Mr. Jim Gannon:

The letter of the Minister at the time noted that job losses in the economy would of themselves create greater energy affordability pressures for domestic consumers. Separately, it is worth noting that if we lose large energy users paying the network tariffs, then the tariffs would naturally become weighted on those who remain. In other words, if those large energy users are being lost that contribution goes and is dissipated among others.

On the decision, it was for the CRU, or the CER as was at the time, to determine the detail of how this should be implemented, in terms of the network tariff structures. We did this in consultation around the price review 3 period. It was implemented on 1 October 2010. As Ms MacEvilly said, annually, following that, we review the tariffs that are to be recovered by the network operators. We would have consulted on those. This recovery would have been part of the underpinning consultation process.

Separately, in a price review period every five years, we look ahead to see what is required in terms of investment and operational costs. This policy would have been part of that. In 2020, we proposed to do a full and detailed review of all network tariffs to see if they were cost-reflective. This would have been separate from the annual price review and the five-year review. This was to look at our network tariffs and to see, in the context of decarbonisation and lots of flexible load coming in, if the percentages we discussed still reflective. We commenced that process with the ESB Networks and EirGrid to look at these tariffs and network tariffs. That is where the initial analysis came about in the ESB Networks and EirGrid. It was in that context and where we were looking at all network tariffs to see whether they were cost reflective, that it prompted this analysis to see where costs were being allocated from this element, which was a bolt-on to the natural tariffs.

Towards the end of 2021, when the error was identified, we moved quickly into 2022 and in March, as noted, Russia invaded Ukraine which put significant pressure on tariffs and on retail prices, in particular. That then became part of the national energy security framework. Under that, we had different Departments, the regulator, the network companies and others to look at security and price at that time of crisis. In effect, it came about in a time of crisis, without a sunset being clearly placed on it. During that time of crisis, there was dialogue around the table, as part of the national energy security framework. An action arising from that was to examine and to reverse this decision.