The Commission for Energy Regulation (CER) is offering companies a chance to establish an early presence in the gas market, which is due to open up completely in 2005.
CER has requested expressions of interest to supply natural gas to five areas: Mullingar, Ballinasloe, Tullamore, Galway and Athlone. The winner will acquire the exclusive rights to supply gas to customers in these areas until July 2006. After that, others will be able to compete for this group.
However with the "churn" rate in the gas market traditionally low, there is a strong chance a new entrant will retain most of the customers. Churn refers to the rate at which customers change supplier.
Bord Gáis is not allowed to submit an expression of interest. However, if no company tables a price acceptable to CER, Bord Gaís will be awarded the contract.
A CER document released yesterday explained that, if the lowest competitive bid from applicants failed to beat "the relevant Bord Gaís published tariff at the time of the competition award dates", the contract would go to Bord Gáis Energy Supply.
The contract involves supplying gas to 7,000 homes initially, although thousands of additional homes will be added in subsequent years.
The gas will be brought to the five areas via a pipeline to the west, which is owned by Bord Gáis. Smaller distribution lines off this main channel are currently being built by Bord Gáis.
The new entrant will have to pay a charge for using these systems, although this charge is regulated by the CER.
The CER said yesterday the competition would allow companies to get into the market before full competition was introduced.
According to a CER document on the competition: "It will provide the new entrant gas supplier with a presence in the domestic market as a platform for becoming a competing gas supplier to all customers in 2005 with full retail competition."
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