P J Sheehan (Cork South West, Fine Gael)
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Question 141: To ask the Minister for Communications, Energy and Natural Resources his views on setting a price ceiling for energy prices instead of the regulator determining a set price; and if he will make a statement on the matter. [37223/08]

Eamon Ryan (Dublin South, Green Party)
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Statutory responsibility for the regulation of electricity and gas prices resides with the independent Commission for Energy Regulation (CER) under the Electricity Regulation Act as amended. I can confirm that the Act is not prescriptive in terms of the methodology to be used by CER in its regulation of charges by ESB Customer Supply and BGE Supply. The legislation does not, by definition, preclude the maximum tariff approach. The Act does require CER, in examining the proposed tariffs to examine the costs underlying the proposals. The necessity for regulated energy prices to be cost reflective is therefore built in to the process.

As CER itself has noted, there are a number of economic arguments for and against applying the maximum tariff, or price ceiling, approach at particular stages of market development. I am of the view that the price ceiling approach could be kept under review by CER in light of developments in other EU markets and in particular as we see more competition develop in the retail energy market with the welcome entry of new players both domestic and international. I do not, however, give directions to CER in these matters.