S.I. No. 630/2011 - European Communities (Internal Market in Natural Gas and Electricity) Regulations 2011

CONTENTS

Regulation

PART 1 Preliminary and General

1.

2.

3.

PART 2 Separation of Functions of BGÉ and Gaslink and ancillary matters

Chapter 1 Establishment of ITO

4.

5.

6.

7.

8.

Chapter 2 Agreements and transfer plan

9.

10.

11.

12.

13.

14.

15.

16.

Chapter 3 Functions and characteristics of ITO

17.

18.

19.

20.

Chapter 4 Obligations of ITO

21.

22.

23.

24.

25.

PART 3 Transmission System Operators

26.

27.

PART 4 Functions of Commission with respect to BGÉ Corporate and ITO

28.

PART 5 Certification and Designation of Transmission System Operators

29.

30.

31.

PART 6 Enforcement of these Regulations and Certification Regulations

32.

33.

34.

35.

PART 7 Revocations and Consequential Amendments to Natural Gas legislation in respect of ITO

36.

37.

38.

PART 8 Other Repeals and Consequential Amendments to Natural Gas and Electricity Legislation

39.

40.

41.

42.

SCHEDULE 1 Transfer of Assets, Contracts, Rights and Liabilities of BGÉ Corporate

SCHEDULE 2 Transfer of Certain BGÉ Employees

S.I. No. 630 of 2011

EUROPEAN COMMUNITIES (INTERNAL MARKET IN NATURAL GAS AND ELECTRICITY) REGULATIONS 2011

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 9th December, 2011.

I, PAT RABBITTE, Minister for Communications, Energy and Natural Resources, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving effect to Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009¹ , save for Articles 3 and 41(1)(o) and (q) and Annex I thereto, and for the purpose of giving effect to Articles 3(4), 7(2)(j) and (k), 26(3), 35(5), 36 and 37 (except paragraph (1)(n) and (p)) of Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009² , hereby make the following regulations:

PART 1 Preliminary and General

Citation and commencement

• (2) Chapter 3 of Part 2 and Part 7 come into operation on the transfer date.

• (3) Regulation 31 comes into operation on 3 March 2013.

Consent of Minister for Public Expenditure and Reform

Interpretation

“Act of 1999” means Electricity Regulation Act 1999 (No. 23 of 1999);

“Agency” means the Agency for the Cooperation of Energy Regulators established by Regulation (EC) No. 713/2009 of the European Parliament and of the Council of 13 July 2009³ ;

“assets” means any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description (including money), and includes securities, choses in action and documents;

“Bord Gáis Networks” means the networks division of BGÉ and includes BGÉ (UK);

“BGÉ” means Bord Gáis Éireann;

“BGÉ Corporate” means the group comprising BGÉ and any subsidiaries of BGÉ from time to time, other than the ITO and any subsidiaries of the ITO from time to time and any undertaking which the Commission determines from time to time does not form part of the vertically integrated undertaking (for the purposes of the Natural Gas Market Directive) of which BGÉ is a member, and includes any part or parts of and any member or members of that group. References in these Regulations to “BGÉ Corporate” shall, with respect to matters prior to the transfer date, include Gaslink and, with respect to matters from the transfer date, exclude Gaslink;

“BGÉ Group” means BGÉ Corporate and the ITO and any subsidiaries of the ITO from time to time;

“BGÉ Group transportation system” means the transmission systems and distribution systems of the BGÉ Group operated by the ITO or its subsidiaries following the transfer date, including any additions or alterations thereto from time to time;

“BGÉ (UK)” means BGE (UK) Limited, a private limited company incorporated in England and Wales (Registered Number: 02827969);

“board of directors”, in relation to the ITO, means the board of directors of the ITO established or required to be established in accordance with Regulation 8;

“Commission” means Commission for Energy Regulation;

“compliance programme”, in relation to the ITO, means a programme established and implemented or required to be established and implemented in accordance with Regulation 23;

“compliance officer”, in relation to the ITO, means a person appointed or required to be appointed under Regulation 22;

“control” means any rights, contracts or any other means which, either separately or in combination and having regard to the considerations of fact or law involved, confer the possibility of exercising decisive influence on an undertaking, in particular by—

• (a) ownership or the right to use all or part of the assets of an undertaking, or

• (b) rights or contracts which confer decisive influence on the composition, voting or decisions of the organs of an undertaking;

“customers”, in relation to a gas transmission system, means wholesale customers and, where the context so requires, includes final or end customers;

“distribution system”, in relation to natural gas, means a system for the transport of natural gas through local or regional pipelines with a view to its delivery to customers;

“Electricity Market Directive” means Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009²;

“executive management”, in relation to the ITO, means the persons responsible for the management of the day to day activities of the ITO including the management of the transportation system and the activities necessary for the preparation of the ten year network development plan, and whose names and roles from time to time shall be notified in writing to the Commission;

“financial plan” includes any document in the nature of a financial plan, whether called a financial plan or not;

“financial and other assistance” includes the provision of funding, guarantees, indemnities, security, assurances, warranties, representations, covenants, undertakings, information and other co-operation as may be required by BGÉ and participation in cash management arrangements for the BGÉ Group;

“Gaslink” means Gaslink Independent System Operator Limited, a private limited company incorporated in Ireland (Registered Number: 447782), pursuant to Regulation 5 of the Regulations of 2005;

“Gas Acts” means Gas Acts 1976 to 2009;

“general meetings of the ITO” means general meetings as that term is used in the Companies Acts;

“industrial customer” means large industrial and commercial customers with a peak hourly demand greater than 50 Megawatt and a connection pressure of 16 barg or above;

“ITO” means the company established or required to be established by BGÉ under Regulation 4 as an independent transmission system operator and distribution system operator provided that references to the ITO in the context of an agreement entered into under Regulation 9, as varied under Regulation 10 (if so varied), or a transfer plan may as the context requires include any subsidiary of the ITO specified in that agreement or transfer plan;

“liabilities” means any liabilities, debts or obligations (whether present or future and whether vested or contingent);

“LNG’ means liquefied natural gas;

“LNG facility” has the same meaning as in the Natural Gas Market Directive;

“management team”, in relation to the ITO, means the persons directly reporting to executive management on matters related to the operation, maintenance or development of the transportation system and whose names and roles from time to time shall be notified to the Commission;

“Minister” means Minister for Communications, Energy and Natural Resources;

“Natural Gas Market Directive” means Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009¹;

“Natural Gas Market Regulation” means Regulation (EC) 715/2009 of the European Parliament and of the Council of 13 July 2009⁴ ;

“operate” includes maintain and develop;

“ownership”, in relation to an asset, includes proprietary rights arising under a lease, licence or bailment of the asset;

“publish” includes publish on the Internet;

“Regulations of 2005” means European Communities (Internal Market in Natural Gas) (BGÉ) Regulations 2005 ( S.I. No. 760 of 2005 ) as amended by European Communities (Internal Market in Natural Gas) (BGÉ) (Amendment) Regulations 2007 ( S.I. No. 377 of 2007 ) and European Communities (Internal Market in Natural Gas) (BGÉ) (Amendment) Regulations 2008 ( S.I. No. 239 of 2008 );

“rights” means any rights, powers, privileges or immunities (whether present or future and whether vested or contingent);

“subsidiaries” has the same meaning as in section 155 of the Companies Act 1963 (No. 33 of 1963);

“supervisory body”, in relation to the ITO, means the body established or required to be established under Regulation 6;

“ten year network development plan”, in relation to the ITO, means the plan prepared and submitted or required to be prepared and submitted in accordance with Regulation 25;

“transfer date” means the date fixed by the Minister under Regulation 12;

“transfer plan” means the transfer plan or plans required to be prepared by BGÉ and submitted to the Minister in accordance with Regulation 11;

“transferor” means a person from whom any resources, assets, contracts, rights (including licences) or liabilities are transferred under or pursuant to Regulation 13 or 14;

“transferee” means a person to whom any resources, assets, contracts, rights (including licences) or liabilities are transferred under or pursuant to Regulation 13 or 14;

“transmission system”, in relation to natural gas, means a system for the transport of natural gas through a high pressure pipeline, other than an upstream pipeline, with a view to delivering the natural gas to customers;

“transportation system” means such parts of the transmission system and the distribution system owned by BGÉ Corporate as may be designated in the transfer plan prepared in accordance with Regulation 11 and shall, with respect to obligations of the ITO following the transfer date, include any additions or alterations thereto from time to time;

“vertically integrated undertaking” has the same meaning as in the Natural Gas Market Directive.

• (2) A word or expression that is used in these Regulations and is also used in the Natural Gas Market Directive has, unless the context otherwise requires, the same meaning in these Regulations as it has in that Directive.

PART 2 Separation of functions of BGÉ and Gaslink and ancillary matters

Chapter 1 Establishment of ITO

BGÉ to form and register subsidiary company

• (2) The ITO formed under paragraph (1) shall be a private company limited by shares. BGÉ shall be the sole member of the company.

• (3) The member of the ITO shall have such shares in the company formed under paragraph (1) as are specified in the company’s memorandum of association. All of the ITO’s equity share capital shall be held by BGÉ.

• (4) BGÉ shall ensure—

• (a) that the memorandum of association of the ITO specifies that the objects of the ITO shall include responsibility for ownership and operation of the transportation system in a manner consistent with these Regulations,

• (b) that the memorandum of association of the ITO specifies that, without prejudice to the powers of the supervisory body under Regulation 6(2) and subject to Regulation 19(1), the ITO shall have the power to raise money on the capital market, in particular, through borrowing and capital increase, and

• (c) that either the memorandum of association or the articles of association of the ITO prescribes the basis of the relationship between the ITO and BGÉ Corporate and between the ITO and the Minister in a manner consistent with these Regulations, including such that—

• (i) without prejudice to the powers of the supervisory body under Regulation 6(2), the ITO shall have effective decision making rights independent from BGÉ Corporate in respect of the day to day activities in relation to the operation of the transportation system, and

• (ii) subject to Regulation 18(8), BGÉ Corporate may not determine, directly or indirectly, the competitive behaviour of the ITO in relation to its day to day activities including in respect of the management of the transportation system or in relation to activities necessary for the preparation of the ten year network development plan submitted to the Commission pursuant to Regulation 25(1).

• (5) As soon as practical after the ITO is formed, BGÉ shall, subject to the prior approval of the memorandum and articles of association of the ITO by the Minister, have the ITO registered under the Companies Acts.

• (6) In this Regulation, “equity share capital” has the same meaning as in section 155 of the Companies Act 1963 (No. 33 of 1963).

• (7) Nothing in section 8A of the Gas Act 1976 (No. 30 of 1976) applies to any action taken under this Regulation.

• (8) A subsidiary of BGÉ performing functions of production or supply shall not have any direct or indirect shareholding in the ITO.

• (9) The ITO shall not have any direct or indirect shareholding in any subsidiary of BGÉ performing functions of production or supply, or receive dividends or any other financial benefit from such a subsidiary.

• (10) BGÉ and Gaslink shall continue to have their respective functions and powers pursuant to the Regulations of 2005 (and the agreements made thereunder) until the transfer date.

Alteration of memorandum or articles not to have effect until approved by Minister

ITO to have supervisory body

• (2) The supervisory body of the ITO shall be in charge of taking all decisions which may have a significant impact on the value of the assets of the shareholders of the ITO including, in particular, decisions regarding—

• (a) the approval of the annual and longer term financial plans,

• (b) the level of indebtedness of the ITO, and

• (c) the amount of dividends, if any, to be distributed to shareholders.

• (3) Subject to Regulation 18(8), the decisions falling under the remit of the supervisory body shall exclude those that are related to the day to day activities of the ITO including those in respect of the management of the transportation system and decisions in relation to activities necessary for the preparation of the ten year network development plan submitted to the Commission pursuant to Regulation 25(1). The supervisory body and its members shall have no responsibility for any such excluded decisions or activities.

Members of supervisory body of ITO

• (2) Subject to paragraphs (7), (8) and (9), all decisions regarding the appointment and renewal, working conditions (including remuneration) and termination of the term of office of the members of the supervisory body shall be taken by BGÉ in accordance with this Regulation.

• (3) At least half of the members, minus one, of the supervisory body—

• (a) shall not, for a period of 3 years before their appointment, have held any professional position or responsibility, interest or business relationship, directly or indirectly, with BGÉ Corporate,

• (b) shall not, while a member of the supervisory body, have any other professional position or responsibility, interest or business relationship, directly or indirectly, with BGÉ Corporate,

• (c) shall not, while a member of the supervisory body, hold any interest in or receive any financial benefit, directly or indirectly, from BGÉ Corporate,

• (d) after termination of their term of office, shall not, for a period of not less than 4 years from the date of termination, hold any professional position or responsibility, interest or business relationship with BGÉ Corporate, and

• (e) shall have a right of appeal to the Commission for any complaints by them against premature termination of their term of office.

• (4) Any entitlement to or benefit whatsoever in, under or pursuant to the pension scheme described in Schedule 2, Paragraph 3 shall not comprise an interest in or be deemed to give rise to a payment of a financial benefit, directly or indirectly, from BGÉ Corporate or comprise or be deemed to give rise to a payment of remuneration in breach of this Regulation, Regulation 8 or Regulation 22.

• (5) The remuneration of the members of the supervisory body to whom paragraph (3) applies shall not depend on activities or results of BGÉ Corporate. References to BGÉ Corporate in this paragraph and in paragraph (3) shall not include a reference to Bord Gáis Networks or Gaslink.

• (6) In the case of—

• (a) a proposed member or member of the supervisory body to whom paragraph (3) applies, any decision concerning the appointment of such proposed member or renewal in office of such member (and, in each case, the conditions applicable thereto including conditions regarding remuneration, term and termination), and

• (b) all members of the supervisory body, any decision concerning the termination of office of such members (and the reasons therefor),

shall be notified in writing to the Commission.

• (7) A decision or condition referred to in paragraph (6)(a) shall become binding only if, within 3 weeks of notification to it, the Commission has raised no objections to such decision or condition on the basis of doubts as to the professional independence of the nominated person for membership of the supervisory body or if, having raised such objections, the Commission subsequently confirms in writing that its objections have been withdrawn.

• (8) A decision referred to in paragraph (6)(b) shall become binding only if, in the case of premature termination of a term of office of a member of the supervisory body, within 3 weeks of notification to it, the Commission has raised no objections to such decision and there has been no appeal under paragraph (9) on the basis of doubts regarding the justification for such early termination or if, having raised such objections, the Commission subsequently confirms in writing that its objections have been withdrawn or, if there is an appeal under paragraph (9), the Commission rejects the appeal.

(9)(a) In the case of a member of the supervisory body to whom paragraph (3) applies where the term of office of that member has been terminated early, BGÉ Corporate shall notify the Commission in writing within 3 weeks of the decision to prematurely terminate the term of office of the member.

• (b) A member of the supervisory body whose term of office has been prematurely terminated may notify the Commission in writing of his or her intention to appeal such decision within a period of 3 weeks of the making of the decision. Such notification shall specify the grounds in respect of which the member wishes to appeal the decision.

• (c) The Commission shall request the appellant and BGÉ Corporate to provide all relevant information in support of its actions within a further period of 3 weeks and such information shall be provided.

• (d) A determination as to whether the justification for the decision was inappropriate having regard to Chapter 3 of Part 2, shall be made by the Commission in writing within a period of one month of all relevant information having been received by it and shall be binding on all parties.

• (10) The members of the supervisory body shall not be, nor shall they be deemed to be, directors in law, directors in fact or shadow directors or officers of the ITO for the purposes of the Companies Acts by reason only of their membership of and discharge of their functions as members of the supervisory body.

Board of directors, executive management, management team and employees of ITO

• (2) Subject to paragraph (5), all decisions regarding the appointment and renewal, working conditions (including remuneration) and termination of the term of office, of the board of directors and executive management of the ITO shall be taken by the supervisory body.

• (3) The board of directors of the ITO shall be responsible for taking decisions with respect to the ITO on all matters excluding decisions which the supervisory body is responsible for taking under Regulation 6(2).

• (4) The board of directors, executive management and management team of the ITO shall comply with the following requirements:

• (a) at least half, plus one, of the group of persons comprising the members of the board of directors, executive management and management team, shall not, for a period of 3 years before their appointment, have held any professional position or responsibility, interest or business relationship, directly or indirectly, with BGÉ Corporate;

• (b) the members of the board of directors, executive management and management team who are not subject to sub-paragraph (a) shall not, for a period of at least 6 months before their appointment, have exercised management, or other relevant activity giving access to the same information as could have been obtained in a managerial position, in BGÉ Corporate;

• (c) the members of the board of directors, executive management and management team shall not, while holding that office, have any other professional position or responsibility, interest or business relationship, directly or indirectly, with BGÉ Corporate;

• (d) the members of the board of directors, executive management and management team shall not, while holding that office, hold any interest in or receive any financial benefit, directly or indirectly, from BGÉ Corporate;

• (e) after termination of their term of office, the members of the board of directors, executive management and management team shall not, for a period of not less than 4 years after the date of termination, hold any professional position or responsibility, interest or business relationship with BGÉ Corporate.

• (5) Any decision concerning the appointment or renewal in office (and, in each case, the conditions applicable thereto, including conditions regarding remuneration, term and termination), and any decision concerning the termination of office (and the reasons for the decision to terminate) of the persons nominated by the supervisory body for appointment or renewal as members of the board of directors and executive management of the ITO shall be notified in writing to the Commission. Those decisions and conditions shall become binding only if the Commission has raised no objections to such conditions and decisions on the grounds set out in paragraph (6) within 3 weeks of notification to it and, in the case of a termination of office, where there has been no appeal under paragraph (8) or if, having raised such objections, the Commission subsequently confirms in writing that its objections have been withdrawn or, in the case of a termination of office where there has been an appeal under paragraph (8), the Commission rejects the appeal.

• (6) The Commission may object to the decisions and conditions referred to in paragraph (5) where—

• (a) doubts arise as to the professional independence of a nominated person for membership of the board of directors or executive management, or

• (b) in the case of a premature termination of a term of office, doubts exist regarding the justification of such premature termination.

• (7) There shall be a right of appeal to the Commission for any complaints by members of the board of directors, executive management and management team against premature termination of their terms of office.

(8)(a) In the case where the term of office of a member of the board of directors, executive management or management team has been terminated early, BGÉ Corporate shall notify the Commission in writing within 3 weeks of the decision to prematurely terminate the term of office of the member.

• (b) A member whose term of office has been terminated early may notify the Commission in writing of his or her intention to appeal such decision within a period of 3 weeks of the date of communication of the decision to terminate to him or her. Such notification shall specify the grounds in respect of which the member wishes to appeal the decision.

• (c) The Commission shall request the appellant and BGÉ Corporate in writing to provide all relevant information in support of its actions within a further period of 3 weeks and such information shall be provided.

• (d) A determination as to whether the justification of the decision was inappropriate, having regard to Chapter 3 of Part 2, shall be made by the Commission in writing within a period of one month of all relevant information having been received by it and shall be binding on all parties.

• (9) Remuneration of the board of directors, executive management, management team and employees of the ITO shall not depend on activities or results of BGÉ Corporate. References to BGÉ Corporate in paragraph (4) and this paragraph shall not include a reference to Bord Gáis Networks or Gaslink.

• (10) The requirements of paragraph (4)(c) and (d) shall apply to the employees of the ITO.

Chapter 2 Agreements and transfer plan

BGÉ and ITO to enter into agreements

• (2) An agreement made between BGÉ and the ITO under paragraph (1) is subject to prior written approval by the Commission.

• (3) Subject to paragraph (2), an agreement entered into under this Regulation takes effect from the transfer date.

• (4) An agreement entered into under this Regulation (or the agreement as varied or substituted under Regulation 10) is valid only as far as it is consistent with these Regulations.

Variation of agreements entered into, or taken to have been entered into, under Regulation 9

• (2) A variation of an agreement entered into under Regulation 9 may provide for the variation, or any particular provisions of the variation, to take effect from a specified date (which may be the transfer date). The date so specified is subject to the approval of the Commission, which may substitute another date if it considers it appropriate to do so.

• (3) For the purposes of this Regulation, vary, in relation to an agreement, includes replacing the agreement with another agreement that deals with the same matters.

BGÉ and Gaslink to prepare plan for transfer of assets and staff to ITO

• (a) BGÉ and Gaslink shall, following consultation with the Commission, prepare and submit to the Minister for approval a plan for the transfer to the ITO of all such—

• (i) human, technical and physical resources of BGÉ Corporate and Gaslink specified in the plan which are necessary to enable the ITO to carry out its responsibility for the operation of the transportation system (including with respect to the performance of all corporate tasks such as legal services, accountancy and information technology services),

• (ii) assets, contracts, rights (including licences) and liabilities of BGÉ Corporate and Gaslink specified in the plan which are necessary to enable the ITO to carry out its responsibility for the operation of the transportation system, and

• (iii) human, technical and physical resources and assets, contracts, rights (including licences) and liabilities of BGÉ Corporate specified in the plan which are ancillary to the transportation system or otherwise are not included in subparagraphs (i) and (ii) but which BGÉ Corporate and the ITO agree should be transferred to the ITO (other than in respect of any activity which the ITO is prohibited by these Regulations to undertake),

and

• (b) BGÉ shall prepare and submit to the Minister for approval a plan for the transfer to such subsidiary or subsidiaries of BGÉ, as BGÉ may consider appropriate, of such human, technical, physical and financial resources and assets, contracts, rights (including licenses) and liabilities specified in the plan with respect to such of the financing and other activities of BGÉ Corporate as BGÉ may consider appropriate.

• (2) The transfer plan may specify any consideration (in money or money’s worth, including shares) which may be payable by the ITO to BGÉ with respect to the assets to be transferred to it pursuant to the transfer plan and Regulation 30.

• (3) Subject to the approval of the Minister, the assets and liabilities (including contracts, rights and licences) to be transferred from BGÉ Corporate to the ITO shall be designated in the transfer plan which shall—

• (a) define the assets, contracts, rights (including licences) and liabilities to be allocated—

• (i) by specifying or describing the assets, contracts, rights (including licences) and liabilities to be transferred,

• (ii) by referring to all the assets, contracts, rights (including licences) and liabilities comprised in a specified part of BGÉ Corporate (whether subject to exceptions or otherwise),

• (iii) by providing that any assets, contracts, rights (including licences) or liabilities specified or described in the transfer plan shall be enforceable either by or against either the transferor or the transferee, or both, or

• (iv) by any combination of the means referred to in subparagraphs (i) to (iii),

and

• (b) make such supplemental, incidental and consequential provisions as, in the case of a plan for a transfer under Regulation 11(1)(a), BGÉ and the ITO considers appropriate and, in the case of a plan for a transfer under Regulation 11(1)(b), BGÉ considers appropriate (including provision specifying the order in which any transfers or transactions are to be regarded as taking effect).

• (4) The Minister shall, following consultation with the Commission, approve the plan or plans.

• (5) Nothing in these Regulations shall prevent the transfer at any time or from time to time—

• (a) to the ITO of any assets, contracts, rights (including licences) and liabilities not specified in the transfer plan which BGÉ Corporate and the ITO agree in writing and the Commission and the Minister has approved should be transferred to the ITO (other than in respect of any activity which the ITO is prohibited by these Regulations to undertake), and

• (b) from the ITO of any assets, contracts, rights (including licences) and liabilities transferred to the ITO pursuant to a transfer plan under paragraph 1(a)(i) or (ii) or a transfer under paragraph 5(a) which BGÉ Corporate and the ITO agree in writing, and the Commission and the Minister has approved, may be transferred from the ITO.

Minister to fix date for implementing transfer plan

Transfer to ITO of ownership and operation of transportation system and other matters

• (2) On the transfer date—

• (a) Schedule 1 has effect with respect to the transfer of assets, contracts, rights (including licences) and liabilities of BGÉ Corporate, and

• (b) Schedule 2 has effect with respect to the transfer of employees by BGÉ Corporate.

Variation of transfers by agreement

• (2) An agreement entered into under paragraph (1)—

• (a) must comply with these Regulations and any applicable licence conditions,

• (b) must be in writing, and

• (c) takes effect, following consultation with the Commission, on the date on which it is approved by the Minister or on such later date as is specified in, or determined in accordance with, the agreement.

• (3) An agreement entered into under paragraph (1) does not affect the rights and liabilities arising under a contract of employment unless the relevant employee is a party to the agreement.

• (4) Assets, contracts, rights (including licences) or liabilities specified in an agreement entered into under paragraph (1) are, on the date on which the agreement takes effect, transferred and vested in accordance with the agreement.

• (5) This Regulation has effect as if a reference to a transfer or vesting under the transfer plan included a reference to a transfer or vesting under an agreement entered into under this Regulation.

Proof of title by certificate

• (a) any asset specified in the certificate, or any interest in, or right over, any such asset, or

• (b) any liability so specified,

is by virtue of these Regulations vested in the issuer of the certificate and is, in the absence of evidence to the contrary, proof of that fact.

Right to production of documents of title

• (a) the first person shall be deemed to have given to the other person or persons (as the case may be) an acknowledgement in writing of the right of that other person or persons to production of the document and to delivery of copies thereof, and

• (b) section 84 of the Land and Conveyancing Law Reform Act 2009 (No. 27 of 2009) shall have effect accordingly.

Chapter 3 Functions and characteristics of ITO

Purpose of ITO

ITO (including Distribution System Operator) to be independent of BGÉ Corporate

• (a) effective decision-making rights, independent from BGÉ Corporate, with respect to assets necessary to operate, maintain or develop the transportation system, and

• (b) the power, subject to Regulation 19(1), to raise money on the capital market in particular through borrowing and capital increase.

• (2) The ITO shall not, in its corporate identity, communications, branding and premises, create confusion in respect of the separate identity of BGÉ Corporate.

• (3) The ITO shall not share information technology systems or equipment, physical premises and security access systems with any part of BGÉ Corporate, nor use the same consultants or external contractors for information technology systems or equipment and security access systems.

• (4) The accounts of the ITO shall be audited by an auditor other than the auditor auditing BGÉ Corporate. Nothing in these Regulations shall prevent the sharing of information as between the auditors of the ITO and BGÉ Corporate where necessary for the purposes of, or arising from, the consolidation of accounts of BGÉ Corporate or the accounts of BGÉ Corporate and the ITO.

• (5) Any commercial and financial relations between the ITO and BGÉ Corporate, including loans from the ITO to BGÉ Corporate, shall comply with market conditions.

(6)(a) The provision of personnel and rendering of services by the ITO to BGÉ Corporate and by BGÉ Corporate to the ITO shall be prohibited.

• (b) Without prejudice to paragraph (a), the ITO may render services to BGÉ Corporate as long as—

• (i) the provision of those services does not discriminate between system users, is available to all system users on the same terms and conditions and does not restrict, distort or prevent competition in production or supply, and

• (ii) the terms and conditions of the provision of those services are approved in writing by the Commission.

• (7) BGÉ Corporate shall not—

• (a) subject to paragraph (8), determine, directly or indirectly, the competitive behaviour of the ITO in relation to the day to day activities of the ITO including in respect of the management of the transportation system, or in relation to activities necessary for the preparation of the ten year network development plan submitted to the Commission pursuant to Regulation 25(1),

• (b) engage in any conduct that interferes with or is likely to prejudice the ITO as regards its responsibility for the day-to-day operation of the transportation system, or

• (c) take any action impeding or prejudicing the ITO from complying with its obligations under Part 2 and shall not require the ITO to seek permission from BGÉ Corporate in fulfilling those obligations.

• (8) The ITO shall not, without the prior written approval of the supervisory body, which may be refused at its absolute discretion, engage in any business activity whatsoever outside the operation of the transmission and distribution system. The supervisory body shall be entitled, at its absolute discretion, to refuse approval, funding or any request for approval of borrowing for any business activity whatsoever outside the operation of the transmission and distribution system. The supervisory body shall approve the discharge by the ITO of any actual liabilities transferred to the ITO under or pursuant to the transfer plan in respect of such a business activity in accordance with the terms of those actual liabilities.

• (9) Nothing in this Regulation overrides the powers of the supervisory body pursuant to Regulation 6(2).

• (10) Subject to Regulation 6(2), the ITO may, in pursuing the activity of natural gas transmission and with the prior approval of the Minister, set up appropriate joint ventures, including with one or more transmission system operators, gas exchanges, and the other relevant actors pursuing the objective of developing the creation of regional markets or to facilitate the natural gas market liberalisation process.

Obligations of BGÉ and ITO with respect to financing and investments

• (2) The ITO shall inform the Commission of the financial resources, referred to in paragraph (1), available for future investment projects and for the replacement of existing assets, in respect of the transportation system.

Centralised Funding Arrangements

• (2) A centralised funding arrangement may include the provision by the ITO and its subsidiaries of such financial and other assistance as may be required by BGÉ with respect to the fundraising, borrowing, and other related financing activities to be carried out by BGÉ Corporate for the BGÉ Group.

Chapter 4 Obligations of ITO

Obligations of ITO

• (a) keep detailed records of its commercial and financial relations with BGÉ Corporate and make them available to the Commission upon request,

• (b) submit for approval by the Commission all commercial and financial agreements with BGÉ Corporate,

• (c) inform the Commission of the financial resources available as required by Regulation 19(2),

• (d) operate, maintain and develop under economic conditions a secure, efficient and economic transmission system and act so as to ensure that it has the resources it needs in order to carry out the activity of transmission properly and efficiently and to develop and maintain an efficient, secure and economic transmission system, and

• (e) in relation to the activity of natural gas transmission—

• (i) represent the transmission system operator in connection with the transportation system and contacts to third parties and the Commission,

• (ii) represent the transmission system operator within the European Network of Transmission System Operators for Gas (ENTSOG),

• (iii) grant and manage third-party access on a non-discriminatory basis between system users or classes of system users,

• (iv) collect all transmission system related charges including access charges, balancing charges for ancillary services such as natural gas treatment and purchasing of services,

• (v) plan investment with a view to ensuring the long-term ability of the transmission system to meet reasonable demand and guarantee security of supply, and

• (vi) comply with its obligations as a distribution system operator under Article 26 of the Natural Gas Market Directive and under the Gas Acts.

ITO to have compliance officer

• (b) Nothing in these Regulations shall prevent the appointment of the same compliance officer having responsibilities for the compliance programmes of both the transmission and distribution systems.

• (2) Subject to paragraphs (3) to (5), the supervisory body shall appoint and set the appointment conditions, including remuneration, of the compliance officer. The compliance officer may be a natural person or legal body. The supervisory body may remove the compliance officer from office only following prior approval by the Commission and shall do so for reasons of lack of professional independence or professional capacity upon request by the Commission.

• (3) The identity of, and the conditions of appointment (including the term, duration and the removal from office) of any person nominated by the supervisory body for appointment or renewal as the compliance officer and the reasons for any proposed decision to remove a compliance officer from office shall be subject to the approval of the Commission in accordance with paragraph (4). Any such appointment, renewal, conditions of appointment or removal shall become binding only if the Commission has raised no objections to such matters on the grounds set out in paragraph (4) within 3 weeks of notification to it in writing and, in the case of a removal, there has been no appeal under paragraph (8) or if, having raised such objections, the Commission subsequently confirms in writing that its objections have been withdrawn or, if there is an appeal under paragraph (8), the Commission rejects the appeal.

• (4) The Commission may refuse to approve—

• (a) the appointment or renewal of a person as the compliance officer only where doubts arise as to the professional independence or professional capacity of such person, or

• (b) the removal of the compliance officer before the expiry of his or her term of office where doubts exist regarding the justification of such removal.

• (5) The conditions of appointment of the compliance officer shall ensure the independence of the compliance officer, including by providing him or her with all the resources necessary to fulfil his or her duties.

• (6) The compliance officer shall not—

• (a) for a period of 3 years before his or her appointment, have held any professional position or responsibility, interest or business relationship, directly or indirectly, with BGÉ Corporate,

• (b) during his or her term of office, hold any other professional position or responsibility, interest or business relationship, directly or indirectly, with BGÉ Corporate,

• (c) during his or her term of office, hold any interest in or receive any financial benefit, directly or indirectly, from BGÉ Corporate, and

• (d) after termination of his or her term of office, hold any professional position or responsibility, interest or business relationship with BGÉ Corporate for a period of not less than 4 years after the date of termination.

• (7) The compliance officer shall have a right of appeal to the Commission for any complaints with respect to the premature termination of his or her term of office.

(8)(a) In the case of a compliance officer whose term of office has been terminated early, BGÉ Corporate shall notify the Commission in writing within 3 weeks of the decision to prematurely terminate the term of office of the officer.

• (b) A compliance officer whose term of office has been prematurely terminated may notify the Commission of his or her intention to appeal such decision within a period of 3 weeks of the decision to terminate being communicated to him or her. Such notification shall specify the grounds in respect of which the said officer wishes to appeal the decision.

• (c) The Commission shall request the appellant and BGÉ Corporate to provide all relevant information in support of its actions within a further period of 3 weeks and such information shall be provided.

• (d) A determination as to whether the justification for the decision was inappropriate having regard to Chapter 3 of Part 2, shall be made by the Commission within a period of one month of all relevant information having been received by it and shall be binding on all parties.

• (9) The remuneration of the compliance officer shall not depend on activities or results of BGÉ Corporate. References to BGÉ Corporate in this paragraph and paragraph (6) shall not include a reference to Bord Gáis Networks or Gaslink.

• (10) The compliance officer shall be in charge of the following:

• (a) monitoring the implementation of the compliance programme;

• (b) elaborating an annual report, setting out the measures taken in order to implement the compliance programme and submitting it to the Commission;

• (c) reporting to the supervisory body and issuing recommendations on the compliance programme and its implementation;

• (d) notifying the Commission on any substantial breaches with regard to the implementation of the compliance programme;

• (e) reporting to the Commission on any commercial and financial relations between BGÉ Corporate and the ITO.

• (11) The compliance officer shall submit the proposed decisions on the investment plan or on individual investments in the transportation system to the Commission. This shall occur at the latest when the executive management or the board of directors of the ITO submits them to the supervisory body.

• (12) The compliance officer shall report regularly, either orally or in writing, to the Commission, and shall have the right to report regularly, either orally or in writing, to the supervisory body, with respect to those matters for which he has responsibility.

• (13) For the purposes of carrying out his or her functions, the compliance officer—

• (a) may attend all meetings of the executive management, the board of directors, the supervisory body and all general meetings of the ITO, and

• (b) shall attend all such meetings that address the following matters:

• (i) conditions for access to the transmission system (as defined in the Natural Gas Market Regulation), in particular regarding tariffs, third party access services, capacity allocation and congestion management, transparency, balancing and secondary markets;

• (ii) projects undertaken in order to operate, maintain and develop the transmission system, including investments in new transport connections, in expansion of capacity and in optimisation of existing capacity;

• (iii) energy purchases or sales necessary for the operation of the transmission system.

• (14) The compliance officer shall monitor the compliance of the ITO with respect to the protection of commercially sensitive information from disclosure in a discriminatory manner set out in Article 16 of the Natural Gas Market Directive.

• (15) The compliance officer shall have access to—

• (a) all relevant data held by the ITO, whether in manual or electronic format (which shall be taken to include data held in optical format),

• (b) with or without prior announcement, to the offices of the ITO, and

• (c) all the information necessary, in whatever format, for the fulfilment of his or her task to ensure compliance with compliance programme.

ITO to establish and comply with compliance programmes

• (2) A compliance programme shall be subject to approval by the Commission.

• (3) Without prejudice to the powers of the Commission, compliance with a compliance programme shall be independently monitored by the compliance officer.

• (4) A compliance programme shall be submitted to the Commission within such period as the Commission may specify in writing and shall set out—

• (a) the measures taken in order to ensure that discriminatory conduct is excluded, and ensure that compliance with that programme is adequately monitored, and

• (b) the specific obligations of those persons concerned in the management of, or employment or engagement by, the ITO to meet the objectives in paragraph (a).

• (5) The Commission may, from time to time and having regard to the provisions of these Regulations, by written notice given to the ITO, require it—

• (a) to modify a compliance programme to such extent as it considers appropriate, or

• (b) to substitute for a compliance programme a new compliance programme.

• (6) If the Commission gives a notice to the ITO in accordance with paragraph (5), the ITO shall comply with the requirement within such period as is specified in the notice, or within such extended period as the Commission may allow in writing.

• (7) The ITO shall comply with a compliance programme approved by the Commission.

Reports with respect to network development plan

ITO to prepare network development plan

• (2) The ten year network development plan shall contain efficient measures in order to guarantee the adequacy of the transmission system and security of supply, in particular it shall—

• (a) indicate to market participants the main infrastructure with respect to the transmission system that needs to be built or upgraded over the then forthcoming 10 years,

• (b) contain all the investments already decided and identify new investments which have to be executed in the then forthcoming 3 years, and

• (c) provide for a time frame for all investment projects.

• (3) When elaborating the ten year network development plan, the ITO shall make reasonable assumptions about the evolution of the production, supply, consumption and exchanges with other countries, taking into account investment plans for regional networks and networks within the European Union, as well as investment plans for storage and LNG regasification facilities.

• (4) The Commission shall consult all actual or potential system users on the ten year network development plan in an open and transparent manner. Persons or undertakings claiming to be potential transmission system users may be required to substantiate such claims. The Commission shall publish the result of the consultation process including, in particular, possible needs for investments.

• (5) The Commission shall examine whether the ten year network development plan covers all investment needs identified during the consultation process, and whether it is consistent with the European Union ten year network development plan referred to in Article 8(3)(b) of the Natural Gas Market Regulation. If any doubt arises as to the consistency with the European Union network development plan, the Commission shall consult the Agency. Following such consultation the Commission may require the ITO to amend its ten year network development plan.

• (6) The Commission shall monitor and evaluate the implementation of the ten year network development plan.

• (7) In circumstances where the ITO, other than for overriding reasons beyond its control, does not execute an investment, which, under the ten year network development plan, was to be executed in the following 3 years, the Commission shall take at least one of the following measures to ensure that the investment in question is made if such investment is still relevant on the basis of the most recent ten year network development plan:

• (a) require the ITO to execute the investment in question;

• (b) arrange for a tender procedure open to any investors for the investment in question to be carried out.

• (8) Where the Commission has made use of its powers under paragraph (7)(b), it may oblige the ITO to agree to one or more of the following:

• (a) financing of the investment by any third party;

• (b) construction of the investment by any third party;

• (c) building new assets concerned itself;

• (d) operating the new asset concerned itself.

• (9) The ITO shall—

• (a) provide the investors referred to in paragraph (7)(b) with all information needed to realise the investment,

• (b) shall connect new assets to the transmission network, and

• (c) shall generally make its best efforts to facilitate the implementation of the investment project.

• (10) The relevant financial arrangements referred to in paragraphs (8) and (9) shall be subject to approval by the Commission.

• (11) Where the Commission has made use of its powers under paragraph (7), the network charges approved by the Commission shall cover the costs of the investments in question.

PART 3 Transmission System Operators

Transmission system operators

• (2) Nothing in paragraph (1) shall, subject to obtaining the Minister’s prior consent, prevent BGÉ and the ITO from complying with this Part instead of Part 2.

• (3) From 3 March 2012:

• (a) each undertaking which owns a transmission system shall act as a transmission system operator;

• (b) the same person or persons shall not either—

• (i) directly or indirectly exercise control over an undertaking performing any of the functions of production or supply or directly or indirectly exercise control or any right over a transmission system operator or over a transmission system, or

• (ii) directly or indirectly exercise control over a transmission system operator or over a transmission system and directly or indirectly exercise control or any right over an undertaking performing any of the functions of production or supply;

• (c) the same person or persons shall not be entitled to appoint members of the board of directors of a transmission system operator or a transmission system and directly or indirectly to exercise control or any right over an undertaking performing any of the functions of production or supply;

• (d) the same person shall not be entitled to be a member of the board of directors of both an undertaking performing any of the functions of production or supply and a transmission system operator or a transmission system.

• (4) The restrictions referred to in paragraph (3)(b) and (c) shall include, in particular:

• (a) the power to exercise voting rights;

• (b) the power to appoint members of the board of directors;

• (c) the holding of a majority share.

• (5) For the purpose of paragraph 3(b), the words “undertaking performing any of the functions of production or supply” shall be taken to mean “under-taking performing any of the functions of generation and supply” within the meaning of the Electricity Market Directive and the terms “transmission system operator” and “transmission system” shall include “transmission systemoperator” and “transmission system” within the meaning of that Directive.

• (6) Where an undertaking is not part of a vertically integrated undertaking, the provisions of subparagraphs (b) and (c) of paragraph (3) shall not apply before 3 March 2013.

• (7) The obligation set out in paragraph 3(a) shall be deemed to be fulfilled in a situation where 2 or more undertakings which own transmission systems have created a joint venture which acts as a transmission system operator in 2 or more Member States of the European Union for the transmission systems concerned. No other undertaking may be part of the joint venture unless it has been approved under Article 14 of the Natural Gas Market Directive as an independent system operator or as an independent transmission operator for the purposes of Chapter IV of that Directive.

• (8) For the implementation of this Regulation, where the person referred to in subparagraphs (b), (c) and (d) of paragraph (3) is a public body, 2 separate public bodies exercising control over a transmission system operator or over a transmission system in one instance, and over an undertaking performing any of the functions of production or supply on the other, shall be deemed not to be the same person or persons.

Prohibition of certain transfers and sharing services

• (a) commercially sensitive information, which is held by a transmission system operator which was part of a vertically integrated undertaking obtained in the course of carrying out its activities or with respect to its own activities, which may be commercially advantageous if disclosed in a discriminatory manner;

• (b) the staff of such a transmission system operator.

• (2) Undertakings performing any of the functions of production or supply shall not, directly or indirectly, take control over or exercise any right over undertakings to which Regulation 26 applies.

PART 4 Functions of Commission with respect to BGÉ Corporate and ITO

Commission to resolve disputes between BGÉ and ITO

• (a) the operation or interpretation of Part 2 (including in particular the effect or implementation of the agreement or agreements to allow the ITO to comply with these Regulations), or

• (b) the transfer to the ITO of any assets, contracts, rights (including licences) or liabilities,

either BGÉ or the ITO may make a request, which shall be in writing, to the Commission to make a determination with respect to the dispute.

• (2) On receiving a request under paragraph (1), the Commission shall in the first instance attempt to resolve the dispute by conciliation. However, if the attempt by way of conciliation is unsuccessful, the Commission shall, after giving each party an opportunity to state its case, make a determination in respect of the dispute and notify the parties in writing of its determination. The Commission may include in such a determination such directions as it considers appropriate for resolving the dispute.

• (3) A determination made under paragraph (2) is binding on BGÉ and the ITO and BGÉ and the ITO shall comply with the directions (if any) contained in the determination.

PART 5 Certification and Designation of Transmission System Operators

Requirement for transmission system operators to apply for certification

• (2) Transmission system operators shall notify the Commission of any planned transaction which may require a reassessment of their compliance with applicable requirements of Part 2 or, as the case may be, Part 3.

Certification and designation of transmission system operators

• (a) upon notification by a transmission system operator, other than a notification under subparagraph (b) of this Regulation, pursuant to Regulation 29;

• (b) upon a request by BGÉ and the ITO that, with effect from the transfer date pursuant to Regulation 12, the ITO be certified as complying with the requirements of Article 9(8)(b) and Chapter IV of the Natural Gas Market Directive;

• (c) on the Commission’s own initiative where it has knowledge that a planned change in rights or influence over transmission system operators may lead to an infringement of Part 2 or 3 (as applicable) or where it has reason to believe that such an infringement may have occurred;

• (d) upon a reasoned request from the European Commission.

• (2) The Commission shall adopt a preliminary decision on the certification of a transmission system operator within a period of 4 months from the date of the notification by the transmission system operator or from the date of a European Commission request pursuant to paragraph (1)(d). After expiry of that period, if the Commission has not adopted an explicit preliminary decision, a tacit preliminary decision to grant the Certification shall be deemed to be granted. The preliminary explicit or tacit decision of the Commission shall not become effective until the procedure referred to in paragraphs (3) and (4) has been completed.

• (3) The Commission shall notify its preliminary explicit or tacit decision on the certification of a transmission system operator without delay to the European Commission and shall provide the European Commission with all the relevant information with respect to that decision.

• (4) Within 2 months of receiving an opinion of the European Commission with respect to its preliminary decision on the certification pursuant to Article 3(1) of the Natural Gas Market Regulation or, if the European Commission has not provided its opinion in the required timeframe set out in Article 3(1) of the Natural Gas Market Regulation, within 2 months of the date of expiry of that timeframe, the Commission shall adopt its final decision on the certification taking the utmost account of that opinion, if provided. The Commission shall publish its decision on a publically available website along with the European Commission’s opinion, if provided.

• (5) The Commission and the European Commission may request from transmission system operators and undertakings performing any of the functions of production or supply any information relevant for the fulfilment of their tasks under this Regulation.

• (6) Each transmission system operator, BGÉ or the ITO as the case may be, shall provide all such additional information as the Commission or the European Commission may request in writing which is relevant to the fulfilment of the Commission’s tasks under this Regulation.

• (7) The Commission shall preserve the confidentiality of commercially sensitive information received by it pursuant to this Regulation.

• (8) The Commission’s final decision to certify the ITO shall apply with effect from the transfer date.

• (9) The certification of a transmission system operator by the Commission shall be deemed to be designation. Designation of transmission system operators shall be notified by the Commission to the European Commission in writing and published in the Official Journal of the European Communities.

Certification in relation to third countries

• (2) The Commission shall also notify the European Commission in writing, without delay, of any circumstances that would result in a person or persons from a third country or third countries acquiring control of a transmission system or a transmission system operator.

• (3) The transmission system operator shall notify the Commission in writing of any circumstances that would result in a person or persons from a third country or third countries acquiring control of the transmission system or the transmission system operator.

• (4) The Commission shall adopt a draft decision on the certification of a transmission system operator to which this Regulation applies within 4 months from the date of notification to it by the transmission system operator. It shall refuse the certification if it has not been demonstrated that—