Tommy Broughan (Dublin North East, Labour)

Deputy Broughan also raised the issue of the extension of the go live date for the market. Following a review by CER and its Northern Ireland counterpart, NIAER, on the progress of the project to deliver the SEM, the Minister, Deputy Noel Dempsey, and the Secretary of State, Peter Hain, MP, endorsed a recommendation of the regulatory authorities to extend the go live date for the SEM from 1 July 2007 to 1 November 2007. The regulatory authorities, which set the go live date for 1 July 2007, advised that following extensive consultation with transmission system operators and the industry that the target date should be extended by four months. As some Deputies pointed out, the brief extension is to enable the extensive market testing necessary and to ensure all necessary systems are in place to allow for the effective operation of the market through project assurance, impact analysis and market trials. The Minister confirmed that both Governments are committed to delivering the necessary legislation by April 2007 to underpin implementation of the new market in the run up to day one.

I note what Deputies Broughan and Eamon Ryan said in regard to the agreement reached between the CER and the ESB on the reduction of the ESB's generating capacity and the development of new generating unit at Aghada. I confirm that any capital expenditure by the company on the proposed project would be subject to the prior approval of the Minister and the Minister for Finance. Deputy Eamon Ryan raised the possibility of a monopoly developing in the SEM. While policy measures are being developed within the context of the White Paper on Energy to deal with the ESB's dominance in generating, I also point to the market power mitigation measures the regulators have developed as part of the market rules governing the SEM. These measures include the power for regulators to direct generators to sell part of our electricity at pre-determined prices to designated suppliers.

Deputy Eamon Ryan referred to the short-term price impact analysis being undertaken by the regulators. The analysis, which is still being completed, indicates a likely small increase in the first year. This reflects the up-front market set-up costs and is projected to be reversed almost totally by the end of the second year. The important point to note however is the focus on the long-term gain. The SEM will deliver major cost savings to the public, North and South, and the analysis shows it is likely to lead to savings of approximately €150 million within the first ten years and over €400 million over 20 years of operation.

I thank Members for their support and their welcome for the provisions of this Bill. The Bill is expected to conclude in both jurisdictions by April 2007. We are anxious to have it through this House by Christmas and I appreciate the support of Deputies Broughan, Durkan and Eamon Ryan. We look forward to further discussion on Committee Stage and to dealing with any amendments. I ask members of the select committee to table amendments as quickly as possible so they may be given full and fair consideration.

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