Dr. Paul McGowan:

I am very pleased to be here and I thank the committee for the invitation. I am one of the three commissioners with the Commission for Energy Regulation, CER. I am accompanied by Ms Sheenagh Rooney, director of operations for water at the commission. We will make the presentation together. We want to briefly present to the committee on the CER and its role in regulating Irish Water and holding it to account for the efficient delivery of water services and customer service.

As slide 3 of the presentation shows, our mission as set out in our strategic plan is the regulation of water, energy and energy safety in the public interest. The public interest is at the heart of everything we do. The CER has six strategic goals which relate to ensuring: a reliable supply of clean water and efficient treatment of wastewater; that regulation is the best international practice; that prices charged are fair and reasonable; that energy and gas are safely supplied; that the lights stay on; and that gas continues to flow.

I will now turn to the CER's specific role - under legislation - in the context of water. Our overriding role is to protect the interests of water and wastewater customers, especially in customer protection. The CER ensures Irish Water’s compliance with codes of practice and a customer handbook, which is essentially the rules - set by the commission- by which Irish Water must comply with regard to the customer service standard delivered by Irish Water. If the latter fails to deliver to that standard, the CER also offers a dispute resolution service to settle any dispute between customers and Irish Water. Under the legislation we also provide economic regulation of Irish Water. This is achieved by approving Irish Water’s proposed water charges plan. The essential elements of that regulation are the approval or setting of a revenue cap on what Irish Water is allowed to earn, how that translates into tariffs, whether they be they domestic or non-domestic tariffs and how it translates into a connection policy and the charges which domestic or non-domestic customers would pay for connection to the Irish Water system. The CER also has a role in the monitoring of Irish Water’s performance across a range of areas including customer service, water quality, security of supply, and delivery of Irish Water’s capital investment plan. We seek co-operation with the Environmental Protection Agency, EPA, which is one of our functions. We have a strong co-operative working relationship with the EPA, although we have different statutory functions. We are about to conclude a memorandum of understanding with the EPA in respect of that role. The CER established, and continues to provide support to and work with, the Public Water Forum, which represents the voice of the water consumer.

I wish to highlight some of the CER's achievements to date. I have already alluded to customer protection and the fact that the CER has produced a customer handbook that sets out obligations on Irish Water. That has now been turned into a series of codes of practice and the customer charter by Irish Water. We are gathering data, preparing compliance reports on that data and publishing the reports for public consumption. In addition, in protecting the interests of Irish Water customers and ensuring delivery of services at least cost - and specifically regarding the complaints and customer protection elements - the complaints resolution service is now established under the auspices of our customer care team. We have a full customer contact and query resolution service in operation for Irish Water customers. In challenging Irish Water to deliver efficiencies, the CER has now completed two revenue controls.

Under the first revenue control, we cut Irish Water's proposed revenue requirement by €183 million or 8.5%. This covered the period October 2014 to 2016. In the second revenue control, which was completed before Christmas last year, we cut Irish Water's proposed costs by 8.2% for the years 2017 to 2018, which resulted in a saving to customers of €165 million.

Specifically referring to its operating expenditure, we now require Irish Water to deliver a 20% reduction in its operating costs in the period 2015 to 2018. As at the end of 2016, Irish Water has delivered 14% of those savings. We have also established a performance assessment framework which is essentially a series of key performance indicators. These are the means by which we will hold Irish Water to account for delivering service improvements while delivering efficiencies at the same time. There is a point at the end of the slide about Irish Water's achievements but they have already been adequately covered by Irish Water.

I will now hand over to Ms Sheenagh Rooney who will talk a little more about how we do our job.