Mr. Jim Gannon:

I thank the committee for having us in. We appeared before the previous committee on a relatively frequent basis and are happy to do that again with this committee. As this is a new Dáil session and the first time the CRU has appeared before the committee, I note how much we value this engagement. The work of this committee is vital in shaping Ireland's response to the climate challenge and ensuring that essential energy and water services are delivered efficiently and safely in the public interest.

The CRU is Ireland's independent energy, energy safety and water regulator. We actively serve the public interest by regulating the provision of these services to Irish homes and businesses. As such, our work impacts every Irish home, business and citizen. We strive to ensure safe, secure and sustainable energy and water supplies for all. We are an integral part of facilitating Ireland's energy transformation, providing an important public service through the protection of consumer rights.

We have been to the forefront in shaping the regulatory landscape to support Ireland's energy security and decarbonisation targets. In terms of the security of supply, maintaining the security and resilience of our energy system in a period of transformation is vital. The CRU has supported investment in flexible generation, the ongoing integration of renewables, storage and flexible demand. We are reforming capacity remuneration mechanisms, CRMs, and system services markets to reward technologies that support system resilience. The single electricity market has delivered just over 1,000 MW derated of multi-year new capacity across the island, with a further nearly 900 MW derated currently under construction as well as additional battery storage. The T-4 auction late last year procured more battery storage capacity than any other CRM auction to date. This capacity will support decarbonisation goals by enabling the storage of intermittent renewables. To further support the development of the all-island market, the single electricity market committee is undertaking a review of its strategy for the period up to 2030.

In terms of grid development, in June the CRU published its draft determination on price review 6, PR6, a regulatory process that takes place every five years. The CRU also recently published key regulatory decisions on the Greenlink interconnector revenue process and an initial assessment of the proposed MaresConnect interconnector. In May, we made a decision on ESB Networks' demand flexibility product which will provide flexibility to the distribution system, facilitating renewable generation and connection of demand customers.

Under decarbonisation, the CRU has published a new electricity connection policy and a national energy demand strategy, set out regulatory decisions on grid connection and charging for offshore wind including the provision of a route-to-grid for projects unsuccessful in obtaining support in Ireland's first offshore renewable energy support scheme, ORESS 1. The CRU also introduced a new regulatory decision to support hybrid projects, increasing the utilisation of the grid and is carrying out significant work in this area. This includes offshore price controls and incentives for the delivery of infrastructure to develop a more resilient electricity system. In addition, the pathway for the transfer of the ownership of offshore and onshore assets to EirGrid is an important step to facilitate the future integration of renewables.

We are also the economic regulator for water and wastewater services, responsible for setting Uisce Éireann's regulated revenue, approving its plans for water charges and monitoring expenditure and performance in its delivery of €16 billion of capital and operational investment for water and wastewater service for Irish consumers. On support and protecting customers through the transition, in addition to the recent winter customer protections announced, the CRU made decisions on the smart meter data access code, which this will create opportunities for suppliers and others to offer additional smart services and products, such as more personalised price comparisons and better tailored tariffs, and on the introduction of dynamic tariffs that will enable customers to make cost savings by moving their consumption to periods when prices are lowest.

Collaboration will be essential as we navigate the transition. We will work closely with the Government, system operators, industry stakeholders, customer advocates and our fellow regulators on the island of Ireland and across Europe to ensure alignment and consistency in regulatory approaches that support all consumers.

While we work to ensure energy security and decarbonisation, as regulators, we are very aware that the energy transition must work for people, not just infrastructure. To support this, in May we published a new strategic plan that sets out our ambition for the 2025-27 period and beyond. At this vital time for energy security, sustainability of supply and structural transformation, we are in ongoing dialogue with Government Departments to significantly expand our workforce to meet the growing needs of society and the environment in which we operate. We are transforming as an organisation to better deliver and empower consumers, support policy development and deliver effective regulation.

Over recent months, the CRU has made a number of significant decisions that directly impact customers across the energy sectors. I will take this opportunity to outline these in more detail, as they illustrate the ever-increasing scope and resource intensive work of the CRU. These reflect the CRU’s commitment to ensuring that services remain reliable, efficient and responsive to the evolving needs of consumers and the wider system across all customer groups. They also underscore our role in working for the public interest and delivering modern systems for the State.

Ireland is going through an unprecedented change in our use and demand for electricity and significant investment is required to ensure our electricity networks are fit for purpose, resilient, efficient and capable of supporting Ireland’s climate and economic ambitions. The CRU’s role is to protect the interests of electricity customers by ensuring that EirGrid and ESB Networks make the necessary investments in infrastructure to provide a more sustainable electricity network. The CRU does this through the price review, PR, process which is carried out every five years. PR6 represents a significant step change in the funding requests from the system operators' allowances and proposes to provide EirGrid and ESB Networks with a package of investment in the period 2026 to 2030, with the focus on incentivising the system operators to deliver on their plans. This will enable the connection of electric vehicles and heat pumps to homes and businesses across Ireland and deliver greater interconnection between Ireland and the rest of Europe as well as the necessary investment and development of the offshore and onshore infrastructure to support clean energy and jobs through Ireland’s green economy. Given the scale of investment required for the proposals in PR6, the network charges on bills are expected to see an increase for a typical domestic customer’s network tariff. This is an investment in Ireland’s future and, when implemented with the correct oversight, will deliver a stable system for the Irish public and the wider economy. It is therefore in all our interests to see this implemented and delivered to the best standards. The CRU’s consultation on the PR6 draft determination proposals closed this month and we will publish our final determination later this year.

The CRU is continuing to work towards a decision on a new electricity connection policy for data centres. This is an update to the existing connection policy in place since 2021 and will provide clarity on the electricity grid connection policy for data centre development. The aim of the proposed decision is to provide a pathway for LEU connections to the electricity system, which addresses risks to security of supply and network constraints while minimising, where possible, potential negative impacts on national renewable energy targets and carbon emissions. We received a significant number of responses to the consultation on the proposed decision we published earlier this year, which we are currently deliberating on. The CRU originally indicated an intention to take a final decision in quarter 3 or quarter 4 of this year. However, given the significant number of responses and the balance of priorities facing the decision, the anticipated publication date is subject to fully addressing the complexity of the detailed submissions received. We would welcome the opportunity to further engage with the committee on this topic as we near publication of the decision.

Customer protection, specifically for energy consumers, is a bedrock of the CRU’s role. In September, we announced additional customer protection measures for household electricity and gas customers for the forthcoming winter. The CRU’s published data has shown that arrears levels are trending at historically high levels as regards the value of overall arrears and the average value of a customer’s account in arrears. Since their introduction in 2022, our measures have aimed to shield consumers from the most severe impacts of elevated energy prices while maintaining as fair, competitive and sustainable a retail energy market as possible. Customer disconnection levels have remained comparatively low, compared with pre-Covid-19 pandemic levels. This is in part due to these protections and supplier commitments to the energy engage code not to disconnect consumers who are meaningfully engaging with them.

Some of the key measures for the coming winter period include minimum timelines for debt repayment plans, discounted tariffs for financial hardship metered customers, the increase of debt repayment on pay-as-you-go top-ups and increased requirements on suppliers for the vulnerable customer register. The disconnection moratoriums for special services and critical services registered vulnerable customers will remain in place, as will the winter disconnection moratorium for all other domestic customers. It is important to note that the data have shown that longer disconnection moratoriums, in addition to longer repayment periods, can bring a risk to customers should customer debt levels continue to increase if payments are not made. We continue to work with the Government through the energy affordability task force as it develops cross-departmental and cross-agency responses to energy affordability.

In the earlier part of my statement, I referenced the increasing scope of work of the CRU. The regulatory frameworks required for the integration of both offshore and onshore renewable energy generation will be significant, as will the ongoing infrastructure development requirements in the electricity and water networks and increased needs in our energy safety mandate. To meet these needs, the CRU has grown our resources and headcount from 113 to 186 in the past two years. We have submitted a workforce plan to the Department of Climate, Energy and the Environment and are awaiting a response to this request for a significant further increase in resources.

The CRU is proud of its work and impact to date. We realise, however, that in an increasingly complex global and national environment, the challenges and importance of our work are increasing. We are ready to meet that challenge and will require additional resources to do so. We look forward to continuing to work closely with the Government, and of course this committee, to achieve our collective ambitions for the energy transition. We will continue to strive for safe, secure and sustainable energy and water supplies for the benefit of all consumers. We look forward to the transformation of our energy systems enabling a new relationship between consumers and utilities. There are many opportunities for Ireland and we will continue to act in the public interest to deliver on these.

This concludes our opening statement. We are happy to take questions.