Pat Rabbitte (Dublin South West, Labour) | Oireachtas source

I thank Deputy Griffin for giving me the opportunity to address the House on this important issue. I have already spoken on the issue in discussion with my ministerial colleague, Deputy Jimmy Deenihan, and with Deputy Arthur Spring, both of whom have consistently engaged with me on this issue.

At the outset, let me underline the Government's positive interest in the potential investment by Shannon LNG. While there is a great deal of misunderstanding of the role of the Minister, I want to express again my personal support to assist Shannon LNG in any way I can to construct an LNG terminal near Ballylongford, County Kerry. Such a facility, together with the bringing onshore of Corrib gas would provide important security of gas supply for Ireland. It would also create some badly needed jobs in north Kerry. However, the recent High Court judgment sets out very succinctly how the decision is not one for the Minister. Deputy Griffin says the decision of the High Court has jeopardised the project, but it was Shannon LNG which sought the judicial review.

Not all Deputies will be aware of the High Court ruling of 11 December last in regard to the judicial review taken by Shannon LNG against a CER decision of 29 June 2012 in regard to the regulatory treatment of the BGE interconnectors. The regulator's decision was a high level decision which set out the principles of a reformed tariffing regime, a regime not scheduled to come into effect before October 2014. In summary, the court upheld the decision of the regulator in regard to gas reform of the tariffing regime. The court rejected Shannon LNG's claims that the regulator's decision breached national or EU law, and that the decision of the regulator had effectively amounted to a State aid to Bord Gáis Éireann as the transmission system owner. The matter of an appeal of the High Court judgment is, of course, an issue for consideration by the company.

Decisions on the regulatory treatment of the gas interconnectors and tariffing are statutorily matters for the CER, under the Gas (Interim) (Regulation) Act 2002. Therefore, policy on tariff setting has been settled since 2002 when the responsibility for regulation of the gas market was conferred by law on the regulator. The regulator, as the independent energy regulator, has a remit to protect energy consumers, ensure security of supply and support competitiveness. The independence of the regulator in its decision making is expressly provided for in EU legislation as transposed into Irish law. The CER also has a duty to ensure that new sources of gas for the Irish market do not result in unwarranted increases in the price of gas to business and domestic consumers.

Tariff reform is being driven by new entry into the system, new sources of gas for the Irish market and the regulator's overriding concern that new sources of gas do not result in unwarranted increases in the price of gas. Tariffs are one consideration for gas and LNG investors, and investment decisions are commercial matters for developers taking account of a wide range of considerations, including suitability of location, international energy price trends, LNG price trends, LNG capacity issues, proximity to markets and a regulatory regime that has certainty.

I understand that subject to no appeal by Shannon LNG, the CER will be turning its attention to tariff settlement. In its decision making, the CER will be informed by EU and Irish law, in particular by developments at EU level in regard to framework guidelines on transmission tariffs that will be binding on all member states via network codes.

There is a need for all interested parties to have clarity on regulatory certainty at the earliest opportunity in regard to future pricing. I very much hope for all concerned, including business and residential consumers, that the constructive input of stakeholders will facilitate timely decision making by the CER. Shannon LNG has until 31 January to lodge an appeal and until then, technically, the CER, Department and Shannon LNG are still involved in a live court case. We need to be sensitive to this while they are still reflecting on whether or not to appeal.

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