Denis Naughten (Roscommon-Galway, Independent) | Oireachtas source

I thank the Deputy for tabling this amendment. We have had quite a degree of discussion on this particular amendment. As the Deputy is aware, the primary focus in the legislation is to provide the commission with the power to impose financial sanctions for improper conduct. Improper conduct will be the failure of a licenceholder to comply with such standards of performance to be developed by the Commission for Energy Regulation, CER, and subsequently specified by the commission in its licences.

This administrative sanctions regime in the Bill is a start in providing the Commission for Energy Regulation with the effective enforcement process and it is not an end. The penalty provision of 10% specified in the Bill is in line with existing penalty provisions in other Irish statutes for regulatory breaches. It is also in line with penalty limits in EU directives. It would not be appropriate to exceed the penalty limits of EU directives. To do so may run the risk of a successful challenge on the grounds of disproportionality of penalties in excess of European norms and this could result, however unintentionally, in preventing the provisions being enforced in practice.

Our priority at this point is to enact the legislation and a more useful approach might be to assess the working of the penalty provisions after a suitable period of operation. At such point and as part of such a process of review, the Commission for Energy Regulation could come before the committee and provide an informed view on the overall effectiveness of the operation of the sanction regime.

As the Deputies are aware, the Commission for Energy Regulation is statutorily independent and is accountable to the committee of this House and not to the Government. On that basis, I cannot accept the amendment. However, I hear where the Deputy is coming from regarding the issue for smaller operators and that this would be disproportionate. The legislation is drafted the way it is in order that the penalties would have to be proportionate. A provision is in the legislation for a company, if it considers this is disproportionate, to go before the courts.

The concern we had with the way this amendment is drafted is that the Deputy is going the other way. He is creating the disproportionality by increasing the threshold. The fear was that it would move out of the civil sanctions regime into the criminal sanctions regime by going over the 10% threshold. I understand where the Deputy is coming from but the legislation as drafted allows for proportionate sanctions up to 10%, which would not disproportionately penalise small businesses over large ones. If the sanction was seen to be disproportionate, the courts could revise those penalties down. The important thing to remember is that this is for a breach of the licensing conditions set down by the Commission for Energy Regulation, CER. We do not yet have those conditions. There would be a very useful role for this committee in engaging with the Commission for Energy Regulation to ensure the conditions on those licences clearly reflect the concerns the public has about the operation of energy companies. Perhaps, with respect to the Chairman and members of the committee, they may wish to bring the commission in here to discuss that before it finalises the licensing conditions to ensure that they clearly and accurately reflect the issues that arise and come up in constituency offices, that the public complain about to CER. I think the concern the Deputy raises is accurately reflected in the legislation as it stands. There is always the safety net of the courts to review that if it is deemed to be disproportionate.