Memorandum of Understanding on All-Island Common Arrangements for Gas by Energy Regulators


Energy Minister Eamon Ryan TD has welcomed the publication of a Memorandum of Understanding (MoU) by the Energy Regulators, North and South - the Commission for Energy Regulation (CER) and its Northern counterpart, the Northern Ireland Authority for Utility Regulation (NIAUR) - to work together to consider the merits of establishing common arrangements for gas on the island.

This initiative by both Regulatory Authorities has the potential to lead to positive benefits for gas consumers - North and South - if analysis by the Regulators proves there are significant benefits to be achieved in establishing common gas arrangements and has the potential to build on previous successes gained from collaborative approaches on energy matters, including the roll-out of the Single Electricity Market last year” - the Minister said.

The MoU commits both Regulators to work to consider the merits of establishing common arrangements for gas, whereby all stakeholders can buy, sell, transport, operate, develop and plan the natural gas market - north and south of the border - effectively on an all-island basis.

If such arrangements were to be established, the aim is that variations in the price and conditions on which gas is bought and sold will be determined by market conditions and economics - not by variations in regulatory arrangements. The MoU also commits both Regulators to considering a joint approach to Security of Gas Supply, having regard to the heavy dependence of the consumers on gas imports from the UK market.

Since 1st July 2007, the domestic gas market has been open to potential new competitors. This will, over time, encourage competitors into the open retail gas market. The possibility of enlarging the gas market through creating mutually beneficial - and economically sound - common arrangements for the island of Ireland is aimed at stimulating competition by encouraging new firms to enter the larger market.

Increased competition in the natural gas market will, potentially, offer a number of important benefits to consumers - including increased choice, greater efficiency, lower prices and higher standards of service. It will also position the island’s gas market to better integrate with the UK regional market as a whole.

“This initiative follows-on from discussions with Minister Nigel Dodds MP in November of last year, when we agreed to work collaboratively on assessing the potential economic benefits of developing common arrangements for gas. Over the coming months, we will be keeping a close eye on developments from the perspective of the emerging economic and social benefits to consumers - North and South.

"The preliminary results of cost benefit analysis work are positive and I am hopeful that, subject to a positive full economic assessment of benefits from the Regulators, consumers on both sides of the border may benefit significantly from any agreed future common gas arrangements" - concluded Minister Ryan.