I propose to take Questions Nos. 457, 458, 464, 477 to 479, inclusive, 492 and 494 together.
With effect from 1 January 2014, Irish Water is responsible for public water services. The Water Services (No. 2) Act 2013 provides that Irish Water can collect charges from its customers in receipt of water services provided by it. The Act also provides that responsibility for the independent economic regulation of the water sector is assigned to the Commission for Energy Regulation (CER) and the CER has been given statutory responsibility for protecting the interests of customers.
Under the European Communities (Drinking Water) Regulation, 2014, a copy of which is available in the Oireachtas library, suppliers of drinking water are required to ensure that the water supplied is wholesome and clean. Water which is wholesome and clean is defined as water which is free from any micro-organisms and parasites and from any substances which in numbers or concentrations constitute a potential danger to human health, and which meets the quality standards specified in the Schedule to the Regulations. The Environmental Protection Agency (EPA) is the supervisory authority with responsibility for monitoring Irish Water’s compliance with these regulations.
In the event of non-compliance with the quality standards set out in these Regulations, the water supplier will investigate the cause and, in consultation with the EPA and, if a potential risk to human health may exist, the Health Service Executive, ensure that the appropriate remedial action is taken.
The Water Services (No.2) Act 2013 requires the CER to perform its functions in a manner that best serves the interests of the customers of Irish Water. This is similar to the CER’s statutory role in respect of the gas and electricity sectors. I fully expect that the CER will consider compliance with statutory standards by Irish Water in the discharge of its functions.
The Government has decided, following consideration of proposals in relation to the funding model for Irish Water and taking account of the work of the Inter-Departmental Working Group, which was established to advise the Government on the appropriate method for addressing affordability issues which may arise with the introduction of domestic water charges, to provide a free allowance of 30,000 litres of water supplied and waste water treated per annum for a primary residence on a public supply. The Government has also decided to provide for an additional free allowance to cover the normal usage of water services by every child in their primary residence based on the same qualifying conditions as child benefit, such that water charges will in effect only apply to adults in such households. The normal consumption is estimated at 38,000 litres annually per child of water supplied and waste water treated and so the allowance being provided will be up to 38,000 litres per annum. This level of consumption will be verified over time through actual data from metering. There are no plans to provide additional allowances, other than those announced in the Government decision.
I intend to use my powers under the Water Services (No.2) Act 2013 to issue a policy direction to the CER in relation to a number of matters relating to domestic water charges, including to ensure the water charges plan makes provision for circumstances where the quality of water services provided by Irish Water to customers is impaired or where services are reduced or restricted (e.g. customers with boil water notices). I also intend to provide in the policy direction that for social and environmental reasons, there will be no standing charge for domestic customers. Owners of holiday homes who are customers of Irish Water will be required to pay water charges when they are introduced in October 2014; while there will be no standing charge, a minimum charge may apply to properties such as holiday homes which are not permanently occupied. Currently, if holiday homes are used commercially, they are already subject to non-domestic water charges.
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. Irish Water funding will be conditional on the average charge for households being €240 per year.
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 and the policy direction issued under the Water Services (No.2) Act. The tariffs for 2015 and 2016 will be announced by the CER in August 2014. It is estimated that Irish Water will have some 1.35 million domestic customers and the projected bills for different customers will depend on the volumetric charges and assessed charges set by the CER within the parameters of the Government decisions.
The CER has already undertaken public consultations on the development of the economic regulatory framework for water services. It is also carrying out a number of public consultations on the water charges plan. Currently, consultation is taking place on the approach to the design of domestic water tariffs for both metered and unmetered properties and the draft Irish Water customer handbook. Further consultations are planned for June in relation to other aspects of 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).