Update: Simplified Water Charge System – Environment, Community & Local Government 6th November, 2014

Chun an Aire Comhshaoil, Pobail agus Rialtais Áitiúil:  
To the Minister for the Environment, Community and Local Government:                
 
 
 
To ask the Minister for the Environment, Community and Local Government if consideration may be provided to a simplified water charge system which could be affordable, would reflect the consumers ability to pay, be less administratively costly and at the same time cost effective address the urgent need for investment in a vital part of infrastructure; and if he will make a statement on the matter.  

   
For WRITTEN answer on Thursday, 6th November, 2014.  
 
Ref No: 42608/14 and 42623/14
 
 
 

 
Minister for the Environment, Community and Local Government (Deputy Alan Kelly)  

 
I propose to take Questions Nos.   221   and 229 together.  
 
The Government has embarked on a programme of ambitious reform of the water   sector, as the traditional water services system was in need of fundamental change. Our public water infrastructure is deficient and inadequate as a consequence of decades of under-investment and the lack of a truly, national approach that could maximise the impact of investment.
 
An Independent Assessment published in 2012 reviewed the strengths and weaknesses of the delivery of water services through 34 local authorities, and concluded that there was a fragmentation of leadership and co-ordination, difficulty in attaining economies of scale, difficulty in delivering projects of national importance and an aging and poor quality network. The report concluded that the best way of ensuring increasing efficiency and effectiveness of operations and capital investment and accessing new finances for the water sector, was to establish Irish Water as a public utility.
 
This was implemented through the Water Services Act 2013, which provided for the establishment of Irish Water, and the Water Services (No. 2) Act 2013 which provided for the transfer of responsibility for water services provision from the local authorities to Irish Water. The transfer of responsibility took effect on 1 January 2014.
 
The Independent Assessment also pointed to the particular strengths of the local authority system in relation to locally based teams, and this positive aspect is preserved through the Service Level Agreements (SLAs) put in place between Irish Water and local authorities which garner the knowledge and expertise of local authority staff combined with the network and utility management experience available to Irish Water, to provide for a more consistent and efficient service for customers.
 
Since its establishment, Irish Water has implemented key systems to provide for a more strategic approach to managing water services assets and underpinning priority investment. Capital investment in core infrastructure over the period ahead will be substantially more than in 2013 and operational savings of some €12 million have already been achieved in 2014 through a national approach to procurement.
 
Irish Water, like other utilities, will have the capacity to fund investment without adding to the Government Debt. It would not be possible to fund the same level of investment if the responsibility for water services had re   mained with local authorities. The independent regulation of the sector, by the C   ommission for Energy Regulation (CER),   will ensure that operational efficiency is achieved across the sector, in Irish Water’s central services and in the Service Level Agreements. This will take account of international benchmarks and will be focused on ensuring that customers are only charged for an efficient servic   e. The Water Services (No. 2) Act provided the       CER with   statutory responsibility for protecting the interests of customers.
 
The approach to charging was outlined by Irish Water in a water charges plan which it submitted to the CER in line with the provisions of the Act. The CER has now issued a determination on the water charges plan   .   Full details and associated documentation are available on the CER website at   :      
www.cer.ie/document-detail/CER-Water-Charges-Plan-Consultation/979  

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In making its determination on the water charges plan, the CER had to take account of the decisions made by the Government on the funding model for Irish Water and a direction made under Section 42 of the Water Services (No. 2) Act in July 2014. This policy direction addressed a number of matters relating to domestic water charges including the provision of a free allowance of 30,000 litres of water supplied and waste water treated per annum for a primary residence on a public supply and a free allowance to cover the normal usage of water services by every child in their primary residence based on the same qualifying conditions as the child benefit allowance while customers with specific medical conditions which require increased water consumption w   ill have their charges capped.
 
Consideration is   currently being given to measures to bring the necessary certainty and clarity to the charging structure to ensure water charges are modest and affordable.