Mr. Paul McGowan:

I thank the Chairman and members of the committee. The CER is Ireland's independent energy regulator. We have broad economic and safety functions in energy. Following legislation enacted late last year, we expect to be formally appointed as Ireland's water regulator in the coming weeks. Our duty is to protect the interests of customers. To that end, we place a strong focus on customer protection measures and ensuring efficiencies in operating and capital expenditure in the utilities that we regulate. In addition, a stable regulatory environment assists access to capital markets at reasonable rates and therefore minimises costs for the consumer ultimately.

Our aim for the water sector is for a high-quality and efficient water system to benefit water customers. In 2014 we will consult publicly on the structure of water charges and on the customer protection measures that we propose to put in place. This will be done in April this year. We will also consult publicly on the water charge levels that we anticipate or that we are proposing in June this year. This will follow from a detailed submission from Irish Water, which we will analyse. The commission will then issue its decision on water charge structures and the level of those charges in August this year, and those charges will take effect from October 2014. Our focus will be to ensure that only efficient Irish Water operating and capital costs are passed through to customers. To this end, we will include benchmarking against best international practice as part of the process of analysing those costs.

Already, following a request from the Minister, the commission has carried out a short high-level review of Irish Water set-up costs. This was carried out in late October and November 2013. It found that most costs appear reasonable at a high level. However, it was pointed out that further detailed analysis was needed to confirm this. The analysis of these Irish Water costs will be carried out by the CER in the coming months to the timetable that I have set out. We will look at the totality of those costs and we will only be allowing efficient Irish Water costs to be paid for by water customers.