Energy Update: New Powers and Name for Ireland’s Energy Regulator
07 June 2017
The Commission for Energy Regulation ("CER") is Ireland’s independent energy regulator. It is responsible for issuing and enforcing licences for the conduct of a number of energy-related activities, including electricity generation and supply.
With the commencement of certain provisions of the Energy Act 2016 in late April 2017, the statutory powers available to the CER in performing these functions have been significantly enhanced. The CER is also on the verge of being renamed as the “Commission for Regulation of Utilities”.
Expanding the arsenal
The CER’s primary tool of energy licence enforcement had previously been its ability to revoke the licence. This method of enforcement could be considered as a “nuclear option”, if that form of generation were not prohibited in Ireland (!). An all-or-nothing penalty can, however, be difficult and counterproductive to invoke.
The CER has therefore been given new powers to impose a financial penalty on a licence-holder (not exceeding 10% of annual turnover). The CER must be reasonably satisfied that improper conduct is occurring or has occurred before imposing a penalty.
The CER can also require a licence-holder to pay a sum not exceeding €50,000 relating to any costs incurred by the CER in investigating a particular matter. Any financial penalty imposed by the CER needs to first be approved by the High Court.
The CER has also been given new powers to appoint inspectors to carry out investigations of licence-holder conduct. The powers allow an inspector to enter and search premises and to require the production of documents.
These enhanced provisions bring the CER’s procedural options into line with those available to other regulators. It will be interesting to see whether the CER uses these powers to engage in the surprise “dawn raids” that are a feature of other regulated sectors. It would be prudent for licence-holders to prepare for such an eventuality, such as by adopting a “dawn raid protocol”. If a licence-holder already maintains a dawn raid protocol, it should ensure that the protocol is broad enough to cover the information that is relevant to their energy licences.
What’s in a name?
The latest set of statutory amendments also empowers the Minister for Communications, Climate Action and Environment to pass an order renaming the CER as the “Commission for Regulation of Utilities”. It is expected that this will be done as soon as the CER has the necessary rebranding arrangements in place.
When it occurs, this rebrand will reflect the recent extension of the CER’s remit to include the regulation of water. It echoes the similar renaming that occurred in 2002 following the granting to the CER of a regulatory role in relation to natural gas.
We have not yet seen the branding that will accompany the new name, but given our affinity with defined acronyms, there is every chance that at least some in the industry will start referring to the Commission as the “CRU”.
For more information on the impact of the Energy Act 2016, please conduct a member of our Energy, Utilities & Projects team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.