Irish Water

Establishment

The Water Services Act 2013 provided for the establishment of Irish Water.  It is  a subsidiary of Bord Gáis Éireann.  It is established under the Companies Act.

Irish Water was incorporated in July 2013 as a semi-state company under the Water Services Act 2013.  It is to provide water and wastewater services as a single national provider.

As Uisce Éireann (Irish Water) will took over local authority water services from 1 January 2023, it will be necessary to rebrand relevant local authority vehicles and premises with the Uisce Éireann logo.

 Irish Water is incorporated as a private company under the Companies Act.  The Minister for the Environment, Community and Local Government may issue directions to Irish Water requiring it to comply with government policies as specified.  The consent of the Minister for Communications, Energy and Natural Resources is required.

Organisation

There are standard provisions in the legislation for recruitment of staff, maintenance of superannuation plans, including provisions relevant to former local authority employees.  The Minister may make payments to Irish Water in relation to superannuation and the cost of members of staff accepted into the employment of Irish Water.

The Minister of the Environment Community and Local Government with the consent of the Minister for Finance is to consent to the terms of the Memorandum and Articles of Association of Irish Water.  Bord Gáis Éireann holds one share, and 50% of the remaining shares are issued to each of the Minister for the Environment and the Minister for Finance, respectively.  The shares issued to the ministers are non-voting shares.

Bord Gáis Éireann may not dispose of its shares without the consent of the Minister for Environment and Minister for Finance.

The detailed Memorandum and Articles of Association are to be approved by the Minister for the Environment, the Minister for Communications and the Minister for Public Expenditure and Reform.  There are various provisions written into the Memorandum and Articles in relation to the offices of director.  There are restrictions on director’s holdings certain incompatible offices.  There are statutory obligations on directors to disclose interests.

There are also statutory obligations on employees of the new company who have a material interest in any contract or arrangement proposed to disclose the same to the company.  They are not to take part in any negotiations or deliberations whatsoever in relation to the contract or arrangement.  They are not to influence or seek to influence any decision relating to the matter.  This does not apply to employment contracts.

There are statutory restrictions on disclosure of confidential information binding on directors/consultants and advisors.

The 2014 Act made a number of amendments to  pensions provision in respect of Irish Water.  Irish Water is confirmed not to be liable for past service of officers of the Minister or local authorities, other than due the effect of any increase in pension or remuneration by Irish Water.  The cost of pension provision for  past service for such employees remains funded by State.

Finance

The Bord Gáis Éireann may borrow monies with the consent of the Ministers for the Environment, Communication, Energy and Natural Resources, Finance and Public Expenditure.  The subsidiary may borrow money with the consent of the various ministries.  Aggregate borrowings are not to exceed €500 million.

The Minister may make grants out of public monies to Bord Gáis Éireann, Irish Water or the Commission for Energy Regulation.

The consent of the Minister for Environment and Public Expenditure is required in respect of capital expenditure above certain limits.  This is specified by the above ministers from time to time by order.

The Irish Water has power to borrow money with  the consent of the Minister for Environment, Communications; Minister for Finance and Minister for Public Expenditure.  The aggregate amount of value is limited to €2 billion.

The Minister for the Environment may make grants to Irish Water or the CER.  In determining the provision of a grant, the Minister may consider the investment plan provided by Irish Water.

Accounts

The Irish Water is to keep proper accounts of income and expenditure and of all other money spent and received.  Special accounts are to be kept in such form as the Minister for the Environment shall direct with the consent of the Minister for Communications, Energy and Natural Resources and the Minister for Public Expenditure.

There is provision for submission of audited accounts annually to the Minister who shall lay them before the Oireachtas.  The Irish Water is to prepare a report in the performance of activities in the area of water supply in the previous period annually.  The Minister is to lay the report before the Oireachtas.

Irish Water began to take over the responsibilities of local authorities in water and sewage areas in January 2014.  It was to be fully established by 2019, by which stage it was expected to be responsible for the operation of public water services, including

•  management of national water assets,
• maintenance of the water system,
• investment planning,
• managing capital.

It is also to be responsible for capital and investment decisions regarding the national water infrastructure.

Functions

The functions of Irish Water under the legislation include the following:

• roll-out of the water metering programme;
• abstraction,
• treatment and distribution of drinking water;
• collection and treatment of wastewater and sludge disposal;
• strategic management of water management resources;
• sourcing private investment finance in capital projects;
• customer billing and relationship management;
• conservation of water supplies.

Transfer of Functions

The Water Services (No.2) Act 2013 provided for the transfer of functions, property and staff in respect of water services and sewage services from local authorities to Irish Water.  The Local Government (Delimitation of Water Supply Disconnection Powers) Act, 1995 was repealed.

The local authorities continued to have powers that were transferred to Irish Water and were necessary for the performance of local authority functions under other legislation.  This includes domestic wastewater treatment systems and rural water services.

The legislation transfers all assets including buildings, water service infrastructure, vehicles, pipes, sewers and money from the relevant local authorities to Irish Water.  Staff were transferred.  There was provision for consultation and agreement between local authorities and Irish Water in relation to transfer of staff.

The Minister may make an order for water services property to be transferred from a local authority to Irish Water.  Loans associated with the property are not automatically transferred.  Transfer by the Minister shall not be treated as a disposal of property by the local authority.  There is a provision to ensure that there was no adverse impact on the financial standing of the local authorities arising from the transfer of assets from the local authority to Irish Water.

Irish Water may enter agreements with local authorities by which local authorities provide services on behalf of Irish Water.  The Minister may direct Irish Water and local authorities to enter such agreements and specify the functions to be included.  It may include provision for standards to be met by a local authority and to deliver services on behalf of Irish Water.

The initial agreement between Irish Water and the local authority is subject to review after the second and seventh years.  It was intended that the initial agreement is for 12 years unless there is a significant failure on the part of local authorities to provide services under the agreement.

Codes and Plans

Codes of practice may be prepared by Irish Water for approval by the Commission for Energy Regulation. They will make provision for customer service standards, billing, methods of payment of water charges, provision of information to customers and other matters deemed necessary by the Commission.

Irish Water is to prepare a strategic plan for water services to be submitted to the minister.  It is to set out the objectives of Irish Water in respect of the 25 year period following approval of the plan and the means by which it proposes to achieve its objective.

In preparing the water services strategic plan, Irish Water is to have regard to proper planning and sustainable development, ensuring insofar as practicable that the plan is consistent with the national spatial strategy, visual planning guidelines and river basin management plan.  The policy must consider policy factors, including housing strategies, strategic development, and water quality plans.

Irish Water is to prepare investment plans where it considers investment in infrastructure is necessary to perform its functions. It must take into account the water services strategic plan above, other policy considerations, including local area plans, regional planning guidelines, and any strategic development zone.

Before undertaking investment, Irish Water is to consult with the Environmental Protection Agency, regional bodies in whose area the investment plan is likely to apply and each planning authority in respect of whose functional area the investment plan is to apply.  The investment plan is prepared for a two year period after the transfer date.  Future plans will be for durations determined by the CER.

Regulator

The Commission for Energy Regulation may do all things necessary or expedient for the purpose of the performance of water regulatory functions.  The Commission may advise the government in relation to the development of  policy in relation to regulation of the provision of water services.  The Commission may consult with BGE, Irish Water and water services authority for the purpose of this provision.

Water regulatory functions include settling charges for water services, specification of minimum standards, and protection of the interests of consumers.

Irish Water & BGE (Ervia)

The legislation transfers the provisions in relation to charging for water services from the water services authority to Bord Gáis Éireann and Irish Water.  They are to be performable in the same manner as they would have been performable by a water service authority.  They are to be subject to the same consents and conditions which would have applied.

BGE is to keep accounts of monies received or expended in the performance of its functions.  The format is to be approved by the Minister for the Environment with the consent of the Minister for Public Expenditure.

BGE is to submit a report on its activities to the Minister for the Environment and the Minister for Communications, Energy and Natural Resources.  The Minister is to lay the annual report before the Houses of the Oireachtas.

The Minister for the Environment may give directions to BGE regarding the performance of its functions.  The consent of the Minister for Communication, Energy and Natural Resources is required for the direction.  BGE and Irish Water must comply with the directions.

Misc

Land used for the provision of public water services is not rateable for the purpose of domestic rates and the valuation act.  This exemption applies to Irish Water for the provision of water supply and waste water treatment and to group water supplies.

Provision is made for the increase in the maximum number of members of the Board of Ervia.

Irish Water may request a person to provide information required for its functions.  A relevant person is obliged to comply with the request.  BGE has an equivalent authority to require and obtain information.

2022 Act Uisce Eireann

The purpose of the Act is to provide for the separation of Uisce Éireann (Irish Water) from Ervia and its establishment as the standalone national authority for water services. As part of the change the authority shall be known by its Irish name, Uisce Éireann.

The Act provides for a new Board and Chief Executive Officer of Uisce Éireann. It includes revised accountability and auditing arrangements such that Uisce Éireann will be accountable to a Committee of Dáil Éireann as well as being subject to audit by the Comptroller and Auditor General.

It provides for the transfer of certain staff, rights and, liabilities and records from Ervia to Uisce Éireann.

Expenses incurred by the Minister for Housing, Local Government and Heritage in administrating the Act shall be paid out of monies provided by the Oireachtas as sanctioned by the Minister for Public Expenditure and Reform. The Act removes Ervia’s functions relating to Irish Water.

Irish Water is to be known only by its name in the Irish language, Uisce Éireann. This change in name is to take place on and from the day immediately before the appointed day. References in any enactment, legal proceedings or other document to Irish Water are to be construed as references to Uisce Éireann.

Irish Water was formed as a subsidiary of Ervia under the Water Services Act 2013. References to ‘the subsidiary’ in the Principal Act are replaced by ‘Uisce Éireann’.

The Minister is to appoint a day to be the day on which Uisce Éireann ceases to be a subsidiary of Ervia. All shares in Uisce Éireann issued to Ervia are cancelled on this appointed day.

New shares in Uisce Éireann are issued to the Minster for Housing, Local Government and Heritage and to the Minster for Public Expenditure and Reform. Provision is also included for Uisce Éireann to issue more shares to the Ministers from time to time.

Governance

Uisce Éireann is the national authority for relevant water services functions under the Water Services Acts. The constitution of Uisce Éireann will be consistent with the provisions of the Companies Act and the Water Services Act 2013. No alterations to the constitution will be valid without the prior approval of the Minister and the Minister for Public Expenditure and Reform.

Uisce Éireann is to have a board of at least 5 and not more than 10 directors, including a chairperson and the chief executive officer, each of whom is appointed by the Minister for Housing, Local Government and Heritage with the consent of the Minster for Public Expenditure and Reform. The Board requires a quorum of 3 Directors to act. Directors can be appointed for a period not exceeding 5 years.

There is a provision for the appointment of a CEO of Uisce Éireann by the Board with the consent of the Minister. The CEO’s appointment shall be subject to terms and conditions as determined by the Board with the prior approval of the Minister and the consent of the Minister for Public Expenditure and Reform. The  CEO shall at all times be a member of the Board but may not be Chairperson. It also provides that the current CEO of Uisce Éireann will continue as CEO for the remainder of his/her term of office.

Accounts

The financial year depends on the date of the appointed day; The 2022 Act provides for the audit of Uisce Éireann’s accounts by the Comptroller and Auditor General. It also provides for the audit of Uisce Éireann’s accounts by Uisce Éireann’s commercial statutory auditor;

There is provision for the presentation of Uisce Éireann’s audited financial statements and annual report to the Minister prior to them being laid before the Houses of the Oireachtas.

Uisce Éireann’s CEO and Chairperson will give evidence to the Committee of Public Accounts on the matters specified in this section whenever required.

Transfer from Ervia

The 2023 Act provides for the transfer of rights, liabilities, contracts, agreements and arrangements from Ervia to Uisce Éireann where they relate to Uisce Éireann. Any legal proceedings taken against Ervia relating to Uisce Éireann, including claims in respect of loss or injury, shall be continued with the substitution in the claim or proceedings of Uisce Éireann for Ervia.

There is the deletion of references to Bord Gáis Éireann (the name by which Ervia was previously known) and to substitute the Minister for Public Expenditure and Reform for the Minister for Finance.References to Uisce Éireann’s Constitution instead of its memorandum of association and articles of association; and to provide for references to the appropriate Ministers.

In all relevant enactments where Irish Water was comprehended, it is deemed to be a reference to being a subsidiary of Ervia. Uisce Éireann will now be referenced by its own name and not referenced as a subsidiary of Ervia.

Gas (Amendment) Act 2024

In 2018 the Government decided that Irish Water (Uisce Eireann) should be separated from Ervia and made into a standalone entity. On 20 October 2020 the Government approved the memorandum of the Minister for Housing, Local Government and Heritage, which outlined the plan for the development and drafting of a general scheme to achieve this.

The Government also approved the development and drafting of a general scheme of a separate Act to facilitate the integration of Ervia into Gas Networks Ireland (GNI) and to provide for the roles and functions of the reconstituted entity, GNI. The establishment of two separate State companies, one to operate the gas network, and one to develop our water services, provides the optimal solution to meet the future challenges of decarbonising our energy supply and modernising our water services. With the separation of Uisce Eireann from Ervia on 01 January 2022, the remaining company consists of the holding company Ervia and its single subsidiary GNI.

Following the separation of Uisce Eireann from Ervia, the remaining Ervia/GNI business is predominantly (both in terms of activities and revenue) the operation, maintenance and development of the gas networks and interconnectors that are in its ownership. The effect of this legislation will be to modify the company structures to reflect the new single- business approach in line with the Government decision of October 2020.

The Gas (Amendment) Act 2024 gives effect to the October 2020 Government Decision to facilitate the integration of Ervia into GNI.

Dissolution of Ervia, Transfer of Functions,

The 2024 Act establishes a transfer date which will be set by the Minister, by way of an Order, when all remaining Ervia staff, and all functions and assets formerly vested in Ervia, will be transferred into Gas Networks Ireland. With effect from this date Ervia will also be dissolved. It provides for the cancellation of Ervia’s shareholding in Gas Networks Ireland.

The 2024 Act provides for the issuing of new shares to the majority- shareholding Minister, the Minister for the Environment, Climate and Communications and the Minister for Public Expenditure and Reform in the same proportions as shares of Ervia are currently held (i.e. 90 percent of the new shares will be held by the majority-shareholding Minister and five percent by each of the other Ministers). Only the Ministers will hold all the rights associated with those shares thereby providing that Gas Networks Ireland is publicly owned. This approach reflects the position in other State-owned bodies where the shares are held by the Ministers.

The 2024 Act provides for the restatement of the definition of the majority-shareholding Minister. The Minister for Housing, Local Government and Heritage is the current majority shareholding Minister for Ervia. As Ervia will be dissolved and its functions subsumed into GNI, the Majority Shareholding Minister of Gas Networks Ireland will be the Minister for Housing, Local Government and Heritage in order to maintain the previous structure, while facilitating the dissolution of Eriva. Directive 2009/73/EC of the European Parliament in relation to the unbundling of ownership of generation/supply and transmissions systems in the energy market prevents either the Minister for the Environment, Climate and Communications or the Minister for Public Expenditure and Reform assuming the role of majority-shareholding Minister in Gas Networks Ireland.

The 2024 Act sets out that the Minister for the Environment, Climate and Communications and the Minister for Public Expenditure, National Development Plan Delivery and Reform shall not directly or indirectly exercise control over Gas Networks Ireland in carrying out its functions or entitled to appoint a member of the board of GNI, or to exercise voting rights.

Transfer of Functions

The 2024 Act provides for the transfer of all functions in relation to gas that are statutorily vested in Ervia to Gas Networks Ireland. Additionally, it provides for the transfer of all contracts or commitments involving Ervia to GNI. Provision is also made for the administration and business in connection with the performance of the functions transferred from Ervia on the transfer date.

The 2024 Act provides for continuity consequent upon transfer of functions, assets and liabilities of Ervia to Gas Networks Ireland. Anything related to the transfer of the functions of Ervia which was not completed on the dissolution of Ervia can be carried on or completed by Gas Networks Ireland. Every instrument and document made by Ervia before the dissolution has effect as if it were made by Gas Networks Ireland. Any reference to Ervia in the memorandum and articles of any company is construed as being a reference to Gas Networks Ireland. On request by Gas Networks Ireland any moneys, stocks, shares and securities that, immediately before the dissolution day, were standing in the name of Ervia will be transferred into the name of Gas Networks

Ireland. The Minister may certify whether or not any property, right or liability has vested in Gas Networks Ireland, and his certification is sufficient evidence of the fact unless the contrary is demonstrated.

The 2024 Act provides for the transfer of staff from Ervia to GNI. While many staff may already have transferred by agreement, the remaining staff will transfer under this provision. Staff will have no less favourable terms and conditions of service relating to remuneration than they enjoyed in Ervia before its dissolution. The 2024 Act also provides that a transferred person’s superannuation arrangements will continue in accordance with the existing pension schemes, as applied before the transfer date.

Amendment of other Enactments

The 2024 Act provides for consequential amendments to the Gas Act 1976. The annual report, audit and accountability arrangements for Gas Networks Ireland necessitates amendment to the provisions in the Gas Act 1976. A new non-executive Board of Gas Networks Ireland and its Chief Executive are now being prescribed in primary legislation (i.e. the Gas Regulation Act 2013) rather than in Gas Networks Ireland’s Constitution.

Appointments to the new Board will be made by the Minister for Housing, Local Government and Heritage having consulted with the Minister for Public Expenditure, National Development Plan Delivery and Reform. The existing Chief Executive Officer of Gas Networks Ireland will continue in his role of the company post integration.

Amendment Freedom of Information Act

The 2024 Act provides for the consequential amendment to the Freedom of Information Act, which is being amended to remove Ervia as an exempt body; Gas Networks Ireland is already subject to this Act.