Whistleblower investigation reveals Gas Networks Ireland breached terms of licenceWednesday 30 March 2016 23.37
The Commission for Energy Regulation has said Gas Networks Ireland – formerly Bord Gáis Éireann – breached a number of the conditions of its Natural Gas Transmission Licence.
It follows an investigation after a whistleblower alleged an "act of serious financial impropriety" by a senior member of staff within Gas Networks Ireland.
Earlier this month, the Northern Ireland regulator said it would fine Gas Networks Ireland for improper allocation of costs between construction projects.
The allegations were also communicated to the Utility Regulator for Northern Ireland due to the dual jurisdiction operations of Bord Gáis Éireann through its subsidiary there.
The whistleblower alleged the senior member of staff deliberately concealed from the board cost overruns owed to the contractor engaged to construct the Barnakyle to Coonagh West Gas Pipeline.
They further alleged these monies owed to the contractor were subsequently paid through other gas infrastructure projects in Ireland that the company was involved in without observing due process or the necessary approval by the then board of Bord Gáis Éireann.
Commenting on its investigation, Commissioner for Energy Regulation Aoife MacEvilly said the CER has "taken steps to ensure that the effect of the breaches has been reversed in terms of any cost overruns being redistributed back to customers and to ensure that these breaches are not repeated".
She added: “Gas Networks Ireland failed in its duty to supply accurate information to the CER to the detriment of its customers.”
"And what that involved was a failure in financial controls, incorrect reporting of financial information to the CER. So that was a breach of the license conditions of Gas Networks Ireland."
Speaking on RTÉ’s News at One, Ms MacEvilly said other projects that were carried out at the same time are being checked to ensure they complied with regulations.
"There was a cost overrun on a Gas Networks Ireland project and instead of declaring that to the board and then ultimately to ourselves, the team in place at the time allocated the costs to other projects," she said.
The CER said it is reinforcing its activities in monitoring licence compliance by Gas Networks Ireland and is engaging with the Department of Communications, Energy and Natural Resources “with a view to enhancing the regime for administrative sanctions, including the power to fine system operators or market participants in cases of non-compliance”.
Gas Networks Ireland said it accepts the findings of the CER.
It added the breach was "an isolated incident which was a clear breach of the company's values".
The company apologised for the misallocation of costs and said the "incident was and is completely unacceptable behaviour".
Gas Networks Ireland said it has invoked comprehensive disciplinary processes and actions to all the individuals involved.
These sanctions range from verbal warnings to demotion, depending on the individuals' involvement.