Mr. Garrett Blaney:

I will outline to the committee the broad role of the Commission for Energy Regulation before I hand over to my fellow commissioner, Mr. Paul McGowan.

CER has been the energy regulator in Ireland since mid-1999 and has broad economic and safety functions. CER's role covers the networks, wholesale markets and retail markets. We were appointed on 7 February 2013 as economic regulator for Uisce Éireann, and CER covers water and wastewater services. Our role in broad terms is to protect the interests of consumers and this sets the framework for all our other activities. We will regulate the network costs of Uisce Éireann and ensure they are efficient. Networks are a natural monopoly. There is a standard model for networks in energy and water. We will set the costs through price controls, and we will use standard international processes for establishing the price controls.

Price controls ensure that standards are imposed on the functions, and also that sufficient capital is achieved at the lowest cost from the consumer point of view. Water and energy services are very capital-intensive industries and controlling capital costs is as important for water services as it is for energy services. It is important that capital is sourced at a low cost. Price controls provide a stable environment and that environment ensures we can build in targets and efficiencies to improve delivery for consumers. We have introduced seven price controls in the energy sector in the past 14 years in both the electricity and gas services. As a result, operating costs have decreased and performance has improved. We have set targets which have been achieved and exceeded. This has allowed us to get efficient capital from capital markets, which is an important factor in capital-intensive industries.

My colleague Mr. Paul McGowan will focus on the CER's role in the provision of water services.