coll. - Driving Performance at Ireland’s Commission for Regulation of Utilities

The business of regulating is becoming increasingly less technocratic and more sophisticated. Complexity, technological advancement and societal change are transforming the way that regulatory agencies operate. Traditionally tasked with ensuring access to and quality of public services, facilitating investments, and protecting market neutrality, regulators today are dealing with greater demands in a context of uncertainty. They need to be flexible, robust and aware able to react to new trends, stand up to scrutiny, and actively collect and analyse data and information. Against this backdrop, good governance is all the more essential.

The OECD has developed a framework to help regulators assess and strengthen their organisational performance by looking at both internal and external governance. Internal governance refers to organisational structures, behaviour, accountability, business processes, reporting and performance management; external governance, to the roles, relationships, distribution of powers and responsibilities with other government and non-government stakeholders.

This report applies the OECD framework to the Irish Commission for Regulation of Utilities (CRU), responsible for regulating energy markets, energy safety, and public water and wastewater services in Ireland. The review finds that the CRU is a mature and well-performing regulator that has, among some of its achievements, facilitated Irelands transition from monopolistic gas and electricity sectors to fully competitive markets, and expanded its regulatory remit to include energy safety, the joint-oversight of the all-island Single Electricity Market between Ireland and Northern Ireland, and water regulation.

While the CRU has successfully adapted to meet its growing mandate, it is also facing a number of new challenges. These include external factors such as Brexit and European energy reforms that add complexity to the future governance of Irish utilities. Moreover, a rapidly transforming market requires the CRU to regulate emerging technologies and to deliver and effectively communicate on increasingly sophisticated products, such as smart meters.

The report recommends a package of integrated reforms to help the CRU prepare for the future. These recommendations are intended to complement the CRUs ongoing efforts to improve its governance processes in line with best practices. The review underlines the importance for the CRU of setting and communicating priorities more assertively as an independent regulator, building its culture of independence internally and with external stakeholders, seeking more flexibility in managing its human resources, better aligning its strategic objectives with resources and outcomes for a stronger narrative of its activities and results, and, based on this, reinforcing its accountability system. These integrated reforms can help the CRU more effectively consolidate its role and responsibilities, match its resources to outputs, and communicate its performance to all stakeholders across government, industry and the public.

This report is part of the OECD work programme on the governance of regulators and regulatory policy, led by the OECD Network of Economic Regulators and the OECD Regulatory Policy Committee with the support of the Regulatory Policy Division of the OECD Directorate of Public Governance. The Directorates mission is to help government at all levels design and implement strategic, evidence-based and innovative policies that support sustainable economic and social development.