Compliance and Enforcement

Our role in compliance and enforcement

Our Compliance and Enforcement Policy statement details the objectives and guiding principles of our compliance and enforcement actions.

The policy promotes a culture:

• of compliance by the regulated entities;
• that provides clear expectations for stakeholders and the public; and
• which delivers enforcement actions serving as a deterrent against non-compliance

Who do we regulate?

Network and market operators

We regulate the following network and market operator licence holders in Ireland.

• EirGrid: the electricity transmission system operator (TSO) and electricity market operator (MO).
• Electricity Supply Board (ESB): the electricity transmission asset owner (TAO) and electricity distribution asset owner (DAO).
• ESB Networks: the electricity distribution system operator (DSO).
• Gas Networks Ireland (GNI): the gas transmission system operator (TSO), gas transmission asset owner (TAO), gas distribution system operator (DSO) and gas distribution asset owner (DAO).

Licence holders have strict compliance requirements and reporting obligations which must be met under the terms of their licence.

The Single Electricity Market (SEM)

We oversee compliance with aspects of the Single Electricity Market (SEM) rules.

The SEM is the wholesale electricity market for the island of Ireland. This is where suppliers and generators trade electricity before selling to customers.

All SEM matters are governed by the Single Electricity Market Committee (SEMC). The aim of the SEMC is to:

• protect the interests of electricity consumers
• promote effective competition of the sale or purchase of electricity through the SEM

Compliance monitoring is delivered through a mixture of proactive and reactive monitoring of the market. In some cases, the CRU oversees compliance with the Utility Regulator (UR) in Northern Ireland. This includes:

• checking market participants’ compliance through several scheduled activities such as:
  • scheduled reporting
  • dynamic monitoring
  • scheduled audits
• carrying out reactive compliance monitoring in response to:
  • analyses of unusual market events
  • analyses of complaints and responses to Regulation on Energy Market Integrity and Transparency (REMIT) findings

Compliance activities undertaken annually include the following.

• Market Audit of the Trading and Settlement Code
• Scheduling and Dispatch Audit
• Balancing Market Principles Statement

REMIT

REMIT stands for the Regulation on Energy Market Integrity and Transparency. It provides for an EU-wide market rules and monitoring framework for wholesale energy markets in electricity and gas.

It is a mechanism for reporting and preventing wholesale energy market abuse and has been in force since 28 December 2011.

REMIT provides a regulatory framework specific to wholesale energy markets that defines market abuse, including market manipulation, attempted market manipulation or insider trading and requires the effective and timely public disclosure of inside information by market participants. It also obliges firms professionally arranging transactions to report suspicious transactions.

This helps consumers, industry and other market participants have confidence that wholesale energy prices are open, fair and competitive.

Market participants must register with the CRU under REMIT.

• Organisations who arrange transactions on wholesale energy products in Ireland must report suspicious transactions or abusive market behaviour to the CRU in a timely manner.
• Market participants must notify the CRU on delays in the reporting of their inside information.
• All stakeholders are encouraged to notify the CRU of suspicious transactions or potential breaches of REMIT.

REMIT defines “inside information" as information that is of a precise nature, is not public yet, relates, directly or indirectly, to one or more wholesale energy products and if it was made public, it would likely significantly affect the prices of those wholesale energy products.

Information about what a ‘suspicious transaction’ is can be found on the Agency for the Co-operation of Energy Regulators (ACER).

To report a suspicious transaction or potential breach of REMIT, or to notify a delay in the reporting of inside information, please use ACER’s online notification platform.

The person making the notification should then forward the PDF of that notification, as generated automatically by ACER, by email to the CRU at: REMIT@cru.ie

Energy Retail Markets

We regulate electricity and natural gas supply licence holders in Ireland. These licence holders supply electricity and/or gas to household and/or non-household customers.

The relevant regulatory requirements are set out in legislation, electricity/gas supply licences, and the Electricity and Gas Suppliers' Handbook.

Price Comparison Websites (PCWs)

Price Comparison Websites (PCWs) are an important tool for customers when switching energy provider. Also, they support competition in the gas and electricity retail markets.

The Accreditation Framework for Price Comparison Websites was established to support regulate the CRU accredited PCWs. This makes sure that customers benefit from competition in the supply of electricity and gas.

Accreditation entitles PCWs to use the CRU logo on their website. Accreditation gives credibility to the PCW and instils consumer confidence in their service.

The CRU assesses PCWs’ compliance with the requirements of the framework.

Three PCWs hold CRU accreditation.

• Bonkers.ie
• Powertoswitch.ie
• Switcher.ie

The latest PCW annual audit reports can be found here.

How we monitor and promote compliance

Compliance Investigations and Enforcement

The CRU regularly conducts compliance investigations. Most investigations conducted to date concern supplier non-compliance with the requirements of the Electricity and Gas Suppliers’ Handbook stemming from conditions of their licences. In the majority of cases, issues are resolved bilaterally with licensees, with remedial actions being completed.

With formal investigations, we publish the findings of the investigation and the action to be taken by the licensee.

Compliance investigations

Authorisation to Construct and Licence to Generate

If you are granted an Authorisation to Construct or Reconstruct or a Licence to Generate, you are subject to compliance assurance and submission measures by the CRU.

A person who constructs or reconstructs a generating station without an Authorisation is liable to a fine of up to €100,000. This is set out in the Electricity Regulation Act 1999.

Similarly, a person who generates electricity without a Licence to do so is guilty of an offence and liable to a fine up to €5,000 or to imprisonment for a term of up to 12 months, or both.

This is set out in S.I. No. 445/2000 - European Communities (Internal Market in Electricity) Regulations, 2000, as amended.

Administrative Sanctions

The Energy Act 2016 allows us to undertake a deterrence-based approach to make sure regulated entities are compliant. The legal provisions set out the areas under which we may impose an administrative sanction. This includes a failure of the licence holder to comply with standards of performance. These standards are set by the CRU.

The CRU’s compliance and enforcement framework include:

• notices of contraventions, directions, determinations and the revocation of a licence
• economic instruments through its role in revenue control applicable to distribution system operators (DSOs) and transmission system operators (TSOs)

Upon an investigation identifying improper conduct, the CRU can impose minor or major sanctions.

• Minor sanctions include issuing advice, caution, warning or reprimand to licensed entities.
• Major sanctions may include a direction to pay the CRU costs up to €50,000 or up to 10% of licensee turnover.

CRU Approach to Administrative Sanctions and the Specification of Standards of Performance

Standards of Performance

For the CRU to issue sanctions, we must first specify the standards of performance.

These standards of performance are outlined in the CRU Compliance and Enforcement Policy Statement.