John Deasy (Waterford, Fine Gael)
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Question 80: To ask the Minister for Communications, Energy and Natural Resources his views on instructing the energy regulator to set a price ceiling for electricity and gas instead of an absolute price in order to encourage cheaper gas and electricity; and if he will make a statement on the matter. [43687/08]

Eamon Ryan (Dublin South, Green Party)
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The regulation of ESB electricity tariffs and Bord Gáis Éireann (BGÉ) gas tariffs is the statutory responsibility of the Commission for Energy Regulation (CER).

I also note that the CER made the decision to end tariff regulation for large electricity users in September 2006. It concluded that there is a sufficient level of generation capacity in the upper end of the market to allow customers to receive offers of a competitively priced supply of electricity. As a result, the vast majority of large industrial and commercial electricity customers are currently supplied by independent suppliers and companies and are free to negotiate alternative supply offers with the alternative suppliers in the marketplace.

In regard to those areas of the market which remain subject to price regulation, residential and small business customers supplied by the ESB, the legislation is not prescriptive in terms of the methodology to be used by the CER in reaching its decisions. The legislation does not preclude any particular approach. The CER is required to examine the costs underlying the regulated tariffs to ensure they are cost reflective.

I note yesterday's announcement by the CER of its Phase 2 decision on ESB and BGÉ tariffs for 2009, which is reflective of recent softening in international wholesale prices for gas and coal. I also note the substantial rebate being provided by ESB to all electricity customers, which helped mitigate the need for a tariff increase.

The two phase approach to tariff regulation adopted by the CER this year has been prudent in terms of minimising the impact of volatile international fuel prices for energy consumers in Ireland. Flexibility is clearly important in addressing our energy costs, which are a key challenge for the competitiveness of the economy.

I therefore welcome the CER's intention to review tariffs and tariff methodologies next year, in light of global trends in fuel prices and all other relevant factors.