I propose to take Questions Nos. 395, 396, 409, 411 and 426 together.
The Water Services (No. 2) Act 2013 provides for the transfer of water services functions from the local authorities to Irish Water. The Act provides that Irish Water can collect charges from its customers in receipt of water services provided by it. It also assigns responsibility for the independent economic regulation of Irish Water to the Commission for Energy Regulation (CER) .
Domestic water charges will commence with effect from 1 October 2014 and Irish Water will issue the first bills to domestic customers from January 2015. The approach to charging will be outlined by Irish Water in a water charges plan to be submitted by it to the CER in line with the provisions of the Act. The CER will be responsible for approving the water charges plan which will set the approaches to charging domestic and non-domestic customers.
The CER has considerable economic regulatory experience in the energy sector in relation to price setting mechanisms and customer protection. As part of its water regulatory functions, the CER will undertake a robust analysis of Irish Water’s costs and this will include the use of benchmarking as a method of incentivising efficient business operations. The CER will operate in an open and transparent manner in carrying out its functions and making decisions in relation to the setting of water charges. The CER has already undertaken public consultations on the development of the economic regulatory framework for water services and has indicated that it will be carrying out further public consultations this month. These will include consultation on the approach to the design of domestic water tariffs for both metered and unmetered properties. Further consultations are planned for June in relation to the water charges plan to be submitted to the CER by Irish Water. Full details of the CER’s public consultation plans are available on its website ( www.cer.ie ).
An Inter- Departmental Working Group has been established to advise the Government on the appropriate method for addressing affordability issues which may arise with the introduction of domestic water charges. This includes the examination of issues arising for those with specific medical conditions that require high water usage. The Group comprises my Department and the Departments of the Taoiseach, Social Protection, Public Expenditure and Reform and Finance. The Government will decide on the proposed approaches to be taken in relation to affordability, medical needs and the free allowance, taking account of the work of this group
The CER will announce its decision on the approved water charges plan in August 2014. In making its decision on the approval or otherwise of the first water charges plan, the CER will take into account the decisions made by Government on the funding model for Irish Water. The Government has committed to the provision of a free allowance, above which charging based on usage would apply. The free allowance and the level of funding to be provided by the Government to Irish Water will have a strong bearing on the net charges to be met by households. Consequently, decisions on these matters will provide greater visibility on the expected level of charges in advance of the final determination of all aspects of the water charges plan by the CER. I expect to bring proposals to Government in this regard shortly.