Dáil Éireann Debate, Tuesday - 30 November 2004
87 Mr. Allen asked the Minister for Communications, Marine and Natural Resources if regulation in the energy industry is operating to the benefit of industry and thus contributing to the competitiveness of the economy; and if he will make a statement on the matter. [31183/04]
View answerIndependent regulation of the electricity and natural gas industries has been established in Ireland in line with EU requirements. The Commission for Energy Regulation, CER, was initially established in July 1999 by virtue of the Electricity Regulation Act 1999 to underpin an open, transparent and accountable regulatory process for the electricity industry. The commission's jurisdiction was expanded in 2002 following the passing of the Gas (Interim) (Regulation) Act 2002 to incorporate the regulation of the natural gas industry. It has an overriding duty to carry out its statutory functions and exercise its powers in a manner that does not discriminate unfairly and which protects the interests of final customers and not just industry.
The CER's mission is to promote electricity and gas markets that deliver choice, high quality and competitively priced electricity and gas to consumers on a safe, secure and sustainable basis. The CER adheres to due process in arriving at its decisions and engages in a wide-ranging consultation process on all aspects of the future direction of the electricity and gas industries.
In the electricity market, the CER facilitates competition by authorising the construction of new generating plant and licensing companies to generate and supply electricity. Similarly, in the gas sector, the CER issues consents for the construction of pipelines and licenses gas suppliers. The CER takes an active regulatory stance in relation to the operation, maintenance and development of the electricity and gas transmission and distribution networks, as well as approving tariffs for third party access to these systems. The CER also has the key responsibility of regulating prices charged to customers by ESB and BGÉ.
Under the regulatory oversight of the CER, Ireland is moving from a de facto monopoly situation to a competitive market in industries with relatively long lead times for investment. Therefore, changes need to be conceived and effected in an orderly and measured manner so as to ensure that the benefits are sustainable in the long term. The incremental approach to full liberalisation of these markets in 2005 adopted by Ireland is the correct policy choice, given that our systems are small by comparison with our EU partners and not as heavily interconnected. The CER already has a wide-ranging remit and I am providing, in regulations, for the extension of its functions so as to meet the requirements of the second EU electricity and gas directives, further facilitating market liberalisation.
The Deputy will also be aware that I am strengthening the CER by expanding its membership to a preferred three-person model, having regard to the importance of the energy sector in terms of competitiveness of the Irish economy. In addition, I consider it opportune that, in the interests of proper and effective regulation of the electricity and gas markets, the Minister may issue policy directions of a general nature to the CER. As it stands, I have certain limited statutory powers to give directions to the CER in relation to electricity trading arrangements. While I am proposing additional powers to issue policy directions in the Energy (Miscellaneous Provisions) Bill which is currently being drafted by the Office of the Parliamentary Counsel, it would be my intention to use any such powers sparingly.
