Submission to Oireachtas Joint Committee on
Environment, Culture and the Gaeltacht
CER Opening Statement, 11th February 2014
Uisce Éireann – the maintenance and adherence to the necessary
standards of service to customers in the administration and distribution
of water
Background to the CER
The Commission for Energy Regulation (CER) is Ireland's independent energy regulator.
Our core focus is to protect customers. The CER has also been appointed as the economic
regulator of the Irish water and waste water sector. At a high-level, the CER's overall
mission, acting in the interests of consumers, is to ensure that:
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energy is supplied safely,
the lights stay on,
the gas continues to flow,
clean water is reliably supplied and waste water is removed efficiently,
the prices charged are fair and reasonable, and
CER regulates to best international practice.
Network Price Controls
Independent regulation is the standard international approach for fairly setting the costs of
monopoly networks. A Network Price Control for electricity or gas networks is an
assessment of the revenue required by the network owner and operator to allow it to carry
out its functions (such as the transmission and distribution of gas) so that the standards of
quality and reliability are met on a day to day basis and such that the necessary capital is
available to allow them to build new infrastructure or replace ageing infrastructure to ensure
these standards continue to be met in the future. Sometimes (as will be the case with water)
a substantial part of the new investment is necessary to bring the service up to current
requirements (i.e. the standards are not currently being met). International observers, such
as the International Energy Agency (IEA), have noted that it is a robust model.
A price control and a stable regulatory environment allow the network company to obtain
finance at reasonable rates in the capital markets. It also allows the regulator to build in real
targets for the network operator in terms of the efficiencies and standards it must achieve
over the duration of the price control.
The CER has a track record in determining the price charged to consumers for energy. CER
has undertaken seven price controls in gas and electricity in the past 14 years. These
controls have delivered:
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Operating costs have decreased in real terms
Submission to Joint Oireachtas Committee on Environment, Culture and the Gaeltacht,
February 2014
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Performance has improved (as measured by published regulatory Key Performance
Indicators)
Efficient capital investment has been made to improve and extend the networks
Role of the CER in Water
Overall, the CER will act to protect the interests of water customers, as stated within
legislation. Specifically, the CER will regulate Uisce Éireann (UE) so that:
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Customers are provided with a high quality service via Codes of Practice
UE provides water services in an economical, viable and efficient manner
Water resources are conserved
Continuity, safety, security, and sustainability of water services is provided for
UE can meet reasonable demands for water
UE is compliant with the state’s environmental objectives incl. the EU Water Framework
Directive
UE performs its functions in an open and transparent manner
It should also be noted that the Minister for the Environment, Community and Local
Government has the power to issue directions to CER.
Codes of Practice
UE will submit Codes of Practice on customer service related issues for CER approval.
These Codes of Practice shall make provision for issues such as:
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Standards for UE in performing its functions
Billing of customers for water services
Methods of payment of water charges
Information to customers on communication with UE
Making of complaints by customers regarding water service
Other matters the CER considers necessary to protect the interests of customers
Codes of Practice will be published online so as to be accessible to customers. The CER
can issue a direction to UE to comply with the Codes.
Timelines for Consultation
The CER will consult upon the Codes of Practice and other issues during 2014. CER will
issue the following public consultations in 2014:
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April: structure of water charges & customer protection issues
June: water charge levels
CER will issue the following decisions in 2014:
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July: customer protection issues
August: structure of water charges levels and water charge levels
Submission to Joint Oireachtas Committee on Environment, Culture and the Gaeltacht,
February 2014
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Considering its broad remit to protect the interests of water customers, the CER will aim for a
high quality & efficient public water system. The CER will allow only efficient operating &
capital costs to be passed through to customers, benchmarked with best international
practice.
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Submission to Joint Oireachtas Committee on Environment, Culture and the Gaeltacht,
February 2014
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