Irish Water will be allowed raise prices every year: Eyecatching Headline, but the devil will be in the detail…….again
Recent newspaper headlines reported:
- Water charges are set to go up every year for families because Irish Water (IW) will be allowed to increase the rate.
- Households who stop wasting water and reduce their consumption could still end up with higher bills.
- Irish Water will be able to seek an annual hike in water charges if its earnings are hit by a drop in the usage of water by households.
- Irish Water can also seek increases if the cost of upgrading the water infrastructure turns out to be greater than expected.
The Commission for Energy Regulation (CER), which will regulate charges by Irish Water, has conformed that
- IW will be allowed to keep more profits if they fix leaks faster and install water meters faster and hold on to the money for six years before passing on any cost savings to householders.
- Irish Water will be given the flexibility to raise water charges annually if revenue from households is less than expected.
There will be at least two key conditions:
- Irish Water will have to exceed targets on reducing leakage from water pipes.
- Irish Water will have to install water meters faster than the current rate of one million over the next three years.
CER has also confirmed that the higher the value put on the water infrastructure being transferred to Irish Water (currently €11 bn), the higher the water charges will be for consumers, ie. the bigger Irish Water’s asset base is, the bigger amount of the revenue required from customers to pay for it.
- €11 bn is a great headline figure but there are lots of different methods of valuing it because of the difference between new and old water assets. Modern-era water pipes and water treatment plants that have been paid off already and should not cost Irish Water much or will require repayments for the next 30 years.
No doubt the Irish Water headlines will continue, but surely there is room for simple presentation of the facts (new and old) and the benefits of the new era for management of Water/Wastewater in Ireland…………………. or has this been done already?
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