I welcome the Minister for Communications, Energy and Natural Resources, Deputy Alex White.
Energy Bill 2016: Committee and Remaining Stages
Sections 1 to 4, inclusive, agreed to.
SECTION 5
Amendments Nos. 1 and 2 are related and may be discussed together, by agreement. Is that agreed? Agreed.
Government amendment No. 1:
In page 6, to delete line 30, and in page 7, to delete lines 1 to 13 and substitute the following:
" ‘improper conduct’ means—
(a) failure by the holder of a licence under subsection (1)(b) of section 14 to comply, under subsection (2M)(b) of that section, with such standards of performance as may be specified by the Commission under subsection (2M)(a) of that section in the licence concerned,
(b) failure by the holder of a licence under section 14(1)(e), (g) or (h), as the case may be, to comply, under Regulation 26(1) of the European Communities (Internal Market in Electricity) Regulations 2005 (S.I. No. 60 of 2005), with such standards of performance as may be specified by the Commission under Regulation 26(2) of those Regulations in the licence concerned,
(c) failure by an interconnector operator to comply with the determination of the Commission under section 34A(5),
(d) failure, by the holder of a licence under section 16(1)(a) of the Gas (Interim) (Regulation) Act 2002, under section 16(1F) of that Act, to keep, and make available on a request being made, data relating to transactions in gas supply contracts and gas derivatives with wholesale customers, transmission system operators and storage and LNG operators, or
(e) failure by the holder of a licence under subsection (1)(a), (c) or (d) of section 16 of the Gas (Interim) (Regulation) Act 2002 to comply,
under subsection (4A)(b) of that section, with such standards of performance as may be specified by the Commission under subsection (4A)(a) of that section in the licence concerned;".
The purpose of amendment No. 1 is to broaden the definition the definition of "improper conduct" by the addition of two new provisions at subsections (a) and (e) to the definition of improper conduct. Subsection (a) provides that improper conduct will include the failure of the holder of a licence to supply electricity to comply with such standards or performance as may be specified by the commission in the relevant licence. Subsection (e) provides that improper conduct will include the failure by the holder of a licence in respect of the supply of natural gas, the ownership and operation of a transmission system or the ownership and operation of a distribution system to comply with such standards or performance as may be specified by the commission in the relevant licence.
Under the Electricity Regulation Act 1999 and the Gas (Interim) (Regulation) Act 2002, responsibility for the regulation of the electricity and gas markets is a matter for the Commission for Energy Regulation, CER. As I have stated, the broad legislative underpinning for the regulation of the gas and electricity sectors is based largely on a suite of statutory functions placed on the regulator, to which the CER, in turn, gives effect through conditions of licences that it grants under the Electricity Regulation Act 1999, as amended, and the Gas (Interim) (Regulation) Act 2002, as amended. Under the existing legislation, the CER may modify a licence. It would be a matter for the CER as the independent regulator to specify what standards or performance with regard to the supply of electricity or natural gas to final customers it determines ought to be achieved by the relevant licence holder.
Amendment No. 2 is a minor technical amendment that is required in view of amendment No. 1 being accepted by the House.
Amendment agreed to.
Government amendment No. 2:
In page 8, line 2, to delete "(a) to ©" and substitute "(a) to (e)".
Amendment agreed to.
Section 5, as amended, agreed to.
Sections 6 to 10, inclusive, agreed to.
NEW SECTION
Government amendment No. 3:
In page 23, after line 40, to insert the following:
“Functions of Commission for Energy Regulation
11. Section 9 of the Act of 1999 is amended by inserting the following subsection after subsection (1F):
“(1FA) For the purposes of subsection (1F) ‘final customer’—
(a) in the case of an electricity undertaking, has the meaning given to it by section 2, and
(b) in the case of a natural gas undertaking, has the meaning given to it by section 2 of the Gas (Interim) (Regulation) Act 2002.".".
This is a technical amendment to section 9(1F) of the Electricity Regulation Act 1999. Section 9 of the Act provides for the functions of the CER and subsection (1F) provides that it shall be a function of the CER to ensure there is a high standard of protection for all final customers, including in their dealings with energy undertakings. Final customers as defined under section 2 of the 1999 Act only refers to those involved with electricity. This gives rise to an unintended inconsistency in that section 9(1F), as stated, appears to apply only to final customers of electricity and does not include final customers of natural gas. Therefore, it is intended to insert a new section 9(1FA) to clarify that the term "final customers" is inclusive of final customers with respect to natural gas.
Amendment agreed to.
Sections 11 and 12 agreed to.
NEW SECTION
Government amendment No. 4:
In page 24, between lines 21 and 22, to insert the following:
“Licences to generate and supply electricity
13. Section 14 of the Act of 1999 is amended by inserting the following subsection after subsection (2L)
“(2M) (a) The Commission may, in carrying out its function under section 9(1F), after consultation with the holder of a licence under subsection (1)(b), specify in the licence concerned such standards of performance and quality in connection with the supply of electricity to final customers as the Commission determines ought to be achieved.
(b) The holder of a licence referred to in paragraph (a) shall comply with such standards of performance as may be specified by the Commission in the licence concerned.”.”.
The purpose of this amendment is to insert a new provision into the 1999 Act. This provision will enable the CER - the regulator - to specify in the licence to supply electricity such standards of performance and quality in connection with the supply of electricity to final customers as the CER determines ought to be achieved by the licenceholder. The provision places a statutory obligation on the licenceholder to achieve and comply with the standards of performance as specified by the commission in the licence. The failure to comply with such standards now comes under the definition of improper conduct.
Amendment agreed to.
Sections 13 and 14 agreed to.
NEW SECTION
Amendments Nos. 5 to 7, inclusive, are related and may be discussed together, by agreement. Is that agreed? Agreed?
Government amendment No. 5:
In page 25, between lines 34 and 35, to insert the following:
“PART 5
AMENDMENTS TO GAS (INTERIM) (REGULATION) ACT 2002
Definition (
Part 5
)
15. In this Part "Act of 2002" means Gas (Interim) (Regulation) Act 2002.".
This is a technical amendment that provides that a reference to the Act of 2002 is a reference to the Gas (Interim) (Regulation) Act 2002. Amendment No. 6 is an amendment to section 13(1) of the Gas (Interim) (Regulation) Act 2002, which refers to the requirement by certain licenceholders to publish, subject to the approval of the commission, a code of operations in respect of all technical design, operational and other requirements, including technical safety criteria relating to connection to and operation of the facilities in respect of which the holder has been granted the licence. On advice of the CER, the obligation under section 13(1) will apply to licenceholders under section 16(1)(c) and 16(1)(d) of the 2002 Act, namely, licenceholders in respect of the ownership and operation of a transmission system or the ownership and operation of a distribution system.
The purpose of amendment No. 7 is to insert a new provision into the Gas (Interim) (Regulation) Act 2002. Sections 16(1)(a), (c) or (d) of the 2002 Act refer to the holder of a licence in respect of a supply of natural gas, the ownership and operation of a transmission system or the ownership and operation of a distribution system.
This provision will enable the CER to specify in licences issued under section 16(1)(a), (c) or (d) of the Act of 2002 such standards of performance and quality in connection with the supply of natural gas to final customers as the CER determines ought to be achieved. The provision places a statutory obligation on the licenceholder to achieve and comply with the standards of performance as specified by the commission in the licence. The failure to comply with such standards now comes under the definition of improper conduct.
If I am correct in terms of the order of amendments, there is a proposal to delete section 27. I think that comes under this.
We will deal with that proposal further on.
Amendment agreed to.
Government amendment No. 6:
In page 25, between lines 34 and 35, to insert the following:
“Amendment of section 13(1) of Act of 2002
16. Section 13(1) of the Act of 2002 is amended by substituting “section 16(1)(c) and (d)” for “section 16(1)(a)(iii), (iv), (v) and (vi)”.”.
Amendment agreed to.
Government amendment No. 7:
In page 25, between lines 34 and 35, to insert the following:
“Amendment of section 16 of Act of 2002
17. Section 16 of the Act of 2002 is amended by inserting the following subsection after subsection (4):
“(4A) (a) The Commission may, in carrying out its function under section 9(1F) of the Act of 1999, after consultation with the holder of a licence under subsection (1)(a), (c) or (d), specify in the licence concerned such standards of performance and quality in connection with the supply of natural gas to final customers as the Commission determines ought to be achieved.
(b) The holder of a licence referred to in paragraph (a) shall comply with such standards of performance as may be specified by the Commission in the licence concerned.”.”.
Amendment agreed to.
Sections 15 to 26, inclusive, agreed to.
Section 27 deleted.
Title agreed to.
Bill reported with amendments, received for final consideration and passed.
When is it proposed to sit again?
The House stands adjourned sine die.
The Seanad adjourned at 2.05 p.m. sine die.