Irish Water Update. 1. Domestic Water Tariffs

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1 November 2014 Irish Water Update Wednesday, 19 th November, the Government made an announcement on the tariff structure for domestic water charges and other affordability measures. Given the importance of these changes to Irish Water, we have prepared this Update which we hope will provide you with some clarity. 1. Domestic Water Tariffs New Proposals. New domestic water charges will now apply from 1 st January 2015 for both metered and unmetered homes in Ireland. Key information for domestic customers: Water services for children are free. There will be a Water Conservation Grant of 100 per annum available for all primary residences. Domestic water charges are now set until the end of How much will domestic customers pay for their water charges? Households that do not have a meter installed at 1 st January 2015 will pay: A charge based on adult occupancy: o o 160 for a single adult occupant house for both water and wastewater services; or 80 per annum if only using one service. 260 for a house with two or more adults for both water and wastewater services; or 130 per annum if only using one service. Households that will have a meter installed by 1 st January 2015 will pay based on their metered usage at a rate of: 1.85 per m³ (1,000 litres) of water supplied and 1.85 m³ of wastewater removed. Metered bills will provide for a free allowance to cover each child s normal water and wastewater needs (21,000 litres per annum/per service/per child) so that charges only apply to adults (those 18 and over) in households. However, the quarterly bills will be capped at the unmetered limits as outlined above. Not permanently occupied charge. A minimum charge of 125 per year will apply for not permanently occupied dwellings using both water supply and waste water services. The charge for dwellings connected to a single service will be per year. This applies to metered and unmetered dwellings. Such dwellings with meters installed will pay 3.70 per 1,000 litres for usage above the equivalent usage for the minimum charge. A cap of 260 per dwelling applies. Worked examples are detailed in Appendix 1. 1

2 Will there be rebates for households moving from unmetered to metered charging? Yes, if a dwelling is metered after 1 January 2015 up to the end of 2018 and if a household s usage for the first metered year is less than the relevant maximum charge, the household will be due a once-off rebate on the difference between the charges paid for the unmetered period and the charge that would have been paid through metered usage. This will be automatically calculated by Irish Water after a full year of metered usage and normally applied as a once-off credit to the customer s account. What is the Water Conservation Grant? Households that register with Irish Water will, in the case of primary dwellings, be eligible for a 100 Water Conservation Grant, payable through the Department of Social Protection. Applications will be made to the Department of Social Protection who will administer the grants. Details on how to apply will be communicated by the Department of Social Protection. These grants are paid directly to households. You do not apply to Irish Water for these grants. Will there be concessions made for households with piping or water quality issues? Where water is unfit for human consumption, i.e. where a boil water notice has been issued, or where a customer is subject to a drinking water restriction notice linked to the public water supply network, affected customers will receive a 100% discount to the water supply portion of a their bill for the duration of the restriction. Households will, where relevant, still be liable for the charge for wastewater services. Will there be concessions for households with hard water? No. Neither hard water nor the substances associated with hard water, such as lime, calcium and magnesium, require the restriction of a supply nor do they make water unfit for human consumption. What is available for customers with medical conditions requiring high water usage? Irish Water will continue to provide priority services for those critically dependent on water for a medical condition. Irish Water will also continue to offer special services for customers who require additional support communicating with, or receiving services from, Irish Water. As all customer bills will be fixed at the relevant maximum charges, the requirement to cap bills for particular customer groups no longer exists. What charge will people resident in nursing homes pay? If they are fully resident in the nursing home, but still retain their primary residence, they should pay the unoccupied dwelling charge on their primary residence. A minimum charge of 125 will arise for such dwellings ( for a single service), but if the dwelling is their primary residence, rather than a second home, they will be eligible for the 100 water conservation grant, making the potential net cost to such persons 25 for the year. 2

3 Revised key dates. The closing date for the receipt of completed applications so as to ensure your first bill is accurate is now Monday 2 nd February Water charging will now commence from 1 st January The date for the commencement of billing is now April When will billing commence? Domestic water bills will now issue with effect from April What payment options will be available? A range of flexible payment options will be available. Irish Water will facilitate bill payment through direct debit, electronic funds transfer, payment by cash at any retail outlet with a Paypoint or Payzone sign, or a post office where a bill can be paid in full or part payments of a minimum of 5. What happens if people don t pay their bill? The Government has announced its intention to legislate to remove the power to reduce the supply of water to dwellings where water charges remain wholly or partly unpaid. However in lieu of this, the following late payment provisions shall automatically apply, unless the customer enters into a payment plan: One Adult Household (capped at 160) - 30 will be added to any bill where outstanding payments equate to the total annual payment and remain unpaid for 3 months or more. An additional 30 will be added on every anniversary of the original add on date. This provision applies to all annual amounts that remain unpaid if a payment plan has not been entered into with Irish Water. Two Adult Household (capped at 260) - 60 will be added to any bill where outstanding payments equate to the total annual payment and remain unpaid for 3 months or more. An additional 60 will be added on every anniversary of the original add on date. This provision applies to all annual amounts that remain unpaid if a payment plan has not been entered into with Irish Water. Provision will be made for the automatic creation of a statutory charge on the dwelling in respect of unpaid water charges. In the case of tenants in private rented accommodation, legislation will be introduced to insert into all tenancy agreements/leases a deemed obligation on the tenant to discharge their liability for water charges. On the changeover of a tenancy, the registration of a new tenant with Irish Water would be conditional on all water charge arrears being discharged and, in the event of the former tenant not discharging those arrears, the landlord would be entitled to withhold the amount concerned from the tenant s deposit and would be required to remit the amount involved to Irish Water. In the particular case of local authority tenants, where deposit arrangements do not apply, where a customer is in arrears for more than 12 months and a late 3

4 payment fee has accrued, Irish Water, having first provided the customer with the opportunity to pay the arrears or enter into a payment plan, will advise the local authority concerned of the amount of arrears and the local authority will be required, by law, to recover the amount outstanding over a 12 month period, and remit the amount involved to Irish Water. Any customers who have unpaid water charges can be pursued through the Courts by Irish Water for the sums due and a judgment may be obtained against the customer for the amount due. Can Irish Water reduce water supply or disconnect if people do not pay their water charges? No. It is intended to legislate to remove the power to reduce the supply of water to dwellings where water charges remain wholly or partly unpaid. Irish Water is prohibited from disconnecting houses connected to the public water supply in the event of charges being wholly or partly unpaid. Will Irish Water have power to seek payment from employers or the Department of Social Protection? No, there is no provision for such a measure. 2. Benefits of the new structure Certainty. All households will know what their maximum bills will be until the end of 2018, which is particularly important for larger households or those with high usage due to medical needs. Simplicity. There are only two maximum capped charges for primary dwellings one for single-adult households, the other for all multi-adult households. Affordability. The absolute maximum charge is 5 per week; for single households, it will be approximately 3 per week. Households can manage their consumption to achieve a lower metered bill. The annual water conservation grant of 100 will help eligible households to reduce their net water costs now and in the future. Encourages Conservation. With a meter, households have the opportunity to pay less than the maximum bill; with the conservation grant households can make changes with a view to lowering charges; investment by Irish Water in fixing public mains and customers leaks during this transition period will also help to conserve our water resources. 3. New Application Process New Application Process. With effect from 19 th November, there is an amended application process, as follows: A new application form is now in use. A copy of this form is attached to 4

5 this Update for your information and use. This form: o is available to download from the o Irish Water website. Printed copies will also be made available at local Post Offices at a date to be advised. This form can be used for postal applications with immediate effect. You can apply online. The online application has been amended and is available for use. If you have your original application pack, the existing Application Number and PIN can be used. Irish Water will not be generating new or replacement PINs so there is no need to apply for new PIN numbers. You can apply by phone. Applications can be made by phoning or from 8am-8pm, 7 days a week. Applications by phone can be made with effect from Monday 24 th November. It is taking us a few working days to get this channel fully prepared. Extra agents are being trained to accommodate the expected increase in call volumes. Applications made prior to 19 th November. Over 870,000 applications have already been received to date. It is not necessary for these individuals and households to reapply. Their original registration is still valid. However, any information provided by these individuals that is not now needed will be destroyed. Only relevant information will be retained from these applications. Some households may need an opportunity to amend their details in order to take account of the fact that all children under the age of 18 will now qualify for the child allowance, rather than just those children under-18 in receipt of Child Benefit, as was previously announced. In January 2015, Irish Water will afford households the opportunity to amend their application, where necessary. However, if households have any questions regarding their own registration, they can contact Irish Water on or Lo Call What will Irish Water do with the PPS Numbers it has obtained to date? In compliance with the requirements of the Data Protection Acts, Irish Water will delete PPS data already collected during the customer registration process to protect customers data. Irish Water has developed a protocol in consultation with the Office of the Data Protection Commissioner to address this data deletion exercise. The implementation of this protocol will be subject to independent verification, in accordance with parameters to be established in consultation with the Office of the Data Protection Commissioner. Irish Water has consistently stated its commitment to complying with all data protection legislation requirements and has been engaging with the Office of the Data Protection Commissioner on an ongoing basis throughout the customer registration process. Do I still need to give details of children? If you have a meter, you will still receive an allowance per child of 21,000 litres per annum. For this reason, 5

6 Irish Water is asking households to provide us with the number of children under 18 in the home. However, PPS Numbers for these children are not required. What happens if you don t apply? Under the Water Services (No.2) Act 2013, Irish Water is obliged to charge customers connected to the public water or waste water systems for services provided. Households who do not complete an application will receive a default bill for 260 per annum per dwelling. In addition, such households will not be entitled to the 100 water conservation grant for their primary residence. What reassurance can people get that all customer calls will be answered? Irish Water anticipates that it will receive a high volume of customer calls over the next few weeks and has put in place significant additional resources to deal with expected call volumes. However, in the event that there is an abnormally high level of call volumes above that anticipated, regrettably this may result in callers experiencing delayed call response times. While we have made every reasonable effort to ensure this does not occur, we would like to be open and honest and flag this possibility with you and your members in advance, and respectfully request your patience and the public s understanding in the initial days of dealing with the announced changes. It is important to note again that those who have registered do not have to do anything at this point in time. The registration date is extended until 2 nd February 2015, and bills will not now issue until April Customer Communications In support of these announcements, Irish Water has a range of customer communica tions planned as follows: Website updated with details of the new tariffs on Wednesday 19 th November. Press adverts with details of the new domestic tariff structure to commence Friday 21 st November. TV and radio adverts to commence with effect from Monday 24 th November. 5. Farmers and Mixed Use Premises What is a mixed use premise? These are premises that have both a business and domestic element. The main category of mixed use premises are farms. Other examples would be a small business where the owner may live over the business premise such as a pub or shop. Will mixed use premises be billed for domestic water use? Mixed-use customers will receive separate bills for domestic use and the non-domestic use. 6

7 The charging arrangements for the nondomestic component of the customer s usage will remain the same as operated by local authorities in 2013, until reviewed by the CER. This tariff structure includes an allowance for domestic use, so this usage is not being charged for twice. Mixed-use customers will be charged for the domestic component of their usage based on occupancy. For the domestic component, single adult households will pay a maximum of 160 per year; multiadult households will pay a maximum of 260 a year. Mixed-use dwellings that register with Irish Water will be eligible to receive the 100 water conservation grant. Why are mixed-use customers being billed separately for domestic and non domestic charges? Mixed-use customers are dual customers of Irish Water domestic and non-domestic. Non-domestic bills are still issued by local authorities on behalf of Irish Water, and this will continue until non-domestic customer billing systems migrate to Irish Water. Domestic bills will issue from Irish Water. 6. Group Water Schemes Group water schemes set their own charges and are not regulated by the CER. There are a number of types of group schemes private schemes which have no interaction with Irish Water; and public schemes which receive their water in bulk from public supplies, but manage their own networks and set charges for their customers. These schemes will remain non-domestic customers of Irish Water for the bulk purchase of water and current tariff arrangements, as applied by local authorities prior to 1 January 2014, will continue until non-domestic charges are reviewed by the CER. There are also some group schemes which have no management structures, and have had arrangements with local authorities whereby the scheme members were effectively treated as public water users, with the local authority billing where appropriate and managing the network. These arrangements will continue to be applied by Irish Water unless the scheme members decide to fully reconstitute the group scheme. The Department of the Environment has announced that it will work with the group water sector to produce a new investment programme lasting until the end of 2018 and to revise subsidy arrangements so they are aligned as far as possible with the approach to subsidy for public water schemes, but tailored to the particular circumstances of the group water sector. Should members of Group Water Schemes send an application form to Irish Water? Irish Water is asking Group Water Scheme members to complete and return the application form indicating their water source as a Group Water Scheme. 7

8 Households in the group water sector who respond to the Irish Water customer registration campaign will be eligible for the 100 water conservation grant, which will be payable through the Department of Social Protection. 7. Irish Water as a commercial semi-state Irish Water as a market corporation. One of the key benefits of the establishment of Irish Water as a commercial publicly-owned national utility is its capacity to borrow off the Government balance sheet. This is required in order to fund an accelerated programme of investment in upgrading our deficient water and wastewater infrastructure. In revising the manner in which Government subvention is provided to Irish Water, particular attention has been paid to Irish Water s capacity to act commercially. In this regard, over 50% of the utility s income should come from customer revenue. The classification of Irish Water as a market corporation (therefore off the Government balance sheet ) will be a matter for Eurostat. Raising funds from capital markets. As a market corporation Irish Water will be able to raise funds directly from capital markets. This debt will not form part of the Gross National Debt, which would otherwise be the case if the funding of the water industry remained from taxation. Irish Water is already able to raise debt from commercial banks in addition to continuing to avail of NPRF\Ireland Strategic Investment Fund and other government funding. Investing in the infrastructure. Government is not altering the proposed capital funding of Irish Water, and the level of customer revenue will drive a larger investment programme than could have occurred if water services remained with local authorities. 8. Conclusion We welcome the announcement by Government on the domestic water charges. We hope this gives clarity and certainty to households. Irish Water will now work to incorporate these changes into the Irish Water systems and materials, and communicate the changes to the general public. 8

9 Appendix 1: Domestic Tariff Scenarios Households with 2+ adults 9

10 Households with single adult 10