Monday 26 September 2016

Regulator of Irish Water paid staff bonuses of €1.3m in past five years

CER sets the charges for semi-states

Paul O'Donoghue

Published 18/10/2015 | 02:30

According to its most recent report, published in 2013, the CER paid out €273,798 in 'performance-related remuneration' that year
According to its most recent report, published in 2013, the CER paid out €273,798 in 'performance-related remuneration' that year

Water charges regulator the Commission for Energy Regulation (CER) has paid out almost €1.3m in bonuses to staff over the past five years, new figures show.

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According to the organisation's 2013 annual report, the most recent available, the CER paid out €273,798 in 'performance-related remuneration' during the year. This was a slight increase from the €260,000 paid out the year before, although the bonuses were shared among a smaller number of employees, as the CER had an average of 78 staff in 2013, compared to 69 in 2012.

The CER is responsible for setting prices for semi-state companies, such as Bord Gais and most recently, Irish Water, for which it has come under fire from opposition politicians and interest groups. It paid out between €280,000 and €220,000 in the previous three years, bring the total awarded to employees under the scheme to €1.27m between 2009 and 2013.

A spokesman for the CER said a performance-related pay model was introduced when the regulator was established in 1999 and does not apply to senior management.

He said: "Any performance-related element of pay relates to the organisational objectives set by the commissioner. The performance-related pay element is reserved for lower grades and has strict criteria and is not guaranteed. CER staff are specialist and highly marketable and retention of expertise can be supported by such a pay model."

The spokesman added that the CER's costs were not paid for directly by the taxpayer, but were funded by a levy on "industry participants".

It reported a surplus of just over €2.1m for the year, reversing a €420,000 deficit in 2012 as its net income rose from just over €10m to more than €17.5m. This was mainly due to a significant bump in the amount of fees collected from businesses, with income from levies rising from €10m to €16.6m.

The CER spokesman said that any surplus was retained and rolled over into the organisation's budget for next year. "If we record a surplus, it means that we will be looking for less levies in the next year," he said.

Consultancy and legal fees also showed a sharp increase, jumping from €2.7m to €6.5m.

In response to a query from the Sunday Independent, the CER said that consultancy and legal payments fell slightly to €6.1m in 2014. It said that it is tasked with several large-scale projects, such as developing a "new water regulatory framework and achieving the renewable energy targets by 2020.

"These large-scale projects are significant 'once in a decade' undertakings that require the input of specialised consultancy and legal services staff. Using some external expertise will actually give greater value and efficiency to CER costs."

The report also showed that the basic salary for former chairman Dermot Nolan, who has since left for British energy regulator Ofgem, was reduced from about €181,000 in 2012 to about €172,500. The reduction came after Mr Nolan admitted in 2013 that he was concious of his high level of pay.

The CER faced criticism last year when it emerged that it was not provided with a budget breakdown by Irish Water of spending and was not fully briefed on multimillion-euro consultancy contracts.

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