Commission for Energy Regulation

The Commission for Energy Regulation-An Coimisiún um Rialáil Fuinnimh (CER) is Ireland's independent energy regulator. The CER has a wide range of economic, customer protection and safety responsibilities in energy. At a high-level, the CER's overall mission, acting in the interests of consumers, is to ensure that:

• the lights stay on,

• the gas continues to flow,

• the prices charged are fair and reasonable,

• the environment is protected, and

• energy is supplied safely.

The aim of the CER’s economic role is to protect the interests of energy customers, maintain security of supply, and to promote competition covering the generation and supply of electricity and supply of natural gas. As part of its role,the CER jointly regulates the all-island wholesale Single Electricity Market (SEM) with its counterpart in Northern Ireland, the Utility Regulator. The SEM is governed by a decision-making body known as the SEM Committee, consisting of the CER, the Utility Regulator and an independent member

The CER has an important related function in customer protection by resolving complaints that customers have with energy companies.

In energy safety, the core focus of the CER is to protect lives and property across a range of areas in the energy sector. This includes safety regulation of electrical contractors, gas and Liquefied Petroleum Gas (LPG) installers and gas pipelines. In addition the CER is the safety regulator of upstream petroleum safety extraction and exploration activities, including off-shore gas and oil.

The CER is the economic regulator of the Irish public water and wastewater sector. This was anticipated to commence formally towards the end of 2013.

Electricity Regulation

Generation

The CER licenses and monitors electricity generators.

Please see information on the wholesale/generation Single Electricity Market (SEM) in the next section.

Transmission Network

Generally the high voltage lines deliver electricity from Ireland's generation sources to the transformer stations, where the electricity voltage is reduced and taken onwards through the distribution system to individual customers' premises. There are also about 18 very large commercial customers directly connected to the transmission system.

EirGrid is the independent state-owned body licensed by the CER to act as transmission system operator (TSO) and is responsible for the operation, development and maintenance of the system. The TSO also offers terms and levies charges to market participants for the connection to and use of the transmission system, which are regulated by the CER. ESB Networks is licensed by the CER as the owner of the transmission system and is responsible for carrying out the maintenance and construction of the system.

The CER sets the allowed revenue/tariffs for the transmission business and approves the connection policy for generators and suppliers connecting to and/or using the network.

Distribution Network

The Distribution Network is the medium and low voltage electricity network used to deliver electricity to connection points such as houses, offices, shops, and street lights. The Distribution Network includes all overhead electricity lines, poles and underground cables used to bring power to Ireland’s customers.

ESB Networks (a ring fenced subsidiary within the ESB Group) is the Distribution System Operator licensed by the CER, responsible for the building, maintaining and operating the distribution network infrastructure. The Distribution Network is owned by ESB, the licensed Distribution Asset Owner.

The CER sets the allowed revenue/tariffs for the distribution business and approves the connection policy for generators and suppliers connecting to and/or using the network.

Supply

The CER licenses and monitors electricity suppliers.

The CER has overseen the gradual liberalisation of the electricity supply market which culminated in full market opening in February 2005. The regulatory framework created the right environment for competition to develop and since then competition has increased in the business and domestic markets. As a result, in 2010 the CER published its Roadmap to Deregulation, which set out the milestones for the end of price regulation. All business markets were deregulated from 1 October 2010. Since April 2011 the domestic market has been deregulated, so all electricity suppliers may set their own tariffs without price regulation from the CER.

Single Electricity Market

Since 1 November 2007 the Commission for Energy Regulation (CER) and Utility Regulator, together referred to as the Regulatory Authorities or RAs, have jointly regulated the all-Island wholesale electricity market known as the Single Electricity Market (SEM). The SEM covers both Northern Ireland and the Republic of Ireland.

The decision-making body which governs the market is the SEM Committee, consisting of the CER, the Utility Regulator as well as an independent member (who also has a deputy), with each entity having one vote.

The detailed rules of the SEM are set out in the Trading and Settlement Code, which is overseen by the SEM Committee.

At a high level, the SEM includes a centralised gross pool (or spot) market which, given its mandatory nature for key generators and suppliers, is fully liquid. In this pool electricity is bought and sold through a market clearing mechanism, whereby generators bid in the Short Run Marginal Cost (SRMC) and receive the System Marginal Price (SMP) for each trading period for their scheduled market quantities. Generators also receive separate payments for the provision of available generation capacity through a capacity payment mechanism, and constraint payments for differences between the market schedule and the system dispatch. Suppliers purchasing energy from the pool pay the SMP for each trading period along with capacity costs and system charges.

For further information on SEM please see www.allislandproject.org.

Natural Gas

There are two types of gas pipelines operating around the country. The larger pipes which transport gas long distances are known as transmission pipes and the smaller pipes which bring gas from the transmission pipes to individual premises are known as distribution pipes. Bord Gáis Éireann (BGE) owns the transmission and distribution systems in the Republic of Ireland

Bord Gáis Networks (BGN) is the designated subsidiary within Bord Gáis Éireann which constructs and extends the natural gas network in Ireland to the highest safety standards. Gaslink is currently the TSO and DSO for gas.

The CER sets the allowed revenue/tariffs and connection policy for the gas transmission and distribution network (similar to electricity).

The CER licenses and monitors gas suppliers. Since 1 July 2007 Ireland's retail gas market has been open to competition and all gas customers are eligible to switch their gas supplier. This represents over half a million domestic customers. Increased competition in the natural gas market can potentially offer a number of important benefits to consumers, including increased choice, greater efficiency, lower prices and higher standards of service.

Competition has developed successfully in the business end of the market, and more recently in the domestic market. The CER continues to regulate the revenue earned and tariffs charged by Bord Gáis Energy Supply to domestic customers.

Customer Care

The CER has an important function in customer protection by resolving complaints that customers have with energy companies.

For further information on the CER's role in this area please see www.energycustomers.ie

Energy Safety

The CER has a dedicated Energy Safety division responsible for the safety regulation of natural gas supply, transmission, distribution, storage and use of gas, the registration of electrical contractors and gas installers by designated bodies, and the regulation of designated upstream petroleum activities.

Specifically, the Electricity Regulation Act, 1999, as amended by various pieces of legislation, gives the CER responsibilities in the areas of electrical, gas and petroleum safety. This includes the following functions:

• Regulate the activities of electrical contractors with respect to safety

• Regulate the activities of natural gas undertakings and LPG safety licence holders with respect to safety

• Regulate the activities of natural gas and LPG installers with respect to safety

• Promote the safety of natural gas and LPG customers and the public generally regarding the safe use of gas

• Establish and implement a natural gas and LPG safety regulatory framework

• Regulate the activities of petroleum undertakings with respect to safety through the establishment of a Petroleum Safety Framework.

Water Regulation

The CER is the independent economic regulator for public water and wastewater services in Ireland. In the consultation process leading up to the introduction of water charges in Ireland, the CER has proposed that Irish Water provide two products and one service, with each household receiving a maximum of one product (either "Water" or "Not for Human Consumption Water") at a time. It is proposed that the wastewater service be charged per unit product consumed.

See also

• Energy law
• World Forum on Energy Regulation

References

• Commission for Energy Regulation
• Energy Customers Information website (Gas & Electricity Supply Providers-Residential & Business)
• EirGrid operates the electricity transmission system
• ESB Networks operates the electricity distribution system
• Gaslink operates the gas transmission and distribution system
• The All-Island Project for the Island of Ireland for Energy Regulation. The All Island Project is a joint initiative run by the Commission for Energy Regulation (CER) & the Northern Ireland Authority for Utility Regulation (Utility Regulator)].