1. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 1 Market Liberalisation and Quality of Supply in Ireland Una Brady Commission For Energy Regulation (CER)

2. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 2 Quality of Supply Regulation Quality of Supply Customer Service (Commercial Quality) Voltage Quality Continuity of Supply Key Regulatory Instruments Licences, Codes etc. Performance Criteria Economic incentive in DSO allowed revenue formula

3. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 3 Commercial Quality Key Regulatory Instruments: Performance Standards Mix of Licences, Codes, Agreements that contain commercial quality elements Performance Standards: Guaranteed Standards (GS): Service levels that must be met in individual cases. Otherwise - penalty payment. Overall Standards (OS): where customers in general have a right to expect pre-determined levels of service. No penalty.

4. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 4 Performance Standards Separate charters for PES and the DSO Expanded Networks Customer Charter – 12 GS (some tightened, some new, increases in penalties) Expanded PES Customer Charter - 7 GS with automatic penalty payment Overall Standards for PES and DSO (e.g. 75% of phonecalls to be answered in contact centres within 20 secs)

5. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 5 Regulatory Instruments to improve Commercial Quality Guaranteed and Overall Standards –number of standards, level of service and penalty payments are high compared to other EU countries. Licence conditions to report annually on performance criteria. Other - Independent Complaints Arbitrator, 24 hour contact centres, Disconnection Code of Practice

6. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 6 Voltage Quality While Irl. has adopted CENELEC standards, its voltage quality standard is not met for a significant proportion of rural customers. High number of voltage complaints Approx. 60% (year 2000 estimate) of rural customers have short circuit level < 100 kVA

7. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 7 Voltage Complaints-Key Instruments CER approved capex specifically for voltage complaints but required the no. of complaints to be halved by 2005 Guaranteed Standards (GS): Voltage complaint GS –contact complainant within 10 working days, further 10 for investigation - €35 penalty Voltage Problem Resolution GS- within 12 weeks (except significant reinforcement required) - €50 penalty DSO Performance Report –report no. of complaints (2736 in year 2001)

8. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 8 Continuity Indicators CMLs20002001 Fault255197 Planned172188 Total427385 Big differences across urban and rural High proportion of CMLs are due to planned outages Int./yr/ Cust. 20002001 Fault1.541.38 Planned0.440.51 Total1.981.86

9. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 9 Network Characteristics High lenght of network per customer Low proportion of underground cable - 10% Need for significant additional network capacity Network age and condition is a concern Note–major Network Renewal Project currently underway

10. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 10 Continuity –Key Instruments (1) Economic Incentive in DSO Revenue Formula (2) Guaranteed Standards (GS): Planned Outage GS -min. 2 days notice, penalty - €35 domestic Main Fuse GS – call out within 3 hours, penalty - €35 (3) Overall Standard: 95% of all faults are to be restored within 4 hours (and DSO to report on same) (4) Licence Condition to report annually on Continuity performance (including actual versus target, worst-performing feeders)

11. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 11 Continuity and DSO Price Control DSO - Incentive based regulation for improving efficiency and continuity performance Current 5 year Price Control Period (2001-2005) CPI – X framework with CML targets set by CER which are linked to incentive/penalty Forecast Expenditure for Continuity was allowed but CER set more stringent continuity targets for 2005: Urban CML (50), Rural CML (350), Overall (275)

12. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 12 Continuity Incentive/Penalty Regime Revenue Formula includes incentive/penalty per CML (above/below forecast CML t ) of €215,855 (in year 2000 prices) based on value of lost kWh of €7.2 and 1.6m customers using 17.7TWh in year 2000. Cap incentive (penalty) at +/- 2% of allowed revenue in a given year for net combined incentives (penalties) for Losses and CMLs Storms are excluded (days for which CML is > two standard deviations from the mean) Incentive/Penalty regime to be based on Annual reporting of Continuity - must be robust and auditable

13. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 13 Continuity – Target v Actual CMLs Incentive/penalty in regulatory price control formula of €215,855 (in year 2000 prices) per CML above/below forecast CML t for beating/missing the target Forecast Total CMLActual Total CML 2001400385 2002370463 (current estimate) 2003340 2004310 2005275

14. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 14 Issues currently under Review Given significant refurbishment programme, should penalty/incentive apply to Total CMLs (planned and faults) or should some allowance be made for the number of CMLs due to planned outages under the Network Renewal Project ?

15. Una BRADY_IE_BETA2-6b Barcelona 12-15 May 2003 15 For Further Information View CER website www.cer.iewww.cer.ie In particular see: Determination of Distribution Allowed Revenues (CER/01/128) Distribution Performance Report 2001 (CER/02/219) For Networks Customer Charter and PES Customer Charter see www.esb.ie website.www.esb.ie Contact: info@cer.ieinfo@cer.ie