Dáil Éireann Debate, Wednesday - 18 December 2013
144. Deputy Brendan Griffin asked the Minister for Communications, Energy and Natural Resources the impact he envisages the sale of Bord Gáis will have on the Shannon LNG project; if he will review the Government policy of imposing tariffs of energy suppliers who do not use the British-Irish gas interconnectors. [54623/13]
View answer145. Deputy Brendan Griffin asked the Minister for Communications, Energy and Natural Resources if he will confirm that it is within his powers to provide general policy direction to the CER; and if he will make a statement on the matter. [54624/13]
View answer146. Deputy Brendan Griffin asked the Minister for Communications, Energy and Natural Resources the rationale for imposing tariffs of energy suppliers which do not use the British-Irish gas interconnectors; and if he will make a statement on the matter. [54625/13]
View answerI propose to take Questions Nos. 144 to 146, inclusive, together.
The process to sell the Bord Gáis Energy business initiated earlier this year attracted significant interest from a broad range of potential international bidders, reflecting the positive international sentiment towards Ireland. The sale is a very positive development in that it will mark the entry of international strategic investors into the all island energy market. I do not envisage that the sale will have any impact on the Shannon LNG business.
Decisions on the regulatory treatment of the gas interconnectors and tariffing are matters for the Commission for Energy Regulation (CER) under the Gas (Interim ) (Regulation) Act 2002. Accordingly, policy in relation to tariff setting has been settled since 2002 when the Oireachtas conferred responsibility for tariff setting, under the 2002 Act, on the CER. The CER as the independent energy regulator has a remit to protect energy consumers, ensure security of supply and support competitiveness. The CER also has a duty to ensure that new sources of gas for the Irish market do not result in unwarranted increases in the price of gas to business and domestic consumers.
The rationale for the CER’s decision of 29 June 2012 as regards pricing and treatment of the interconnectors is that if the current regime were to persist, and with new sources of gas such as Corrib gas and Shannon LNG, the price of gas would rise significantly for all Irish consumers, regardless of the source of the supply. Given our high dependence on gas for electricity generation this would also give rise to electricity price increases and would negatively impact on Ireland’s competitiveness. Full details of the CER’s rationale for its decision are to be found in the CER Decision Paper of 29 June 2012 (CER/12/087) available from the CER website at www.cer.ie.
The independence of the CER in its decision making is expressly provided for in EU legislation as transposed into Irish law. As regards the issue of a policy direction by me as Minister, Section 10A of the Electricity Regulation Act 1999, as amended, does provide that I may give “general policy directions ” from time to time. However, I am expressly precluded from giving any policy direction in respect of any individual undertakings or persons. Taking account of binding EU legislation as transposed into Irish law in regard to the independence of regulators and the assignment of gas regulatory functions to the CER, including tariffing, I am of the view that Section 10A of the 1999 Act does not provide an adequate legal basis for a direction sought by and for the benefit of an individual entity.
