Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

I am pleased to address the House on the Second Stage of the Gas (Amendment) Bill 2023. As Deputies and Senators are aware, the Minister for the Environment, Climate and Communications is the Minister with responsibility for gas policy and all legislation relating to gas and energy policy. The European natural gas directive, Directive 2009/73/EC on common rules of the internal markets in renewable and natural gases and in hydrogen, in relation to the unbundling of ownership of generation, supply and transition systems in the energy market, prevents the Minister for the Minister for the Environment, Climate and Communications from assuming the role of majority shareholding Minister in Gas Networks Ireland and in its parent, Ervia. As such, the Minister for Housing, Local Government and Heritage is the majority shareholding Minister for Ervia. Ervia manages national gas infrastructure through its subsidiary, Gas Networks Ireland, GNI. As a consequence of that, the Department of Housing, Local Government and Heritage has a remit in respect of the governance of Ervia.

In 2020, the Government decided that having two separate State companies to operate the gas network and develop water services provides the optimal solution to meet the future challenges of decarbonising our energy supply and modernising our water services. Therefore, the Water Services (Amendment) Act 2022 was prepared and was signed into law on 7 December 2022. On the date appointed in the Act, 1 January 2023, Uisce Éireann was split from the Ervia group and became a stand-alone company. The Government decided that the most appropriate structure of the remaining gas utility business following the separation of Uisce Éireann from Ervia was the integration of Ervia into Gas Networks Ireland so as to become the single entity, Gas Networks Ireland. The Government's decision to integrate Ervia into Gas Networks Ireland is being led by the Minister for the Environment, Climate and Communications, who has responsibility for gas legislation.

Before outlining the provisions of the Bill, I would like to speak on a number of key points relating to it. Ervia's business, in terms of both revenue and activities, is predominantly the operation, maintenance and development of the gas networks and interconnectors that are in its ownership. Ervia and Gas Networks Ireland are currently operating as a single entity from a structure, strategy and operational point of view. Ervia was established as a statutory corporation pursuant to the Gas Act 1976, as amended, and its subsidiary, Gas Networks Ireland, was established as a company under the Companies Acts with its own constitution pursuant to the Gas Regulation Act 2013. Ervia is fully State-owned and is the sole owner of Gas Networks Ireland.

It is also relevant to note that the EU is currently in the process of agreeing legislation on the hydrogen and decarbonised gas market legislative package, namely, the European natural gas directive, Directive 2009/73/EC. This will provide for a further consideration of the functions of GNI regarding the decarbonisation of the gas network. The functions of GNI in this legislation reflect the current activities it engages in, and any changes to its function will be addressed in the implementation of the gas package when negotiations have concluded. A priority will be the decarbonisation of the gas network in line with the commitments set out in the climate action plan and programme for Government.

The main provision of the Bill is for the integration of Ervia into Gas Networks Ireland so as to become the single entity Gas Networks Ireland.The Bill provides for amendments to the Gas Acts so as to facilitate the integration and transfer of functions, assets, rights, liabilities, staff and records from Ervia to GNI as well as providing for the corporate governance arrangements relating to Gas Networks Ireland in terms of shareholding arrangements, the board arrangements and its chief executive, annual reporting and accounting provisions. These governance arrangements are being provided in primary legislation rather than in constitutional documents, which will enhance transparency and accountability.

I will elaborate on the Bill’s provisions. It is a relatively short Bill, with 21 heads in total, and is largely technical in nature. It is divided into two Parts. Part 1 provides for the Title to the Bill, the Bill's commencement and the definitions used in the Bill as well as the saver provision to maintain the existing ministerial consents that were given to Ervia to carry out telecommunications-related activities. Part 2 lists the provisions for the dissolution of Ervia and the integration of its functions, roles, responsibilities and liabilities into GNI. Part 2 also includes the chapters of the Bill that concern the amendment of other enactments to facilitate the dissolution of Ervia and the integration of its functions, properties, liabilities, staff and records into GNI.

The Bill's 22 chapters can be summarised as follows. Part 1 contains chapters 1 to 5. These are standard provisions that provide for the Short Title to the Bill and the commencement on enactment by means of ministerial order, as appropriate, of its various provisions, as well as definitions of certain terms referred to in the Bill and the saver provision to maintain the existing ministerial consents that were given to Ervia to carry out telecommunications-related activities. Such ministerial consents were previously granted under section 17 of the Gas (Amendment) Act 2000. That section is now being repealed by section 3(2) of this Bill because its scope is considered too broad. The inclusion of a saver is necessary to ensure that the consents previously granted under section 17 remain in place for Ervia and this telecommunications-related work can continue post integration into Gas Networks Ireland.

Part 2 contains the rest of the chapters, which provide for the integration of Ervia into GNI.

Chapter 6 establishes a transfer date, which will be set by the Minister by way of an order.

Chapter 7 provides for the cancellation of Ervia’s shareholding in GNI and for the issuing of new shares to relevant Ministers.

Chapter 8 provides for the issuing of new shares to the majority-shareholding Minister, namely, the Minister for the Environment, Climate and Communications, and the Minister for public expenditure and reform in the same proportions as shares of Ervia are currently held, that is, 90% of the new shares will be held by the majority-shareholding Minister and 5% by each of the other Ministers. Only the Ministers will hold all the rights associated with those shares, thereby providing that Gas Networks Ireland will be entirely publicly owned. This approach reflects the position in other State-owned bodies where the shares are held by Ministers.

Chapter 9 provides for the restatement of the definition of the majority-shareholding Minister, who is currently for Ervia, and will be for GNI, the Minister for Housing, Local Government and Heritage.

Chapter 10 sets out that the Minister for the Environment, Climate and Communications and the Minister for Public Expenditure, National Development Plan Delivery and Reform shall not directly or indirectly exercise control over Gas Networks Ireland in carrying out its functions or entitle them to appoint a member of the board of GNI or to exercise voting rights.

Chapters 11 to 15 cover the transfer of the existing functions, responsibilities, liabilities, assets and so on from Ervia to GNI. This includes the transfer of all functions concerning gas that are statutorily vested in Ervia to GNI, the transfer of land and any other property of Ervia to GNI, and the transfer of rights and liabilities of Ervia resulting from any contract or commitment Ervia has entered into to GNI, including all contracts or commitments involving Ervia. Furthermore, it provides for liability for loss occurring before the transfer date and ensures that GNI will assume any liability outstanding from Ervia.

Chapters 16 and 17 provide for the transfer of staff from Ervia to GNI and any records held by Ervia to GNI.

Chapter 18 provides that the final accounts and final annual report of Ervia can be prepared and progressed by GNI on Ervia's behalf. Further provision is included to enable GNI to carry out, after the transfer date, administrative tasks associated with the dissolution of Ervia.

Chapters 19 and 20 provide for amendments to the Gas Act 1976 to update terminology to reflect the integration of Ervia into GNI. Chapter 21 provides for a variety of miscellaneous amendments to the 1976 Act.

Chapter 19 provides for amendments relating to the board and constitution of GNI and the preparation of annual reports and financial statements.

Chapter 20 provides for amendments relating to the board and constitution of Ervia. The proposed amendments involve the repeal of Schedule 1 of the 1976 Act, the substitution of sections 6 and 7 of the Gas Regulation Act 2013 and a number of other minor amendments to the 2013 Act. These sections deal with directors of GNI and are being substituted to reflect the revised board structures that will be in place following the integration of Ervia. Schedule 1 of the 1976 Act is being repealed.Schedule 1 was originally drafted for the Irish Gas Board, Bord Gáis Éireann, which did not have a constitution, unlike GNI, which is registered as a designated activity company, DAC, under the Companies Acts. The Schedule of the 1976 Act is being repealed to eliminate duplication of the matters that are dealt with by either the GNI constitution or the Companies Act 2014. The revised section 6 reflects that GNI has a constitution under the Companies Act.

Chapter 22 provides for the consequential amendment to the Freedom of Information Act, which is being amended to remove Ervia as an exempt body. Gas Networks Ireland is already subject to this Act. I commend the Bill to the House and look forward to the debate.