Dr. Paul McGowan:

I will get through my opening statement as quickly as possible. I am joined by my fellow commissioners, Ms Aoife MacEvilly and Mr. Garrett Blaney, and Mr. John Melvin, our director of energy and legal.

The OECD recently published its report Driving Performance at Ireland’s Commission for Regulation of Utilities, CRU. The report makes recommendations on a structured engagement between the CRU and the Oireachtas, to which we are accountable via the relevant joint committees. At the outset, we acknowledge the contribution of the committee to the peer review process and its constructive engagement throughout the process. It was very much appreciated. The peer review was carried out in 2017 and included consultation with the CRU and key stakeholders, including the committee. The review is not a review of our policy or action per se; it is a review of the organisation’s governance. This includes a review of organisational structures, business processes, reporting and performance management and accountability. The aim is to provide the CRU with a package of recommendations which, if implemented, will prepare us for an increasingly complex and challenging regulatory environment we face in the future.

Overall, the peer review finds that the CRU is a mature and well-performing regulator. I acknowledge the professionalism and commitment of the staff who have helped the CRU deliver on its mandate. Nevertheless, the review has identified a number of areas where the CRU’s overall governance can be improved. The focus for today, at the committee’s request, is to concentrate on the recommendations that address the relationship between the CRU and the Oireachtas, to which we are accountable.

Key relevant analysis and recommendations include that we established structured mechanisms for the presentation of the CRU annual reports to Oireachtas standing committees. These meetings would also facilitate discussion of long-term trends and challenges for the sectors overseen by the CRU. The report also recommends the development of a simple dashboard of high-level performance indicators that can be used to regularly update the committee, among others, on sector and regulator performance. There is a recommendation that the CRU build more transparency into some of the information sharing with the legislature and others. The committee also highlighted the OECD’s assessment concerning staff recruitment and retention challenges that the CRU faces, including a lack of flexibility to hire temporary staff to work on emerging issues.

While the review has only been published, the CRU has already made progress on some of the areas of recommendation. Over the course of 2016-2017, the CRU has established a new human resources, HR, strategy. Under that HR strategy, a comprehensive workforce plan will be carried out in 2018 to address the adequacy and skills mix required to meet the CRU’s wide and expanded regulatory remit. We would expect the outcome of this work to include a submission on additional resource requirements to our parent Departments. In 2018, the CRU will deliver a new strategic plan for the period 2019 to 2021. This project is under way. The plan and the process for the plan will draw on the outputs from the OECD report itself. A key element of it will be engagement with external stakeholders. I expect to extend an invitation to the committee or its representatives in the near future. In line with the OECD’s recommendation, the CRU has established an advisory group of three independent experts with skills relevant to our broad remit. The group will act as a sounding board. That is in line with one of the OECD recommendations.

I will now turn to some initial thoughts concerning the CRU’s accountability framework and in particular initial ideas for a structured and effective engagement with the Oireachtas joint committees. For the purpose of today’s discussion, I will concentrate on our energy safety and energy market functions and not water. We have a number of key reporting milestones throughout a typical year. These reports would, in our view, form a strong basis for engagement with the Oireachtas committee to discuss future plans, sectoral and regulatory performance and emerging trends or future challenges. The key reports are the CRU’s annual report, which includes the audited financial statements for the CRU along with a report on the activities undertaken by us during that period; and the CRU’s annual work plan, which is a statement of our proposed work plan for the calendar year. It identifies ongoing and new regulatory actions and projects that are designed to deliver on our strategic plan. The annual work plan is part of our integrated business planning process which pulls together consideration of our financial and other resource requirements. Another key report is the CRU’s annual safety report, which is an annual report on the safety performance of the sectors we regulate. They include the upstream oil and gas sector, downstream gas, natural and liquefied petroleum gas, LPG, and the electrical contracting and gas installation sectors. Our annual customer survey is another key report. It is an annual survey across gas and electricity retail markets to identify consumer sentiment and trends in both domestic and non-domestic sectors. This survey acts a key input into retail market policy.

We have market reports, both wholesale and retail, annual and quarterly reports which analyse key statistics in the wholesale electricity, electricity and gas retail markets. They include analysis of retail market share, customer switching rates and the customer care team annual report. This report captures the work of the CRU's customer care team. It includes an analysis of key statistics, trends and case studies on our statutory complaint resolution function in the electricity and gas retail markets, as well as the water sector. This report includes an analysis of complaint volumes, including by supplier. These reports, or a subset of them, could provide a structured basis for engagement with the committee at various points of the year. They provide a mix of look forward, look back and emerging trend information. I emphasise that these only represent initial thoughts and we would be happy to use the time today to discuss this proposal and address any queries the committee may have, more generally, concerning the OECD report.