Bill?
They could be challenged. I cannot understand the point the Deputy is making.
The Minister refers to PSOs as if they are——
——the Holy Grail.
I do not know if PSOs should be treated as if they were the Ten Commandments.
It is beaten into my brain that there should be PSOs.
We would all adhere to the principle of a PSO?
Deputy Stagg referred to the detail of PSOs which might be appealed. This matter needs more attention. This is not a black and white issue. The Minister cannot say a requirement is a PSO and there is, therefore, no need for more comment because there are various interpretations of what is a PSO. The Minister knows that. We will not resolve this matter here.
No, we will not.
It is something to which we must return.
It is extraordinary that there is just one class of decision that can be made that will not be subject to appeal.
Is section 28, as amended, agreed?
Members are divided on this section.
Could this section be agreed subject to it be discussed further in a consultative way?
Yes, it could.
As a compromise, I propose that the section be agreed, subject to it being discussed further in a consultative way.
We will have to deal with the section one way or the other.
I withdraw my objection to the section, as amended, on foot of what the Minister said.
Is the section, as amended, agreed to?
It is, subject to the consultative process proposed by the Minister.
It has been agreed to postpone consideration of section 32 as amendment No. 118 will be discussed with amendment No. 69 in section 13, which has been deferred.
Section 32 deferred.
Amendment No. 119 is related to amendment No. 122 and they can be taken together by agreement.
I move amendment No. 119:
In page 24, subsection (1), lines 18 and 19, to delete " a holder of a licence or an authorisation or an eligible customer" and substitute "any person".
Both amendments refer to section 33 which obliges the ESB to offer to enter into agreement for connection to and use of the transmission or distribution system and which enables the commission to give the ESB directions regarding the terms and conditions.
The Bill provides that the ESB is obliged to enter into such agreements with "a holder of a licence or an authorisation or an eligible customer". The amendment proposes to delete those words and substitute "any person", as prospective entrants to the market should be able to obtain such information before obtaining authorisation or licences. They should be armed with the information before they make the decision to apply for an authorisation or a licence. That is in the interest of information giving.
Amendment No. 122 proposes the insertion of a new subsection into section 33 to provide that where an offer is made to a person who does not have a licence or authorisation or who is not an eligible customer the offer will be subject to the grant of a licence or authorisation to that person becoming an eligible customer. This will ensure that the offer cannot be changed once it is made. It will give a degree of certainty to a person who is seeking to enter the market.
Amendment No. 119 seeks to give information before an application is made to ensure there is openness in the transaction or in the debate, but once the offer is made it cannot be changed. This will give a degree of certainty to a person seeking to enter the market. There are two stages - the information giving process and the certainty of the offer made.
It seems to be widening the scope to whom information is made available, previously it was to the holder of a licence, authorisation holder, or eligible customer but now it must be made available to any person. I do not know why the provision is being widened to that degree. Why would any person need this information other than the categories previously described?
As the Bill is set out, it provides only for the applicant for an authorisation or a licence or an eligible customer to enter into agreement. In some cases one would be entering into the agreement blind in the absence of important or relevant information. We are seeking to ensure that whoever makes the application will be armed with the full facts and information to enable them to make an application if they so wish.
Does this arise from complaints? I certainly would have received complaints from people who want to become producers and could not get any information.
That is right.
In fairness to the ESB, it should be put on record that people were looking for information from the ESB when they had no right to get it. People are not entitled now to go to the ESB before we pass this legislation. However, they will have a right to it when the Bill is enacted.
As a normal courtesy people would expect to be given the information.
That would be giving them a commercial advantage and in my opinion the ESB is right not to give it to them until the legislation is enacted.
The Bill is couched so that only the eligible customers or the licence and authorisation holders could get the information but we are changing that so that any person who might wish to become a licence or authorisation holder should be armed with the information so that they can make a decision.
Amendment No. 121 is an alternative to amendment No. 102. Therefore amendments Nos. 120 and 121 will be discussed together by agreement.
I move amendment No 120:
In page 25, subsection (2), line 2, after "section" to insert "within such time period as may be specified by the Commission".
This section provides that the ESB must offer to enter into a contract with any prospective entrant to the electricity market for use of the transmission and distribution system, subject to terms and conditions. The subsection provides that the commission may give directions to the ESB on the terms and conditions which may be set in an agreement for connection and use of the system.
The amendment provides that the commission may set a time limit for the ESB to comply so that there could be no tardiness and that it could not procrastinate in complying with the direction. This amendment will make the subsection consistent with section 32(1) which contains a similar time limit provision. The implication is that if it suited, the ESB may drag its heels but these provisions mean the information will be provided within a certain time.
I strongly welcome this amendment. When I was responsible for renewable energy, the ESB deliberately frustrated a third party accessory to renewable energy by not making information available at all, and it would not give them the information. Let me add there is not much point in saying it is required to do so unless there is a stick as well so that if it does not doe so X will apply.
When there is provision in the Bill, perhaps the commission can apply sanction for not complying with the law, or the people who do not get the information can take action for compensation, but I would like to have seen a penalty clause in the Bill if the ESB does not provide the information because it was most tardy in that respect.
Tardy was the word I used, which I think is a kind word but procrastination is another way to describe it. If there is a specified time limit, it ill befalls the applicant who would not comply with it. One does not like to use too much of the bata mór.
Does Deputy Coveney wish to comment on amendment No. 121, which is an alternative to amendment No. 120 because the procedure is that he cannot move the amendment unless he deals with it now.
This amendment states that in page 23, subsection (2), line 2, after "section" to insert "and within whichever time deadlines as may be required by the Commission". It is essentially the same as the Minister's but the wording is slightly different.
I agree with the thrust of the Deputy's remarks. His amendment is tacitly accepted in my amendment.
Amendment No. 122 was discussed with amendment No. 119.
I move amendment No. 122:
In page 25, between lines 2 and 3, to insert the following subsection:
"(3) An offer made undersubsection (1) to a person who is not the holder of a licence under section 13 or an authorisation under section 15 or an eligible customer shall be subject to the grant of a licence or authorisation to that person or to that person becoming an eligible customer.”.
Amendment No. 124 is related to amendment No. 123. Amendments Nos. 123 and 124 to be taken together by agreement.
I move amendment No. 123:
In page 25, subsection (3)(a), line 5, before “it” to insert “it has demonstrated to the satisfaction of the Commission that”.
This amendment is required to clarify the intention of the text. The subsection sets out the circumstances where the ESB is not obliged to grant access to the system and section 33(3)(a) provides that the ESB is not obliged to grant access to the system where making a connection or granting use of the system would not be in the public interest, for example, where in order to make a connection a new line is required and the ESB was unable to obtain planning permission for the development. Clearly in those circumstances the statutory obligation on the ESB would be outweighed by the public interest served by the planning process, and the ESB could not be accused of having failed in its statutory duty. Equally if the ESB refused to make an offer other than where another exclusion applied, it would be required to prove a public interest case.
This amendment will provide that where the ESB refuses access to the transmission or distribution system on public interest grounds, it first must make its case for that refusal to the Commission for Electricity Regulation.
Amendment No. 124 provides that the board shall not be required under subsection (1) to enter into an agreement where it is not in the public interest, as determined in writing by the commission. This is more or less the same as the Minister's amendment and we are seeking to ensure the ESB will be obliged to give a proper reason and the commission would have the full facts in writing.
My amendment contains the thrust of the Deputy's amendment.
I move amendment No. 125:
In page 25, subsection (3), between lines 7 and 8, to insert the following:
"(b) any reference to 'the public interest' in this Act shall be understood as being distinct and materially separate from any interest on the part of the State or on the part of any institution or group of institutions of the State or any public authority as defined insection 36(4)(b),”.
The amendment refers to the public interest. Section 33 (3) which deals with the terms for connection to a new transmission or distribution system, states:
The Board shall not be required undersubsection (1) to enter into a an agreement where——
(a) it is not in the public interest to provide additional capacity to meet the requirements to be imposed by that agreement,
Earlier we discussed the definition of a public service obligation.
This is the Holy Grail.
It is necessary to clarify what is meant by the public interest so people understand these fine words and aspirations. I am seeking that the concept of public interest in this Act shall be understood as being distinct and materially separate from any interest on the part of the State or on the part of any institution or group of institutions of the State or any public authority as defined in section 36(4)(b)".
The Deputy seems to suggest that public interest refers to individuals rather than to institutions.
That is an interpretation. As in our previous discussion on PSOs, which was interesting, I am trying to define "public interest" other than in a general manner. I feel the concept is left hanging and that there are as many interpretations as there are groupswhich would like to think they have an explanation.
Public interest means the general interest rather than the interest of a public authority. The board is deemed to be a public authority only for the purposes of the acquisition of land, etc. I do not think it is appropriate to include the amendment here.
This follows our previous discussion on PSOs and the question will arise, perhaps at the appeals stage when challenges are being made.
Perhaps the Minister would consider bringing forward an amendment to the section dealing with definitions on Report Stage which includes a definition of public interest.
It would be very difficult to define public interest. For example, it might be in the public interest to have a county council made up of Fianna Fáil members, or Labour or Green Party members. In this context, I congratulate everybody who was successful in the local elections. Deputy Sargent's wife was successful, as was the Deputy himself. The Coveney's were also successful.
Fianna Fáil performed very well in the Minister's area.
Yes, five of the seven councillors returned were Fianna Fáil. I was waiting for somebody to say that.
It is a pity the chairman did not invite Dana who could give us a song.
Did Members hear her on Vincent Browne's radio show last night? It was so funny.
I am resigned to the fact that the definition of the public interest will be debated fully at the appeals stage.
I move amendment No. 126:
In page 25, subsection (7), line 40, to delete "unfairly" and substitute "prejudicially".
This is a much simpler amendment. The word "unfairly" is very difficult to define if a person is challenging what is fair and what is not fair. If something is "prejudicial" then people can prove it without having a value ascribed to it.
I support the amendment. "Unfairly" is a very vague term.
What does the Deputy mean by prejudicial?
Subsection (7) states "the Board shall not discriminate unfairly as between any persons or classes of persons". Dealing fairly with the matter could be prejudicial in some ways, depending on who examines the matter.
Therefore, it is entirely subjective.
It is and that is the problem. It is very subjective. On the other hand, "prejudicial" implies a little more measurement and one can see where the prejudice lies or assess the prejudice. If the amendment is accepted the subsection would read "the Board shall not discriminate prejudicially as between any persons or classes of persons".
I think "unfairly" is a more regular and understood word as it implies the use of adverse discrimination.
I will not hold up proceedings on the matter.
I think the word "unfairly" is superfluous to what the Minister is trying to describe in the subsection, which could read "the Board shall not discriminate as between any persons or classes of persons".
We discussed this earlier. Although I do not agree with it, there can be positive discrimination in terms of quotas of women, etc. Discrimination can be positive or negative and this is why the word "unfairly" is included.
I will withdraw the amendment as there is more to be done and we have other fish to fry.
I move amendment No. 127:
In page 25, between lines 41 and 42, to insert the following subsection:
"(8) Nothing in this section shall disadvantage applicants for licences or authorisations in making offers to potential final customers prior to the issuing of such licences or authorisations.".
The amendment seeks to add a new subsection to section 33 which deals with the terms for connection to the use of a transmission or distribution system. The amendment would allow new entrants to the market to make offers to potential final customers prior to the issuing of licences. This means they could try to drum up business and could not be precluded from trying to get a foothold in the market while they were awaiting authorisation. I think the amendment is reasonable.
Amendment No. 119 is a more measured version of what the Deputy is putting forward. New entrants can get information and, working on that, decide to become a licence applicant. This amendment is complemented by amendment No. 122 which provides certainty in this context. What the Deputy is suggesting, namely, that new entrants should have the ability or right to look for business without being a licence or authorisation holder, is an extension of what is provided for in amendment No. 119. In the context of that amendment, before becoming licence holders new applicants should have the right to get information which will enable them to make a decision to become a licence holder and seek business.
I think we are both talking about the same thing.
Amendment No. 134 is related to amendment No. 128 and both may be taken together. Is that agreed? Agreed.
I move amendment No. 128:
In page 25, subsection (1), line 44, after "charges" to insert "in respect of the various classes and categories of primary electricity supplier".
These amendments seek to establish the Minister's intention to add to the Bill. The Bill says the board shall prepare statements for the approval of the commission setting out the basis on which charges are imposed. Does that include the various classes and categories of primary electricity supplier? I ask that because there is intense interest from different categories of primary electricity suppliers in the different weight being attached to each of their activities. If the commission is to set out the basis, is that the basis on which it will work? Will the Minister explain the basis?
The amendment would enable the board to impose different charges on different electricity suppliers for use of the transmission and distribution systems. Costs for connection to and use of the transmission and distribution systems should be on a cost reflective basis to avoid the cross subsidisation by one electricity supplier over another.
Section 33(7) places a duty of non-discrimination on the ESB in dealing with the provision of access to the transmission or distribution system. This provision meets the requirements of the electricity directive. The ESB will grant access to its generating stations as well as to those of its competitors. It is important that it is required to comply with the statutory duty of non-discrimination in how it deals with those who apply to it. Its stations are involved.
I was interested to hear what the Minister said. Coincidentally, it ties into our previous discussion on discrimination and unfairness because very often it is complicated. I cite as an example the argument made by the renewable energy sector which would, by definition, operate a much lower power output as against a large scale generating station. If we are to take account our stated aim of encouraging the growth of renewable energy and if we have a level playing pitch, there would be considerable disadvantage in applying a similar charge to a wind farm and a large peat or coal station. That is why I ask that thought be given to the basis on which charges are imposed.
The Deputy means the classes and categories.
Thought should be given to fairness so this is not seen as a mile for mile connection charge. A considerable number of connections would be required to equate several wind farms to one large generating station.
The earlier section imposes a duty of non-discrimination on the ESB, which will also have the older stations knocking on its door. The Deputy has spoken about smaller generators such as wind farms or those using wave power. The duty of non-discrimination imposed on the ESB is a good comfort blanket in its dealings ——
I agree, in principle, that non-discrimination is good. If non-discrimination is to be used as a yardstick could we talk about grading the power output of the various stations? A larger operator would be at a considerable advantage if a level playing pitch applies because that would not take account of the size of the operation. We are also talking about PSO. If the smaller suppliers are located in economically isolated areas, they will provide a function above and beyond generating electricity. This needs a little more thought.
This may be dealt with in an earlier section which has been postponed. I would prefer to come back to the Deputy.
That is wise. We may think a little more about it. I am happy to withdraw the amendment taking account of what the Minister said about giving more thought to it. We will look at it again on Report Stage.
Amendment No. 134 is a little more specific and proposes the inclusion of an extra subsection. It states: "A charge for connection to or for the use of the transmission or distribution system of the Board in accordance with the directions given by the Commission under this section shall be calculated so as to enable the Board to - (a) promote sustainability in the energy sector generally,".
This amendment is more detailed than the previous one.
Unfortunately, the amendment does not deal with another issue which came up in the discussion, the public service obligation in isolated areas where there would be smaller generating stations.
Amendment No. 134 states: "(c) promote local energy production for local consumption in line with the principles of the Local Agenda 21." I accepted an amendment tabled by Deputy Sargent and Deputy Stagg earlier regarding the requirement on the commission to have regard to that. This is a much more precise and detailed amendment which I would be prepared to accept.
Amendment No. 130 is related to amendment No. 129 and both may be taken together. Is that agreed? Agreed.
I move amendment No. 129:
In page 26, subsection (3), between lines 11 and 12, to insert the following:
"(b) the form and the extent of the information to be provided by the Board to applicants,".
Both amendments relate to section 34 which deals with the approval by the commission of a statement prepared by the ESB on the basis for making charges for connection to and use of the transmission. My amendment proposes to amend subsection (3) to make clear that the commission could direct the ESB on the form and content of information to be given by the ESB to applicants seeking connection to or use of the system. This is intended to ensure the information given to applicants can be set out in a manner which is of assistance to them.
Deputy Yates's amendment seeks to do the same thing. We must be drinking from the one pool. If the Deputy will agree, it is a case of the Deputy's amendment being inserted in the proper jargon.
The Minister outlined more or less what our amendment seeks to achieve. Our amendment would oblige the commission to require the ESB to be open in supplying information to people who wish to enter and use the system. The Minister's amendment fulfils the same function.
Amendment No. 131 is in the name of the Minister. Amendment No. 132 is related. Therefore, amendments Nos. 131 and 132 may be discussed together by agreement. Is that agreed? Agreed.
I move amendment No. 131:
In page 26, subsection (4), line 21, after "Board" to insert "shall be calculated".
These amendments follows from the earlier two. The amended wording of this subsection following the insertion of these amendments would be:
A charge for connection to or for use of the transmission or distribution system of the Board shall be calculated in accordance with directions given by the Commission under this section so as to enable the Board to re-cover . . . ".
These amendments are required to clarify the intended meaning of this subsection - that it will be the responsibility of the commission to determine how charges for connection will be calculated.
I move amendment No. 132:
In page 26, subsection (4), line 22, to delete "shall be calculated".
I move amendment No. 133:
In page 26, between lines 27 and 28, to insert the following subsection:
"(5) The Commission, solely, will determine what constitutes an 'appropriate proportion' referred to insubsection (4)(a) and a ’reasonable rate of return’ referred to in subsection (4)(b).”.
The purpose of this amendment is to make it absolutely clear that it is not for the board to determine how much it can recover from its competitors, even though previous clauses give the commission power to give the ESB directions about charges. It is essential that the commission is specifically responsible for determining what is reasonable and appropriate in recovering costs.
The amendment more or less speaks for itself. It tightens the text to make it absolutely clear that in subsection (4)(a) the "appropriate proportion" of the costs is determined by the commission and not by the board and the "reasonable rate of return" on capital is determined solely by the commission.
I agree with what Deputy Coveney said but amendments Nos. 131 and 132 address the same thing. It is just putting it like this: that it "shall be calculated in accordance with directions given by the Commission under this section so as to enable the Board to recover". The thrust is the same. I do not know from where we got all these amendments.
Great minds think alike.
Is the Deputy joking? Fools seldom differ. Excuse me.
I guess these amendments are coming from the ESB. In any event, it does not matter.
Amendment No. 133 is admirable in content and it conforms with amendments Nos. 131 and 132 which were in my name.
The ESB is signing up to a considerable amount of regulation over which the commission will have power. Will the capital costs of the transmission lines be met by the ESB?
Does the Deputy mean the capital cost of new lines?
I refer to the maintenance of the existing network, etc., and any further development of the network in the future. I have not met anybody from the ESB nor have I discussed this with anybody from the ESB. Is the Minister happy that the regulations being imposed are fair to the ESB?
I am. The Bill is a balancing act.
Yes, it is. For example, years ago during the energy crisis the late Minister George Colley introduced a Bill whereby private enterprise was encouraged with grants to develop bogs and Bord na Móna was obliged to assist the private development of bogs and had to sell them some bogs. For many years it had an adverse effect on Bord na Móna, which had many financial difficulties. There were other reasons for the difficulties, I might add, and that was responsible for only a small portion of them, but in this instance I would like us to be happy that these regulations and conditions, which will be quite stringent, will not hamper or prevent the ESB from doing the work it has been doing.
They will be onerous. In an era of competition, the ESB will not be doing it on its own. There will be competitors.
The lines have been owned by the ESB.
I suppose they are owned by the people.
Yes. It is a semi-State company.
It would appear from the section that the basis of the charges will be on information which will be supplied to the commission by the ESB. The commission does not appear to have the authority to investigate if they are accurate. One could find that the charges would be tantamount to a refusal to allow people to connect, if the price was so high.
Overall the regulator must be fair and must act in a reasonable manner. If he doubted information, or that he was not getting the necessary information, as we discussed earlier, he may go into the properties although we hope it will never come to that. However, he has that right.
For example, if there was an application for generation and transmission from Alcan, which is located across the River Shannon from Moneypoint, to generate its own electricity and tap into the ESB's transmission line, which goes under the River Shannon and which was sunk some ten or 15 years ago, it would be difficult to determine the costs and charges. The point relevant to this section is that it would not result in a refusal to offer connections to companies if the charges were prohibitive.
I am content that the commission will be able to ascertain those facts.
I move amendment No. 135:
In page 26, subsection (4), line 43, after "shall" to insert ", subject to the approval of the Commission,".
This amendment would ensure that any charges for use of the electricity system that are imposed by the ESB before the Act comes into operation will be subject to the approval of the commission, once it is established. Therefore, the regulator will issue retrospective approvals until such time as the new statement of charges is issued.
I move amendment No. 136:
In page 27, subsection (1), line 3, after "capacity" to insert "or where the applicant considers that the Board's proposed charge for work to be carried out is excessive".
This amendment gives the commission the power to allow a person to construct a direct line where it is satisfied a person can build a line more economically than the cost quoted by the ESB.
Is the Deputy referring to a connection to an existing line?
Yes. This does not compromise in any way the specification of the line. Its main impact is to ensure the ESB's quotation is competitive and fair, based on the knowledge that an alternative would be available to the applicant. In other words, it will ensure the cost quoted by the ESB will be competitive because of the existence of an expressed alternative.
Is the Deputy referring to the construction of a line?
Yes. If the Minister reads the text surrounding the point where it is proposed to insert the amendment, she will see the position more clearly. It is intended to insert it after the word "capacity".
I understand the point of view put forward by the Deputy and support the amendment. However, I do not believe it is possible for the ESB to quote excessive charges because the regulator will not allow that to happen. The regulator will be obliged to regulate the charges imposed on others by the ESB. Therefore, it will be impossible for the company to levy excessive charges. Those charges must be based on the actual cost.
Would the regulator not be better able to measure that cost if an alternative supplier of the line were available?
Is Deputy Coveney referring to the line?
On economic, social and environmental grounds, it would be far better if there was only one transmission system. I cannot see how constructing a new line could be less costly than gaining access to the existing transmission system. It would be much more preferable to retain the existing centrally controlled single transmission and distribution system. Under the terms of the Bill, a grant for a direct line can be obtained on refusal of access to the electricity transmission system on the grounds of lack of capacity. However, the amendment suggests that an applicant should have the right to construct a line if he or she believes the charge to be excessive.
The amendment would give the commission the power to construct a line where it is satisfied the person can build a line more economically and where the specifications of the line would not be compromised. If an extension to a line can be carried out more competitively by a company other than the ESB, that should be taken into account in respect of the cost proposed by the ESB.
As Deputy Stagg stated, the regulator will be intent on ensuring the cost is proper and reasonable. I cannot accept the amendment because I see no need for it.
The regulator's decision would be much easier if he had the option of a cheaper alternative which does not compromise the specifications.
On all grounds, I believe it is better to have a single distribution and transmission system.
Under Deputy Coveney's amendment, a company might charge less than the ESB to erect between five and 20 pylons necessary and construction a new line.
Is Deputy Coveney referring to additional lines?
I presume he is referring to extensions to existing lines. However, it would be highly undesirable to see duplications occurring.
We would then have the position which obtains in respect of the construction of telecommunications masts by the three companies which operate mobile telephone licences. Those companies should operate their services from shared masts. That is why I stated it would not be necessary, on environmental and economic grounds, to do what the Deputy is requesting.
Under this section, the commission has the power to grant permission for separate transmission lines. Deputy Coveney is trying to ensure this would be done——
That would happen only in very limited circumstances.
Nevertheless, the provision exists and it would apply to cases where permission was granted by the commission to construct an alternative line. In that instance, another company might offer a more competitive alternative to the ESB.
Permission would be granted only in very limited circumstances. The provision exists only because of the directive. It is my genuine belief that the country is best served by a single distribution and transmission system, both aesthetically and commercially.
The section states that permission to construct a direct line may be granted by the commission where access to the transmission or distribution system has been denied due to lack of capacity.
That is one of the limited circumstances to which I referred.
Perhaps I went overboard in referring to the construction of five additional pylons to facilitate the extension of electricity supplies to a remote farmhouse. That is not really what we are discussing.
Most farmhouses are already connected to the system.
I was referring to the construction of a direct line.
In competition to the existing line?
I believe the country is best served by the single transmission and distribution system.
The situation would never arise where it would be cheaper to construct new lines than to connect to the existing line, and the regulator would not allow an excessive charge to be levied.
That is what I said at the outset.
A new line would be constructed where a company such as Roadstone built a power station to service its operations. In that instance, it would be necessary to construct a new line to connect the centre of the company's operations with its power station.
Deputy Yates's notes on the amendment, which I have in my possession, refer to a "direct line" supplying electricity from a power station to, for example, a business.