Gas Regulation

BGE Functions

Energy (Miscellaneous Provisions) Act 1995 changed the powers and functions of the Bord Gáis Eireann (, the Electricity Supply Board and Bord na Móna. It changed the provisions in relation to

• the operation of gas pipelines and electricity cables
• offshore investigation of energy
• investigation of assets
• licensing and lease undertakings

By order made under the Energy (Miscellaneous Provisions) Act 1995, the assets of certain existing gas companies were vested in Bord Gáis Eireann.

The 2006 Act granted enhanced borrowing powers to Bord Gáis Éireann. The Gas (Amendment) Act 2009 increased the borrowing capacity of BGE to €3 billion to allow it to fund its development programme and plan.

Deregulation

Gas (Amendment) Act 1998 removed the obligation under the Gas Act 1976 by which all natural gas coming onshore in Ireland or within the State is be offered for sale to BGE on reasonable terms. It also removes the requirement for consent of the Minister to the export of gas by BGE.

The Gas (Interim) (Regulation) Act 2002 established the Commission for Energy Regulation (now the Commission for Regulation of Utilities), incorporating the Commission for Electricity Regulation. The Act provided for regulation of the domestic gas market. The regulatory functions of the Minister for Communications Marina natural resources were transmitted to the newly constituted expanded commission.

The regulatory mechanism was similar to that in respect of electricity under the Electricity Regulation Act 1999. The monopoly position of BGE was modified progressively in the same way as that applicable to ESB.

The Energy (Miscellaneous Provisions) Act 2006 expanded the functions of the Commission for Energy Regulations (now the Commission for Regulation of Utilities). The provisions were commenced by The Energy (Miscellaneous Provisions) Act 2006 (Commencement of Certain Provisions) Order 2008.

Legislation provides for the full opening of the natural gas market in accordance with Directive 2003/55/EC. All customers are eligible customers who are free to change natural gas suppliers. A third-party authorised supplier may be granted access to gas pipelines and facilities for this purpose.

The European Communities (Internal Market in Natural Gas) (BGE) (Amendment) Regulations 2008 facilitated the transfer of part of the undertaking of Bord Gáis Eireann to Gaslink.

Consents

The  Gas (Interim) (Regulation) Act 2002 (Criteria for Determination of Applications for Natural Gas Licences) Regulations 2002 (S.I. No. 265 of 2002) provides for the criteria for granting consent for licensing.

Under the Planning and Development (Strategic Infrastructure) Act 2006, no additional permission is required for electricity transmission lines strategic gas infrastructure (in particular gas pipelines for the Corrib gas field)     and State developments which require an environmental impact assessment. Modifications of permission are required for the strategic infrastructure division.

Gas Installers

The 2006 Act regulates gas installers. The Energy (Miscellaneous Provisions) Act 2006 (Commencement of certain Provisions) Order 2008 commenced the provisions. CER (CRU) may appoint a designated body as the safety body with which installers and contractors must register.

They may prescribe standards of training and work in accordance with criteria in the legislation. There is a provision to ensure ongoing responsibility for the maintenance of natural gas fittings. The CER (CRU) may specify classes of works in which certificates of completion are required to specify the requirements in that regard.
European Union (Wholesale Energy Market Integrity and Transparency) Regulations 2014 designate a CER (CRU) as the Irish regulatory body. They also provide for criminal offences for breach of the Regulation.

They confer authorised officers with powers to summon persons to carry out inspections, require data, and require cessation of practices contrary to the regulation. They may apply to the court for freezing or segregation of assets and imposition of prohibitions by way of enforcement. The regulations provide domestic penalties for breaches.

The Electricity Regulation Act 1999 (Gas Works) Regulations 2009 designated certain classes of works covering installation, removal, repair, servicing maintenance of certain natural gas fittings and equipment. Breach of the requirements is an offence which may be prosecuted by CER.

LPG Safety

The Energy (Miscellaneous Provisions) Act 2012 transferred the remaining responsibility for LPG safety to the CER (CRU. It confirms that it is an offence for a person to carry out LPG works unless he is a registered installer with CER (CRU).

The 2012 Act provides that the CER (CRU) regulates LPG undertakings that make LPG available to domestic customers through distribution networks. These are in areas not covered by natural gas. There is a licensing regime administered by CER (CRU). CER (CRU) is also responsible for promoting LPG safely.

Where a natural gas or LPG undertaking is not in compliance with the CER (CRU) safety requirements CER (CRU) may serve an improvement notice and prohibition notice. If there is a danger to life or the safety of infrastructure, an application may be made to the High Court prohibiting the activities of the LPG or gas undertaking until the specified measures are undertaken to remove the risk.

CER (CRU) may make regulations for reporting and investigating LPG incidents involving death or injury or damage to property resulting from abuse and misuse leakage combustion explosion of LPG. CER (CRU)may apply annual levy expenses on holders of LPG safety licences.

Liquefied Petroleum Gas Safety (Liquefied Petroleum Gas Incident) Regulations 2014 made by the CER (CRU) relate to reporting and investigation of incidents with LPG. They define classes of incidents and reporting obligations arising.

Liquefied Petroleum Gas Safety (Liquefied Petroleum Gas Incident Reporting and Investigation) Regulations 2014 require reporting of incidents by LPG undertakings affecting domestic or commercial final users, which must be reported by LPG undertakings. This includes entities which purchase or import LPG or make it available to individual domestic or commercial users by way of cylinder full tank or distribution via pipes network.

Reorganisation of BGE

The Gas Regulation Act 2013 made provision for the possible sale of BGE. This was on the basis of retaining the strategic elements of the gas network in state ownership. The legislation followed the EU IMF ECB agreement for financial support and was designed to reduce the state’s overall indebtedness.

The legislation provides for the creation of a subsidiary of BGE to be a network company. In accordance with EU requirements Directive 2009/73, the network assets are to be ring-fenced. The subsidiary is to be a private company, but certain aspects of its constitution are provided for by the legislation. There was to be a transfer plan by which assets, liabilities, and staff would be transferred from BGE to this network entity.

The legislation provides for the sale of BGE.BGE was purchased by Centrica plc in 2014.

ESB (Electronic Communications Network) Act 2014 changed the name of Bord Gáis Eireann to Ervia after the sale of the company.

Pursuant to the EU directives Directive 2009/73, the Minister, because of their shareholding in other entities which undertake power generation and electricity, could not retain control over the network business. Accordingly, the 2013 Act amended the powers of the Ministers in that regard. BGE was restricted from undertaking an activity relating to energy supply and generation in breach of the EU unbundling requirements.

BGE was designated in 2013 as responsible for the provision of water and wastewater services in Ireland, and Irish Water was established as a subsidiary. BGE was renamed Ervia,

Bord Gais Energy was sold as set out above. Bord Gais networks was rebranded as Gas Networks Ireland. In 2015 Gas Networks Ireland became a subsidiary of Ervia.

Gas Act 1976 (Appointment of majority-shareholding Minister) Order 2015 appointed the  Minister for Environment, Community and Local Government as the majority shareholder in Ervia. CER (CRU) may designate a licence to be the supplier of last resort to supply gas to customers of another supplier in the circumstances specified.

CRU

The Commission for the Regulation of Utilities (Appointed Day) Order 2017 changed the name of the Commission for Energy Regulation. It became the Commission for the Regulation of Utilities (CRU)

The so-called Brexit Omnibus Act granted the CRU additional powers in the context of the United Kingdom leaving the European Union. It may modify licences as necessary to ensure compliance with EU rules in respect of cross-border trade and electricity.

It provided for the regulation by the Commission of Electrical Contractors and Gas Installers in relation to safety. It allowed for the appointment of designated bodies for electrical and gas contractors to undertake regulation.

The designated bodies are to undertake supervisory functions in accordance with the criteria in the legislation. They charge fees which must be approved by CER (CRU. Members of the bodies are designated as registered electrical or gas contractors. There is a provision for an appeal against refusal, suspension, or revocation of registration.

Gas (Amendment) Act 2024

In 2018 the Government decided that Irish Water (Uisce Eireann) should be separated from Ervia and made into a standalone entity. On 20 October 2020 the Government approved the memorandum of the Minister for Housing, Local Government and Heritage, which outlined the plan for the development and drafting of a general scheme to achieve this.

The Government also approved the development and drafting of a general scheme of a separate Act to facilitate the integration of Ervia into Gas Networks Ireland (GNI) and to provide for the roles and functions of the reconstituted entity, GNI. The establishment of two separate State companies, one to operate the gas network, and one to develop our water services, provides the optimal solution to meet the future challenges of decarbonising our energy supply and modernising our water services. With the separation of Uisce Eireann from Ervia on 01 January 2022, the remaining company consists of the holding company Ervia and its single subsidiary GNI.

Following the separation of Uisce Eireann from Ervia, the remaining Ervia/GNI business is predominantly (both in terms of activities and revenue) the operation, maintenance and development of the gas networks and interconnectors that are in its ownership. The effect of this legislation will be to modify the company structures to reflect the new single- business approach in line with the Government decision of October 2020.

The Gas (Amendment) Act 2024 gives effect to the October 2020 Government Decision to facilitate the integration of Ervia into GNI.

Dissolution of Ervia, Transfer of Functions,

The 2024 Act establishes a transfer date which will be set by the Minister, by way of an Order, when all remaining Ervia staff, and all functions and assets formerly vested in Ervia, will be transferred into Gas Networks Ireland. With effect from this date Ervia will also be dissolved. It provides for the cancellation of Ervia’s shareholding in Gas Networks Ireland.

The 2024 Act provides for the issuing of new shares to the majority- shareholding Minister, the Minister for the Environment, Climate and Communications and the Minister for Public Expenditure and Reform in the same proportions as shares of Ervia are currently held (i.e. 90 percent of the new shares will be held by the majority-shareholding Minister and five percent by each of the other Ministers). Only the Ministers will hold all the rights associated with those shares thereby providing that Gas Networks Ireland is publicly owned. This approach reflects the position in other State-owned bodies where the shares are held by the Ministers.

The 2024 Act provides for the restatement of the definition of the majority-shareholding Minister. The Minister for Housing, Local Government and Heritage is the current majority shareholding Minister for Ervia. As Ervia will be dissolved and its functions subsumed into GNI, the Majority Shareholding Minister of Gas Networks Ireland will be the Minister for Housing, Local Government and Heritage in order to maintain the previous structure, while facilitating the dissolution of Eriva. Directive 2009/73/EC of the European Parliament in relation to the unbundling of ownership of generation/supply and transmissions systems in the energy market prevents either the Minister for the Environment, Climate and Communications or the Minister for Public Expenditure and Reform assuming the role of majority-shareholding Minister in Gas Networks Ireland.

The 2024 Act sets out that the Minister for the Environment, Climate and Communications and the Minister for Public Expenditure, National Development Plan Delivery and Reform shall not directly or indirectly exercise control over Gas Networks Ireland in carrying out its functions or entitled to appoint a member of the board of GNI, or to exercise voting rights.

Transfer of Functions

The 2024 Act provides for the transfer of all functions in relation to gas that are statutorily vested in Ervia to Gas Networks Ireland. Additionally, it provides for the transfer of all contracts or commitments involving Ervia to GNI. Provision is also made for the administration and business in connection with the performance of the functions transferred from Ervia on the transfer date.

The 2024 Act provides for continuity consequent upon transfer of functions, assets and liabilities of Ervia to Gas Networks Ireland. Anything related to the transfer of the functions of Ervia which was not completed on the dissolution of Ervia can be carried on or completed by Gas Networks Ireland. Every instrument and document made by Ervia before the dissolution has effect as if it were made by Gas Networks Ireland.

Any reference to Ervia in the memorandum and articles of any company is construed as being a reference to Gas Networks Ireland. On request by Gas Networks Ireland any moneys, stocks, shares and securities that, immediately before the dissolution day, were standing in the name of Ervia will be transferred into the name of Gas Networks Ireland. The Minister may certify whether or not any property, right or liability has vested in Gas Networks Ireland, and his certification is sufficient evidence of the fact unless the contrary is demonstrated.

The 2024 Act provides for the transfer of staff from Ervia to GNI. While many staff may already have transferred by agreement, the remaining staff will transfer under this provision. Staff will have no less favourable terms and conditions of service relating to remuneration than they enjoyed in Ervia before its dissolution. The 2024 Act also provides that a transferred person’s superannuation arrangements will continue in accordance with the existing pension schemes, as applied before the transfer date.

Amendment of other Enactments

The 2024 Act provides for consequential amendments to the Gas Act 1976. The annual report, audit and accountability arrangements for Gas Networks Ireland necessitates amendment to the provisions in the Gas Act 1976. A new non-executive Board of Gas Networks Ireland and its Chief Executive are now being prescribed in primary legislation (i.e. the Gas Regulation Act 2013) rather than in Gas Networks Ireland’s Constitution.

Appointments to the new Board will be made by the Minister for Housing, Local Government and Heritage having consulted with the Minister for Public Expenditure, National Development Plan Delivery and Reform. The existing Chief Executive Officer of Gas Networks Ireland will continue in his role of the company post integration.

Amendment of the Freedom of Information Act

The 2024 Act provides for the consequential amendment to the Freedom of Information Act, which is being amended to remove Ervia as an exempt body; Gas Networks Ireland is already subject to this Act.