Energy regulator gives green light to €1.55bn investment in gas

THE Commission for Energy Regulation (CER) has given its backing to a €1.55 billion investment in the natural gas network which will see the full opening of the gas market to competition and connection of 150,000 new customers to the network over the next five years.

The good news for gas customers is that the proposals will also mean a significant reduction in their bills because the CER is predicting an 11% reduction in transmission tariffs and a 1% reduction in distribution tariffs.

Those tariffs together account for a third of the final bill to the customer.

“In total, Bord Gáis Networks proposed to spend over €1.75bn investing in and operating Ireland’s gas transmission and distribution networks over the next five years. CER’s review of BGN’s proposal led to a reduction in these costs of over €200m down to €1.55bn,” a CER spokesman said.

The proposals will mean:

The gas supply market will fully open to competition.

The gas network will expand to include additional towns along the route of the Mayo-Corrib pipeline, while potentially extra towns will be added in other parts of the network.

The Corrib gas field is expected to commence delivery of gas, significantly increasing the volume of indigenous gas in the Irish system and reducing reliance on imports.

The first Irish Liquefied Natural Gas (LNG) terminal could become operational during the term of this review.

Infrastructure links with Northern Ireland will be significantly strengthened through the South–North pipeline.

It will also mean the connection of 150,000 new gas customers, the addition of 1,500km of mains to the network and the implementation of a metering strategy to improve meter data quality and customer billing.

“The stable development of the gas market in Ireland is a cornerstone of securing future economic development,” the CER spokesman said. “46.2% of our electricity was generated from natural gas in 2006, with approximately 570,000 homes connected to gas and 20,000 businesses using gas in 2006. The CER’s proposals will allow for this stable and cost effective development to take place.”

The Commission has allowed four weeks for receipt of comments on these proposals.

Following a review of all comments received, the commission will make its final decision regarding Bord Gáis Networks allowed revenues for the period 2007/08–2011/12. The revenue review period will commence on October 1, 2007 and conclude on September 30, 2012.