News & insights

The Commission for Regulation of Utilities (CRU) has published its consultation on Price Control 5 (PC5) for the Irish gas network. PC5 sets the revenues that GNI can collect from its customers from 1st October 2022 to 30th September 2027. CEPA has been providing economic and financial support to the CRU across several workstreams and topics, with a number of CEPA branded reports and CRU consultation documents available on the CRU website. The consultation proposes to allow GNI €2.23 billion in revenue under PC5 for the operation, maintenance and development of the natural gas transmission and distribution systems, to ensure a safe gas service and value for customers, while meeting its environmental obligations and its role in the energy transition. Responses are due by 20 September 2023.

Advice provided by CEPA included:

• Evolving the regulatory framework, including:

- Adapting the capex incentive regime in light of the uncertainty around what will be delivered in PC5

- Incentivising GNI to be adaptive and flexible in their role in the Irish gas network

- Increasing the role of output delivery incentives

- Recommendations for information provision and reporting

- Developing uncertainty mechanisms

• Providing revenues and suitable regulatory mechanisms on future role of gas initiatives such as hydrogen, biomethane and compressed natural gas (CNG)
• Benchmarking analysis to assess the efficiency of GNI’s operating costs relative to international peers
• Reviewing input price pressures and productivity improvements in the context of frontier shift efficiency
• Financial advisory on the cost of capital and financeability in a changing rate environment
• Assessing GNI’s business operations costs through bottom-up analysis
• Proposing allowances for innovation projects
• Assessing IT investment plans