Wednesday, 7 March 2012
Department of Communications, Energy and Natural Resources
Natural Gas Grid
I refer the Deputy to previous replies to Parliamentary Questions on this matter. The decision on the regulatory treatment of the gas interconnectors is statutorily a matter for the Commission for Energy Regulation (CER) under the Gas (Interim) (Regulation) Act 2002. I have no function in the matter. The CER, as the independent energy regulator has a remit to protect energy consumers, ensure security of supply and support competitiveness. In particular it must 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.
There have been requests, from Shannon LNG and others, to me as Minister for Communications, Energy and Natural Resources to issue a policy direction to the CER in accordance with powers of direction as provided under Section 10A of the Electricity Regulation Act 1999. The content of such a policy direction has not been specified by the advocates but it appears the intention is that a Ministerial direction could be used to intervene to influence CER's decision making about the regulatory treatment of the gas interconnectors, in particular with reference to the imposition of a tariff on this project, on the basis that Shannon LNG alleges that the decision is, in their view, set to damage its future business.
The 2002 Act confers specific legislative powers on the CER to regulate and determine the tariffs applicable to the gas transmission system. By law, the CER makes decisions pursuant to these powers independently of the Minister. These laws reflect the policy that determining tariffs is not a matter for the Minister.
Furthermore, Section 10A of the 1999 Act does not provide an adequate legal basis for a direction sought by and for the benefit of a private entity. The section provides that the Minister may only give directions on 'general policy' as opposed to a specific direction in respect of the making of a particular decision by the regulator. Section 10A (6) (c) of the 1999 Act explicitly prohibits the Minister from giving a direction in respect of the performance of the functions of the CER 'in relation to individual energy undertakings or persons'.
I am satisfied that any general policy direction I might make would have to operate in what I consider to be in the overall public interest and could not be framed so as to either assist or hinder a particular stakeholder or otherwise so as to undermine the regulatory system. In the absence of any change in policy in respect of the regulation of gas tariffs, which I do not contemplate, and because of the limitations set out in the governing legislation surrounding the exercise of this power, I do not envisage making a Ministerial policy direction as sought by and on behalf of the company.