Maureen O'Sullivan (Dublin Central, Independent)
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Question 160: To ask the Minister for Communications, Energy and Natural Resources the legal price by which a landlord can sell electricity to a tenant per watt; and if he will make a statement on the matter. [17350/12]

Pat Rabbitte (Dublin South West, Labour)
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I do not have a statutory function in the setting of energy prices, whether in the regulated or unregulated market. Responsibility for the regulation of the electricity and gas markets is a matter for the Commission for Energy Regulation (CER), which is an independent statutory body. Prices in the retail electricity market are now fully deregulated from 4th April 2011 and are wholly a commercial and operational matter for suppliers.

The CER has the statutory function to licence the supply of electricity pursuant to Section 14 of the Electricity Regulation Act 1999. Supply is defined in the Electricity Regulation Act 1999 as "supply, in relation to electricity means supply through electric lines to final customers for consumption". Supply is further defined in Regulation 2 of European Communities (Internal Market in Electricity) Regulations 2005 as "the sale, including resale, of electricity to consumers."

Where a supplier of electricity does not hold a supply licence, the European Communities (Internal Market in Electricity) Regulations 2000 provides that it is an offence to supply electricity without being duly authorised to do so. This provision provides that the supply of electricity without a licence is a summary offence summary proceedings for which may be brought and prosecuted by the Commission for Energy Regulation. The penalty is a fine up to €1,500 and/or imprisonment for up to 12 months.

Electricity customers can choose to pay their bills for electricity supplied to them and they consume in a number of ways. In most cases the electricity customer enters into a supply contract directly with a licensed supplier. In a landlord and tenant relationship, various contractual arrangements exist to practically manage the supply of electricity to the tenant and payment for same.

While it is impossible to cover every private arrangement between landlords and tenants, the CER has considered the legal implications, if any, of different situations brought to its attention to date. Each case brought to the Commission's attention will be considered on its own merits. The most common arrangements are set out as follows.

The Commission recognises that in some cases it may be agreed between the landlord and the tenant that the rental charged by the landlord will be inclusive of electricity bills. In this case, it is between the landlord and the tenant as to the inclusive figure agreed. The Commission does not view "all inclusive" rental agreements of this nature to constitute the supply of electricity.

Where the rent paid by the tenant is exclusive of utility bills but the landlord agrees that he or she will pay the bills on behalf of the tenant for convenience (for example in situations where it is a relatively short term let in order to avoid over-payment or under-payment by the tenant) then the landlord can re-charge the amount attributable to the tenant's stay to the tenant. In this instance the landlord is merely acting as an agent for the tenant for the purchase of electricity rather than as a supplier of electricity.

Another arrangement can be where the electricity is supplied by the landlord. In this situation, where the tenant obtains electricity from the landlord either through a payment meter installed by the landlord (such as a pre-payment meter or a meter which is not an official ESB Networks meter (Distribution Systems Operator) or by the imposition of charges that are unrelated to the charges paid by the landlord to the electricity company then the Commission is of the view this constitutes the sale of electricity, which is a licensed activity under the Electricity Regulation Act 1999. As highlighted above, the European Communities (Internal Market in Electricity) Regulations 2000 provides that it is an offence to supply electricity without being duly authorised to do so.

In this context it is also important to note the provisions of the Energy (Miscellaneous Provisions) Act 2012. The 2012 Act amends the provisions of the Energy (Miscellaneous Provisions) Act 1995 regarding the theft of electricity and gas to reflect the current structure and regulation of the energy sector.

Section 5 of the Energy (Miscellaneous Provisions) Act 2012 creates the offence of manufacturing, importing, selling, offering for sale, supplying, installing or causing to be installed or having in possession any thing designed or adapted, without lawful excuse, inter alia, for the purpose of imposing charges on persons for the use of electricity or gas in the absence of a contract of supply or a deemed contract being in place which allows for such charges. A person who commits an offence is liable on summary conviction to a Class A fine or for imprisonment for a term not exceeding 6 months or to both, or on conviction on indictment to a fine not exceeding €150,000 or to imprisonment for a term not exceeding 5 years or both.

This section has yet to come into operation, subject to finalisation of a Commencement Order by the Office of the Attorney General. I expect to be in a position to bring the provision into operation in the coming weeks. The distribution or transmission system operators are empowered to take summary proceedings for such an offence.