The Actual Cost of Water Charges
Wednesday, May 7th, 2014
One of the biggest talking points in Irish news this week was the announcement of Minister For The Environment Phil Hogan’s declaration that Irish households will receive an annual allowance for 30,000 litres of ‘free’ water under the upcoming water charges system which is due to come into effect in January 2015.
Water Charges
Hogan has described this allowance as being ‘generous’ as an additional 38,000 litres worth of ‘free’ water will be allocated for each legal child (ie: up to the age of 18 years old) that is living in the household.
But how do Minister Hogan’s claims of generosity hold up to scrutiny? Well, it has been calculated that the average Irish household uses up approximately 140,000 litres worth of water every year. If you take it as a given that said household is home to two people under the age of 18, that generates a grand total of 106,000 litres of water in terms of allowance – a shortfall of 34,000 litres in relation to what a household typically uses over the course of the year. In practice, this means that virtually all households will exceed the ‘generous’ free water limit and have to pay a hefty fee of €240 to use water in the year 2015.
Related: Saving Water at Home – tips to reduce the likelihood of your household falliing afoul of the upcoming water charges.
Fortunately, not all of the news to come from Minister Hogan’s was necessarily bad. A planned standing charge of €50 per year regardless of how much water a household uses was scrapped after intense public outcry and discontent. However, uninhabited properties (such as ones which are available for rent and holiday homes) may yet be charged. Hogan said that this was because of “social and environmental reasons”, but did not elaborate in any great detail.
There are also plans in place to cap how much people who need to use more water than average due to medical conditions (such as those who need to use home dialysis machines) will be charged. A ‘free fix’ scheme is also being set up which will mean that homeowners may have leaking supply pipes, which is generating water wastage which contributes to the billed meters, fixed free of charge. However, this only applies to the first time of asking and any additional repairs will be charged for.
It is believed that around 40% of Ireland’s water supply is wasted thanks to leakages due to faulty piping, while up to 23,500 people, mostly in rural areas, need to boil their water before using it for sanitary reasons, thereby forcing them to use up more water than most even for simple tasks.
Irish Water is said to be planning a whole host of different payment options which they say will make the water charges more affordable for homeowners who are struggling financially. Such measures could see the charges being paid for in installments as low as €10. However, the full charge of €240 will still apply.
The aforementioned pricing structure is due to be in place until January 2016 when it will come under revision. Many expect charges to be increased at this point due to the fact that Minister Hogan did not comment on what was planned for 2016 and onward in terms of water charges.
“The regulator will finalise water charges in August but with these decisions, the conditions attached to the funding of Irish Water regarding the average annual water charge, and the fixing of charges to end of 2016, households now have high visibility in good time, as promised, of the likely level of charges,”
– Phil Hogan, Minister for the Environment
Minister Hogan believes that the water charges’ pricing plan is fair and reflects:
“variations in household size and supports affordability. In particular, households with large families, or single occupants — two groups highlighted by the work of an inter-Departmental group on affordability measures and the ESRI as potentially vulnerable to affordability issues — are being protected.”
However, Deputy TD Brian Stanely believes that many will have to pay a lot more than the €240 figure which is being bandied about:
“The Minister is only admitting to the vastly higher charges that will be paid by many households because people themselves have been doing their own calculations. In any event, as I said yesterday, any average figure will encompass a range of low to high. We will also not even know the real level of charges until the Energy Regulator makes his report in August.
It is my belief that eventually, the vast majority of households will be paying a much higher water charge than €240.
That will happen when Irish water is forced to pass the full cost of running the company and the water service onto consumers, as required by the EU Water Directive.”
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