Michael Healy-Rae (Kerry South, Independent)
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624. To ask the Minister for Communications, Energy and Natural Resources the way the ESB can stand over the ever increasing costs of energy to hard pressed householders at a time when they made a profit of €415 million and they continue to raise their prices by a further 8%; and if he will make a statement on the matter. [13914/14]

Pat Rabbitte (Dublin South West, Labour)
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Responsibility for the regulation of the retail electricity market is a matter for the Commission for Energy Regulation (CER), which is an independent statutory body. I have no statutory function in the setting of gas or electricity prices, whether in the regulated or non-regulated parts of these markets. Since 4 April 2011, prices in the electricity retail market have been fully deregulated and business and domestic customers may avail of competitive offerings from a number of electricity supply companies. Price setting by ESB's Electric Ireland and all other electricity suppliers is a commercial and operational matter for those companies operating in that retail market. Electricity and gas costs in Ireland are influenced by various drivers, including global gas and oil prices, the costs of capital, exchange rate fluctuations, and the small size of the Irish market. The wholesale price of gas is the most significant factor in the case of Ireland for electricity and gas. This has risen steadily since 2009 driven by events such as those in the Middle East, North Africa and Japan.

ESB’s profit after tax and before exceptional items was €415m in 2013. This was an increase on the previous year due to a number of factors including payroll savings of €51m and a higher energy margin of €60m, of which two thirds relates to the regulated network business.

In October 2013, ESB announced a price increase from 1 January 2014 by Electric Ireland in order to absorb the additional costs arising from higher fuel and network charges. The increase was also intended to absorb the cost of the increase in the Public Service Obligation (PSO) levy which was approved by the CER to take effect from 1 October 2013. ESB stated at the time of its announcement that the company was conscious of the cost pressures being faced by its customers and the aim was to keep increases to customers as low as possible for as long as possible. However, costs are increasing due to factors outside Electric Ireland’s control.

It is worth noting that ESB paid an interim dividend of €68.4m to the State in addition to a special dividend of €161m in January 2014 out of proceeds from the sale of overseas generation assets in 2013. The Board has recommended a final dividend payment of €28.8m, bringing total dividends for 2013 to €258m and to €1.2billion over the past ten years. I would also highlight that ESB contributes substantially to the Irish economy every year through dividends, investments, taxes and jobs. ESB provides significant employment both directly, with 7,500 employees, and indirectly through contractors and service providers.

Michael Moynihan (Cork North West, Fianna Fail)
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625. To ask the Minister for Communications, Energy and Natural Resources the position regarding the Shannon LNG project; and if he will make a statement on the matter. [13928/14]

Michael Moynihan (Cork North West, Fianna Fail)
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626. To ask the Minister for Communications, Energy and Natural Resources the reason the Shannon LNG project would be subject to a levy for pipelines they would not use; and if he will make a statement on the matter. [13929/14]

Michael Moynihan (Cork North West, Fianna Fail)
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627. To ask the Minister for Communications, Energy and Natural Resources if he has had any discussions with those involved in the Shannon LNG project; and if he will make a statement on the matter. [13930/14]

Pat Rabbitte (Dublin South West, Labour)
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I propose to take Questions No 625 to 627, inclusive, together.

Since 2002, the regulation of the gas market has been the responsibility of the Commission for Energy Regulation (CER), which is independent in the performance of its functions. I have no direct statutory function in relation to liquefied natural gas (LNG) projects, including the Shannon LNG project.

Decisions on the regulatory treatment of the gas interconnectors and tariffing are statutorily matters for the CER under the Gas (Interim) (Regulation) Act 2002. The CER as the independent energy regulator has a remit to protect energy consumers, ensure security of supply and support competitiveness. The CER also has a duty to 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.

I and Government colleagues have consistently been supportive of the proposal by Shannon LNG to construct a LNG terminal near Ballylongford, County Kerry. The LNG facility would bring connectivity for the first time to the global LNG market. The prospect of such a facility is therefore a potentially positive step for the island of Ireland. While neither I nor my Department have any direct role in regard to the project, I have met with principals of the companies proposing to develop the project.

Tariff reform is being driven by the entry of Corrib gas into the system. The rationale for the CER’s high level decision of 29 June 2012 as regards pricing and treatment of the interconnectors is that if the current regime were to persist, and with new sources of gas such as Corrib gas and Shannon LNG, the price of gas would rise significantly for all Irish consumers, regardless of the source of the supply. Given our high dependence on gas for electricity generation this would also give rise to electricity price increases and would negatively impact on Ireland’s competitiveness. Full details of the CER’s rationale for its decision are to be found in the CER Decision Paper of 29 June 2012 (CER/12/087) available from the CER website at .

The CER decision subsequently became the subject of a Judicial Review taken by Shannon LNG. On 11 December 2013, the High Court upheld the CER decision of 29 June 2012 on reform of the gas tariffing regime. I understand that Shannon LNG has appealed the High Court decision to the Supreme Court.

The CER for its part is currently progressing the detail of tariff settlement as envisaged in the June 2012 decision and has recently notified stakeholders of the establishment of a Networks Tariff Liaison Group, which will include a representative from Shannon LNG. It has also advised stakeholders as regards the consultation process and its intention to finalise a Decision over the summer months. Therefore, it is in the interests of all stakeholders, including consumers, that clarity in regard to tariffing arrangements is provided as soon as possible and I would urge all concerned to engage with the CER on this regulatory issue.