Alan Kelly (Tipperary North, Labour) | Oireachtas source

This was done on the basis that these initial costs will enable the company to drive substantial cost savings and service quality improvements over the immediate period to end 2016 and for many years to come.

The CER is responsible for setting performance standards for the new utility, examining its costs with a view to approving, amending or rejecting its "water charges plan" and protecting customers by directing the company in respect of codes of practice in areas such as performance standards, customer billing, payment methods, information communication to customers, and customer complaints. Earlier, the commission's staff outlined their approach to their work before the Oireachtas Joint Committee on the Environment, Community and Local Government, demonstrating the important link between independent regulation and Oireachtas scrutiny.

The commission's work to date has demonstrated the importance and impact of independent, economic regulation. In setting performance standards for the utility, the CER has announced that it will conduct a partial overall performance assessment of Irish Water to incentivise the utility to improve its performance in areas such as service delivery. The company will be required to publish the performance results. This will incentivise the company to improve its performance through a set of key metrics, for example, customer service scores, drinking water standards and environmental compliance. An overall performance assessment will commence from the beginning of the first full revenue review period in 2017.

The CER has also demonstrated its independence in its examination of Irish Water's establishment and operational costs as well as its capital plans. It rejected 5% of proposed establishment costs, 14% of operational costs and has set an overall reduction in costs of 8.2%. Operational costs will have to come down by 7% per annum, and the same level of efficiency will be required in respect of non-committed capital costs. These cost reductions are aimed at ensuring Irish Water's customers pay charges only to cover reasonable costs on the system.

Important safeguards such as this are evidence of the role regulation plays in protecting consumers and ensuring that there are consequences when Irish Water's performance standards drop. The establishment of Irish Water is a critical long-term project for this country and an absolute economic necessity. It will become among the largest utilities in the history of the State and is necessary for a safe and secure supply of water into the future. There is some way to go before we have the world class water system the public deserves but we have already achieved much progress during this ambitious programme of reform. For example, as a result of the establishment of Irish Water, by Christmas of this year boil water notices in parts of Roscommon will be lifted for the first time in 12 years. I am sure this development will be welcomed by everyone in the House. Why it did not happen previously is beyond me. Over the next two years, there will be an average annual increase of €100 million in investment in water services infrastructure in the State.

One of the less commented on consequences of reform, but a fundamental and a positive one, has been the increased focus on water quality and standards. As the public prepares to pay for water services, it will expect even higher standards, and rightly so. I can assure the House that a key driver for Irish Water, the Commission and my Department, is the continual improvement in customer service and quality. Irish Water and I accept that customer service to date has not been good and steps to address this will be taken. More resources have been diverted to the Irish Water call centre. It is currently handling approximately 10,000 calls a day and the average waiting time has been reduced to three minutes. It is expected that by the end of the week in excess of 750,000 responses under the registration process will have been received by Irish Water, the vast majority of these being registering customers. The level of registrations is consistent with previous experience of the pace of registration in respect of the household charge and septic tank registration. Today, the CER indicated that it is considering extending the deadline. Previous experience suggests that there will be a rush of registrations towards the end of the registration period. I accept that Irish Water must do more to facilitate queries from elected representatives of all political parties, be they Oireachtas Members or local councillors. Steps will be taken urgently to address this issue.

In overall terms, an organisational reinvigoration of customer engagement within Irish Water is required. The complex nature of the charging system has led to confusion and frustration. I will be working with Ervia and Irish Water to address these issues and to give customers certainty and clarity with regard to what they will be paying. This must be done immediately. I believe reform of the boards of Ervia and Irish Water will offer an opportunity to reinvigorate the organisation and give it a much stronger customer face.

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