S.I. No. 177 of 2004

Gas (Amendment) Act 1987 (Section 2A) Regulations 2004

Published by the Stationery Office, Dublin

S.I. No. 177 of 2004

GAS (AMENDMENT) ACT 1987 (SECTION 2A) REGULATIONS 2004

ARRANGEMENT OF REGULATIONS

Regulation

S.I. No 177 of 2004

GAS (AMENDMENT) ACT 1987 (SECTION 2A) REGULATIONS 2004

The Commission for Energy Regulation, considering it appropriate to conduct a competitive process for the purpose of selecting an applicant in respect of whom an order under subsection (1) of section 2 of the Gas (Amendment) Act 1987 ( No. 9 of 1987 ) may be made, hereby, in exercise of the powers conferred on it by subsection (2) of section 2A of said Act, makes the following Regulations:

1.    These Regulations may be cited as the Gas (Amendment) Act 1987 (Section 2A) Regulations 2004.

2.    These Regulations shall come into operation on the 23rd day of April 2004.

3.    In this Order, unless the context otherwise requires-

“the Act of 1976” means the Gas Act 1976 (No. 30 of 1976);

“the Act of 1987” means the Gas (Amendment) Act 1987 (No. 9 of 1987);

“the Act of 2002” means the Gas (Interim) (Regulation) Act 2002 (No. 10 of 2002);

“Applicant” means a person who has made an Application;

“Application” means a valid application made pursuant to Regulation 5 of these Regulations which has not been eliminated or rejected in accordance with the Competitive Process;

“Commission” means the Commission for Energy Regulation;

“Competitive Process” means the competitive process provided for in these Regulations;

“functions” includes powers, duties, rights and obligations and references to the performance of functions include, as respects powers, duties, rights and obligations, references to the exercise of the powers and rights and the carrying out of the duties and obligations;

“Order” means the supply order described in Regulation 4(2) of these Regulations;

“Preferred Applicant” means an Applicant that has submitted an Application which is selected by the Commission as a result of the Application evaluation process described in Regulation 6 of these Regulations;

“Price” means in respect of an Applicant the annual price of gas for an average customer of a type determined by the Commission which price shall be calculated by the Commission in such manner as the Commission may determine based on a tariff offered by the Applicant in its Application and shall be deemed to have been submitted by the Applicant;

“relevant areas” means the areas set out in the Schedule to these Regulations;

“Successful Applicant” means a Preferred Applicant that has satisfied any terms and conditions imposed pursuant to Regulation 8 of these Regulations; and

“supply order” means an order pursuant to subsection (1) of section 2 of the Act of 1987 conferring functions in relation to the supply and sale of natural gas.

4.   (1)       The Commission may, in accordance with these Regulations, select an Applicant in respect of whom the Order may be made.

(2)  The Order will confer such functions as the Commission may determine in relation to the supply and sale of natural gas in respect of each of the areas specified in the Schedule to these Regulations.

(3)  Where the Commission considers that no Applicant is suitable, the Commission shall not be obliged to select an Applicant for the purposes set out above.

5.   (1)       A person who wishes to participate in the competitive process provided for in these Regulations shall make an application in that behalf to the Commission.

(2)  Such an application shall be in such form, contain such particulars confirmations and declarations and be made to the Commission before such date and be subject to such terms and conditions, as the Commission determines.

(3)  The making of such an application shall be accompanied by the payment by the person making the application to the Commission of a fee of €5,000.

(4)  The person making the application shall provide such information as the Commission may reasonably require and requests such person to provide to it for the purpose of its deciding whom should be selected.

6.      (1)    An Applicant must satisfy the following criteria:

(a)       it must have registered an expression of interest by 14 November 2003 in response to the notice posted by the Commission on its web-site on 30 October 2003 requesting parties interested in participating in a competitive process for the Order to submit an expression of interest;

(b)       it must hold a valid licence to supply natural gas issued to the Applicant by the Commission under section 16(1)(a) of the Act of 2002 or have applied for such a licence and be granted such a licence within the time period referred to in Regulation 8(1); and

(c)       it must be able to demonstrate to the Commission that it is suitable, that is to say it has the financial (including commercial), regulatory and technical competencies considered necessary by the Commission to undertake functions under the Order.

(2)     The Commission shall rank in order of Price those Applicants who satisfy the criteria in subparagraphs (a) (b), and (c) of paragraph (1) of this Regulation 6, so that the Applicant that submits the lowest Price shall be ranked first, the Applicant that submits the next lowest Price shall be ranked second and so on.

(3)     Subject to paragraphs (4) -- (6) of this Regulation 6 the Applicant who satisfies the criteria in subparagraphs (a) (b), and (c) of paragraph (1) of this Regulation 6 and who is ranked first in terms of Price shall be selected as a Preferred Applicant.

(4)     Where two or more Applicants, who satisfy the criteria in subparagraphs (a) (b), and (c) of paragraph (1) of this Regulation 6, submit an equal Price and that Price is the lowest Price when ranked in accordance with paragraph (2) of this Regulation 6, the Commission shall request these Applicants to resubmit the portion of their Applications relating to Price within a period determined by the Commission and the process set out in paragraphs (2) and (3) of Regulation 6 shall be carried out again in respect of these Applicants, provided that:

(a)    no such Applicant shall be permitted to resubmit a higher Price than that first submitted by it; and

(b)    if after the process set out in paragraphs (2) and (3) has been carried out again, two or more of the relevant Applicants submit an equal Price and that Price is the lowest Price when ranked in accordance with paragraph (2) of this Regulation 6, the Commission may draw lots for the purposes of selecting a Preferred Applicant.

(5)     Where the Commission considers that any Applicant ranked first in terms of Price is not suitable for stated reasons, the Commission may select the next ranked Applicant as the Preferred Applicant.

(6)     The Price submitted by an Applicant must be less than or equal to any benchmark price set by the Commission and if it is not, the Applicant will be eliminated from the Competition.

7.     (1) As soon as may be after it has made a selection under Regulation 6, the Commission shall notify each of the Applicants as to whether it has been selected as a Preferred Applicant or not. The Applications of Applicants other than the Preferred Applicant will remain open until the earlier of notification that a Successful Applicant has been identified and the date which is 3 months after the latest date for submission of applications, as determined by the Commission.

(2) The Applicant selected as a Preferred Applicant shall within 3 days of his or her being notified under this Regulation 7 that it has been selected as a Preferred Applicant, furnish to the Commission an acknowledgement in writing by it of that fact.

8.     (1)     The Order shall be made in respect of a Preferred Applicant subject to its having furnished the acknowledgement referred to in Regulation 7(2) and having entered into, within such time period as the Commission may determine, an agreement with the Commission containing such terms and conditions (including such undertakings made in its Application on the part of the Preferred Applicant) as the Commission may determine in relation to the carrying out of the functions under the Order and subject to the terms and conditions of the Order.

(2)     In the event that a Preferred Applicant fails to comply with any or all of the conditions set out in paragraph (1) of this Regulation 8, the Commission may select the next ranked Applicant as a Preferred Applicant subject to Regulation 6(4), (5) and (6) and, if the Commission does so, the process set out in Regulation 7 and this Regulation 8 shall be carried out again in respect of that Preferred Applicant.

9.     (1)     Where there is a material breach of the agreement referred to in Regulation 8 of these Regulations or of the Order, the Commission will notify the Successful Applicant of the breach and the Successful Applicant shall take such necessary actions, including such actions as may be specified by the Commission, to remedy the breach within a period specified by the Commission

(2)     Without prejudice to the powers of the Commission under Section 2(7) of the Act of 1987 where the Successful Applicant does not agree that such a material breach has occurred or where the Commission considers that the Successful Applicant has failed to take such actions as are necessary to remedy the breach within the period allowed by the Commission, the Commission may revoke the Order.

SCHEDULE

Regulation 4(2)

Sealed with the common seal of the Commission for Energy Regulation on the 23^rd day of April 2004.

EXPLANATORY NOTE.

(This note is not part of the Instrument and does not purpose to be a legal interpretation.)

The purpose of these Regulations is to provide for the competitive process which will be conducted by the Commission for the purposes of selecting an applicant for an order made pursuant to section 2(1) of the Gas (Amendment) Act 1987 for the supply of natural gas to the areas set out in the Schedule to the Order.