Eamon Ryan (Dublin South, Green Party)

The regulation of charges in the natural gas market, including tariffs to final customers, is the statutory responsibility of the Commission for Energy Regulation, CER, under the Gas (Interim) Regulation Act 2002.

The gas market has been fully opened up to competition since July 2007. Experience in other markets has shown that there is a time lag between full market opening and the emergence of fully viable competition. The small size of the Irish retail gas market adds to the challenge.

The current regime of regulation in the upper end segment of the Industrial and Commercial sector is known as the Regulated Tariff Formula regime. The Regulated Tariff Formula took effect in 2003 for gas customers consuming from 188,000 to 9 million therms per annum. Prior to its introduction in April 2003, Regulated Tariff Formula eligible customers could choose from a range of Bord Gáis Energy published tariffs. The Regulated Tariff Formula regime introduced a price regulation formula reflective of monthly wholesale prices and the cost of delivering gas to the customer's premises.

This regime was introduced as an interim measure in 2003 to encourage competition in this sector at a time when Bord Gáis Energy Supply, BGES, had 100% of the market of this sector. BGES now has approximately 41% of this sector.

I am advised by the CER that it launched a review of the Regulated Tariff Formula last October. This review is in line with the commitment by the CER that it would keep the case for retaining or removing the Regulated Tariff Formula regime under regular review. The CER has indicated that it considers the time may now be right to remove the RTF regime. The decision process involves a consultation process on the potential of the regime. The consultation is ongoing.

The continued entry of new suppliers into the gas market, with Phoenix and ESBIE being the most recent entrants, demonstrates that regulatory policy to underpin the growth of competition in gas supply has paid dividends for consumers. The decision now to be made by CER following the consultation process is whether competition has now taken sufficient hold for the Regulated Tariff Formula to be removed in the interests of business customers. I have no doubt that in reaching a balanced and evidence based decision CER will take due account of all the perspectives on the matter including the views of all suppliers and of the business customers themselves.

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