39.—(1) The Minister, following consultation with the Minister for the Environment and Local Government, shall by order direct the Commission to impose on the Board and holders of licences or authorisations, or holders of a permit under section 37 of the Principal Act, public service obligations which may include obligations in relation to—

(a) security of supply,

(b) regularity, quality and price of supplies,

F401[(c) environmental protection, including energy efficiency and climate protection, and]

(d) use of indigenous energy sources.

(2) Notwithstanding the generality of subsection (1), an order made by the Minister under this section may require the Commission to impose on F402[the Board, the holder of a licence, the holder of an authorisation or the holder of a permit under section 37 of the Principal Act] a requirement to make such arrangements F403[as are necessary to ensure that, in any specified period,] there shall be available to F404[the Board, the holder of a licence, the holder of an authorisation or the holder of a permit under section 37 of the Principal Act] F405[…] from—

(a) generating stations which use as their primary energy fuel source peat harvested within the State provided that the amount of peat used in any calendar year to F403[generate that electricity] may not exceed 15 per cent. of the overall primary energy necessary to produce the electricity consumed in the State that year, and

(b) generating stations chosen as a result of a competitive process established by the Minister, the Commission or the Commission of the European Communities, as the case may be, which use as their primary fuel source such renewable, sustainable or alternative forms of energy as may be specified in the order or which operate as combined heat and power plants.

(3) Notwithstanding the generality of subsection (1), an order made under this section may provide for—

(a) the imposition of a public service obligation on F406[the Board, the holder of a licence, the holder of an authorisation or the holder of a permit under section 37 of the Principal Act] in respect of electricity which is produced using indigenous fuel or renewable, sustainable or alternative forms of energy as their primary source or which operate as combined heat and power plants as a result of a competitive process established by the Minister or the Commission of the European Communities prior to this enactment, and

(b) measures designed to encourage effective and efficient use of electricity and to reduce demand for electricity.

(4) The Minister shall send a copy of an order made under F407[this section,] to the Commission of the European Communities not later than 28 days after the making of the order.

F408[(5) Subject to subsections (6), (6A) and (7), an order under this section shall provide, following a calculation by the Commission of whether any additional costs are incurred or additional benefits are received by the Board or holders of a licence or an authorisation or holders of a permit under section 37 of the Principal Act in complying with an order under this section, including any such costs incurred or benefits received after the variation or revocation of such an order—

(a) (i) where it is calculated that there are additional costs incurred, for the recovery, by way of a levy on final customers of the additional costs, including a reasonable rate of return on the capital represented by such costs where appropriate,

(ii) where it is calculated that there are additional benefits received, for the making of a payment to final customers representing the additional benefits,

(b) in relation to a calculation under paragraph (a)(i), for the collection and recovery of payments in respect of the levy—

(i)  from final customers by the Board or the holder of a licence or an authorisation or the holder of a permit under section 37 of the Principal Act,

(ii) from the Board or such holders of a licence, authorisation or permit by the distribution system operator or the transmission system operator, and

(iii) from the distribution system operator by the transmission system operator,

(bb) in relation to a calculation under paragraph (a)(ii), for the collection and recovery of amounts in respect of the payments under that paragraph—

(i) from the Board or the holder of a licence or an authorisation or the holder of a permit under section 37 of the Principal Act by the distribution system operator or the transmission system operator, and

(ii) from the distribution system operator by the transmission system operator,

(c) for the making, out of payments collected under paragraph (b), of payments to the Board and holders of licences or authorisations, or holders of permits under section 37 of the Principal Act as appropriate, and

(d)  for the making, out of payments collected under paragraph (bb), of payments—

(i) to the distribution system operator by the transmission system operator,

(ii) to the Board, the holder of a licence or an authorisation or the holder of a permit under section 37 of the Principal Act by the distribution system operator or the transmission system operator, and

(iii) to final customers by the Board or holders of a licence or an authorisation or holders of a permit under section 37 of the Principal Act.]

F409[(5A) F410[(a) The levy referred to in paragraph (a)(i) of subsection (5) shall be imposed on final customers in respect of a levy period and the payment referred to in paragraph (a)(ii) of subsection (5) shall be made to final customers in respect of a payment period in such a manner that—

(i)  the levy or payment is apportioned between each category of electricity accounts specified in paragraph 1 of Schedule 2 on the basis of the maximum demand attributable to that category of accounts as a proportion of the aggregate of the maximum demand attributable to each of the three categories of accounts, and

(ii) each holder of an electricity account who is a final customer is charged and liable to pay the levy in respect of each electricity account on the basis set out inparagraph 2 of Schedule 2.]

(b) The attribution of the maximum demand in respect of each category of electricity account shall be carried out by the distribution system operator with the approval of the Commission in respect of each levy period F411[or payment period.]

F412[(c) In this subsection and in Schedule 2—

"levy period" means a calendar year or such shorter period as may be specified in the order;

"payment period" means a calendar year or such shorter period as may be specified in the order.]]

(6) An order made under this section which, F413[in accordance with subparagraph (i) of subsection (5)(a)], provides for the recovery of additional costs referred to in F414[that subparagraph] shall provide that such costs shall be recovered in respect of a F415[specified period] and that the amount to be paid in respect of each year F416[or part of a year] in that period to the Board or to a holder of a licence or an authorisation F417[or the holder of a permit under section 37 of the Principal Act] shall be the amount of the additional costs certified by the Commission as having been incurred by the Board or such holder of a licence or an authorisation F417[or the holder of a permit under section 37 of the Principal Act] in accordance with the order.

F418[(6A) An order made under this section which, in accordance with subparagraph (ii) of subsection (5)(a), provides for a payment referred to in that subparagraph shall provide that such payment shall be made in respect of a specified period and that the amount to be paid in respect of each year or part of a year by the Board or holders of a licence or an authorisation or holders of a permit under section 37 of the Principal Act to a final customer shall be the amount of the additional benefits certified by the Commission as having been received by the Board or holders of a licence or an authorisation or holders of a permit under section 37 of the Principal Act in accordance with the order.]

(7) An order made under this section may—

(a) impose requirements (whether as to the furnishing of records or other information or the affording of facilities for the examination and testing of meters or otherwise) on the Board F419[, the transmission system operator, the distribution system operator] and on holders of licences or authorisations,

F420[(b) provide for the times at which any payments under subsection (5) are to be made,]

(c) require the amount of any overpayment or underpayment which is made by or to any person to be set off against or added to any subsequent liability or entitlement of F421[that person,]

F422[(d) without prejudice to the generality of paragraph (c)—

(i)  provide for estimated and actual additional costs to be included in the calculation of additional costs and estimated and actual additional benefits to be included in the calculation of additional benefits,

(ii)  provide for adjustment in the calculation of additional costs or additional benefits to account for—

(I) over recovery or under recovery of additional costs, or

(II) over recovery or under recovery of additional benefits,

arising in a previous payment period or levy period (within the meaning of subsection (5A))

and

(e)  provide that payments referred to in subsection (5)(d)(iii) may be made to a final customer by way of credit given for purchase of electricity.]

F423[(8) The Minister shall exercise the powers conferred by this section so as to ensure that the sums realised by F424[payments pursuant to subsection (5)] or otherwise are sufficient (after the payment of the administrative expenses, as certified by the Commission, of the Board and holders of licences or authorisations or holders of permits under section 37 of the Principal Act incurred in the F425[collection of the payments]) to pay to the Board and holders of licences or authorisations or holders of permits under section 37 of the Principal Act F426[, the distribution system operator and final customers] the payment required to be made by the order.]

(9) The Minister may by order, amend or revoke an order made under this section including an order made under this subsection but such amendment or revocation shall be without prejudice to the continued operation of the order in respect of additional costs F427[or additional benefits] of the type referred to in subsection (5) which the Commission certifies in respect of each year or part thereof of the unexpired part of the specified period of years to have been reasonably incurred notwithstanding the amendment or revocation.

(10) A draft of the order proposed to be made under this section shall be given by the Minister to the person or persons upon whom the obligation is to be imposed one month before the order is made.

(11) For the purposes of orders made under this section, “public service obligation” means an obligation placed on electricity undertakings which takes account of general social, economic and environmental factors.

F428[(12) In making an order under this section, the Minister shall have regard for the need for public service obligations to be imposed in a non-discriminatory and transparent manner.]