S.I. No. 585/2017 - Electricity Regulation Act 1999 (Petroleum Safety) Levy Order 2017

1. Under the Act, as amended by the

Petroleum (Exploration and Extraction) Safety Act 2010

and the

Petroleum (Exploration and Extraction) Safety Act 2015

, the Commission is required to establish and implement a risk-based petroleum safety framework (the “safety framework”). The levy will recover the Commission’s costs for the operation of the safety framework (the “Operational Costs”).

Operational Cost Recovery

2. The Operational Costs for the Levy Year are €1,108,627

3. Operational Costs will be recovered from Relevant Undertakings

Operational Cost Recovery Methodology — Infrastructure

4. Operational Costs will apply to petroleum undertakings that carry out, or propose to carry out, designated petroleum activities and have, or propose to have, the types of Infrastructure set out in Table 2 in situ.

5. Operational Costs will be apportioned based on (

a

) petroleum infrastructure in situ; and (

b

) petroleum infrastructure proposed to be in situ. Table 1 below identifies the types of Infrastructure that will incur costs under the Levy for Operational Costs along with their associated weighting.

Table 1: Infrastructure types for Operational Costs and associated weightings.

Reference

Infrastructure

Weighting

A

Onshore Facility

5

B

Manned Offshore Facility

5

C

Unmanned Offshore Facility

2

D

Subsea Pipeline

3

E

Onshore Pipeline

3

F

Well(s) (under a single accepted well work safety case) **

3

** Reference F, Wells, refers to a well or wells under a single approved well work safety case only. This does not include wells under a production safety case. Under a production safety case, the wells will be included as part of the weighting assigned to the most appropriate infrastructure type references A to E. The most appropriate infrastructure type into which wells will be assigned will be decided on a case by case basis.

Variable Weightings for Operational Costs

6. The Commission recognises that different infrastructure employed by Relevant Undertakings has the potential to require different levels of safety regulation by the Commission under the safety framework. To this end, all weightings indicated in Table 1 are variable and indicate the maximum weighting that can be applied.

7. To determine the weighting for a specific piece of infrastructure, the Commission will make an assessment to determine the intensity of resources required to perform the Commission’s safety regulatory functions under the Act in relation to such infrastructure (and associated Production Activity). The assessment of the appropriate weighting for such infrastructure for each Relevant Undertaking will be carried out on a case by case basis and in accordance with the Commission’s duty to act consistently. The Commission will consult with Relevant Undertakings on the proposed weighting to be applied to it before it is imposed. Following the assessment and where deemed equitable by the Commission, the Commission may lower the weighting to zero.

Establishment Cost Recovery

8. Establishment Costs will be recovered from Relevant Undertakings who carried out Well Work Activities during 2017

Establishment Cost Recovery Methodology

Claw Back Facility

9. The CRU recovered its Establishment Costs between 2013 and 2016. However, any petroleum undertaking that carries out a Well Work Activity until 2028 is liable for a contribution towards the Establishment Costs. This is facilitated through the provision of a claw back facility whereby the original payees will be reimbursed Establishments Costs paid up to 2016 by future petroleum undertakings liable for the Establishment Costs.

10. Petroleum undertakings carrying out Well Work Activities with an accepted well work safety case during 2017 will contribute to the Establishment Costs via the following methodology

Final well work safety case fee * Number of days the non-production installation is on location / 365 *days

Sealed with the common seal of the Commission for Regulation of Utilities

14 December 2017.

PAUL MCGOWAN,

Chairperson of the Commission.

EXPLANATORY NOTE

(This note is not part of the Instrument and does not purport to be a legal interpretation.)

This order imposes a levy on certain specified classes of petroleum undertakings, for the purpose of meeting expenses properly incurred by the Commission for Regulation of Utilities in the discharge of its functions under the

Petroleum (Exploration and Extraction) Safety Act 2010

.

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of

19

th December

, 2017.

The Commission for Regulation of Utilities in exercise of the powers conferred on it by the

Electricity Regulation Act 1999

(No. 23 of 1999) as amended by the

Petroleum (Exploration and Extraction) Safety Act 2010

(No. 4 of 2010), hereby makes the following Order