NIAER Invites Comments on Proposed Modification of Phoenix Natural Gas’s Licence

10 September 2004

The Northern Ireland Authority for Energy Regulation (hereinafter referred to as “the Authority”) pursuant to Article 14(3) of the Gas (Northern Ireland) Order 1996 (hereinafter referred to as “the Order”) as amended by the The Energy (Northern Ireland) Order 2003 hereby gives notice as follows:

1. The Authority proposes to make modifications to condition 2.7 of and insert a new condition 2.13 in the Licence which was granted under Article 8 of the Order to Phoenix Natural Gas Ltd (hereinafter referred to as the “licensee”). IIt is proposed that the modifications will become effective on 11 October 2004.

2. The reasons and effects of the modifications are as follows:

Reason
One of the difficulties that potential new gas supply companies have faced in trying to enter the Greater Belfast market has been securing capacity on the upstream Premier Transmission pipeline to enable them to deliver gas to the Greater Belfast market. The Premier Transmission Transportation Code requires a commitment to pay for the capacity for at least a year and significant financial security, before any supplier can access capacity. However suppliers find it difficult to sign up to these rules until they capture enough customers.
Since the opening up of supply competition for large Industrial and Commercial customers, the Authority have issued two supply licences to new entrants. However neither has managed to sign up a single customer. As the Authority has a duty to facilitate competition, it has been in discussions with the licensee and Premier Transmission on developing a mechanism where Phoenix distribution will reserve significant upstream capacity on behave of all suppliers in the Greater Belfast market.

Effect
The new licence condition will require Phoenix distribution to ensure that sufficient upstream capacity has been reserved to service all firm customers in Greater Belfast. It will also require Phoenix distribution to consult with any gas supplier and the Authority on the estimate of peak daily firm demand. Phoenix Distribution will be responsible for the payment of the postalisation capacity charge and will recover this through its distribution charges. The payment of postalisation commodity charges will remain the responsibility of each supplier. Suppliers will access the upstream capacity by nominating their required daily demand to Premier Transmission on an interruptible basis.

3. A copy of the proposed modification can be obtained free of charge from Mr Eamon Corrigan at OFREG, Brookmount Buildings, 42 Fountain Street, Belfast, BT1 5EE. (eamon.corrigan@ofregni.gov.uk telephone (028) 9031 1575) Or by linking on THIS LINK

4. Representations or objections with respect to the proposed modification may be made before 8th October 2004 to the Northern reland Authority for Energy Regulation Authority’s Chairman, Douglas McIldoon, at Brookmount Buildings, 42 Fountain Street, Belfast, BT1 5EE.

5. Pursuant to Article 14(4) of the Order the Authority has sent copies of the notice to the licensee and the Department of Enterprise, Trade and Investment.

Notes