Mr. Michael G. O'Sullivan:

Developing the appropriate funding model for Irish Water is a critical task in ensuring that the new utility has the capability to perform all its functions and to deliver high-quality public water services in the future. Work on devising the model is under way and will take a number of months to complete. There are a number of stakeholders that have an important role to play in this process, including Bord Gáis, the Department of the Environment, Community and Local Government, NewERA, the Department of Public Expenditure and Reform, the Commission for Energy Regulation and the Department of Communications, Energy and Natural Resources.

The independent assessment of Irish Water commissioned by the Government indicated that the utility could, over time, be financially self-sustaining, although it is expected that the Exchequer will continue to provide funding for an interim period. This will be complemented by the introduction of domestic water charges from 2014, by the amalgamation of existing non-domestic charges in 2015 and by fund-raising on the markets from 2016 to support investment needs.

The Government has decided that domestic water charges will be based on usage and that a national metering programme will be introduced to support that. The Commission for Energy Regulation will be responsible for devising the regulatory framework that will determine the level of domestic charges. This process is due to commence shortly and we anticipate that the commission will hold an extensive public consultation on domestic water charges in the middle of 2013.

The metering programme is a major undertaking. At this stage it is anticipated that 1.05 million residences will have meters fitted to the public water supply point connecting with their properties. Significant preparatory work must be undertaken in advance of the commencement of meter installations, such as allowing time for local authorities to conclude their surveys, which will inform the location of the meters; the appointment of local and regional contractors to undertake the installations; and the procurement of boundary boxes and meters. Installation of boundary boxes and meters will commence next year.

The regulator will determine the charging approach for customers who do not have a meter when domestic billing starts. Based on experiences in other countries, it is possible to structure these charges so that they are aligned to equivalent metered charges. It is important to reiterate that billing will not commence before 2014, and there will be no up-front costs.

Bord Gáis will be ready to commence domestic billing from 2014. However, as the committee will be aware, there are a number of outstanding policy decisions that will be finalised in the coming months, including a final decision on billing day one for domestic customers; the level and structure of the free allowance andmeasures to address the needs of those with affordability issues or medical needs requiring a high essential use of water; the disconnections policy, although it is understood that domestic disconnections will be disallowed; and a final decision on who is responsible for the bill, namely, the tenant or the landlord in the case of tenanted properties.

These are public policy matters and I have no doubt that the joint committee will continue to play a positive and constructive role in the debate on the issues. I will hand over to our chief executive officer, Mr. John Mullins.