Thursday, 4 March 2004

Questions (102)

Thomas P. Broughan


97 Mr. Broughan asked the Minister for Communications, Marine and Natural Resources the timetable and likely regulatory changes for the development of a deregulated electricity market by 2005; and the legislative changes necessary and likely timetable. [7368/04]

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Written answers (Question to Minister for Communications, Marine and Natural Resources)

Liberalisation of the electricity market in Ireland is well under way. It is proceeding on a phased basis under the regulatory oversight of the Commission for Energy Regulation.

By virtue of the Electricity Regulation Act 1999 and the European Communities (Internal Market in Electricity) Regulations 2000, a new regulatory regime was established in Ireland. It is designed to facilitate and stimulate properly regulated and fair competition. Combined, these two legal instruments implementing EU Electricity Directive (96/92/EC) Concerning Common Rules for the Internal Market in Electricity, provide the overall legislative framework for the developing competitive electricity sector.

The Electricity Regulation Act 1999 provided for the introduction of limited competition in the electricity market. It also provided for the establishment of the CER that took over from the ESB the function of licensing the generation and supply of electricity and overseeing access to the transmission and distribution systems and related charges.

The subsequent European Communities (Internal Market in Electricity) Regulation 2000 provided for,inter alia, the licensing and establishment of the independent transmission system operator known as EirGríd. It also provided for the functions and licensing of the transmission system owner, the ESB, and the distribution system operator.

The EU Electricity Directive 2003/54/EC concerning common rules for the internal market in electricity and repealing Directive 96/92/EC is required to be transposed into Irish law by 1 July 2004. It strengthens the unbundling provisions of the transmission and distribution operators, explicitly provides for levels of consumer protection and sets out a timetable for market opening. It also requires member states to ensure proper regulation by independent national regulatory authorities.

The regulatory framework currently in place here already takes account of many of the provisions of the new directive. At present my Department is finalising a draft statutory instrument under the European Communities Act 1972 to give effect to the requirements of the new directive and build on the measures already in place. While unbundling in the area of transmission operation has already been catered for, the legislation will provide for the legal unbundling of the distribution system operator.

The legislation will seek to explicitly set out the rights of consumers regarding their dealings with suppliers along with enshrining the right of all customers to be supplied with electricity of a specified quality at reasonable prices.

With regard to the market opening provisions of the directive, on 19 February electricity market opening increased from 40% to 56% by virtue of the Electricity Regulation Act 1999 (Eligible Customer) (Consumption of Electricity) Order 2003 (SI No. 632 of 2003). All large and many small and medium-sized businesses are now eligible customers and are free to source their electricity from licensed electricity suppliers other than the ESB. All customers have been free to purchase electricity from any green or combined heat and power licensed supplier since February 2000 and April 2001, respectively.

The Electricity Regulation Act 1999 (Eligible Customer) (Consumption of Electricity) Order 2003 also provides for the full liberalisation of the electricity market. By 19 February 2005 every customer will be eligible to source electricity from any supplier licensed by the CER. This date is well in advance of the July 2007 deadline for full liberalisation of electricity markets set down in the new electricity directive.