Dáil Éireann Debate, Tuesday - 7 October 2014
541. Deputy Michael McGrath asked the Minister for the Environment, Community and Local Government the financial implications for Irish Water if domestic consumers were not to be charged for water use; and if he will make a statement on the matter. [37933/14]
View answerDomestic water charges commenced with effect from 1 October 2014 and Irish Water will issue the first bills to domestic customers from January 2015. The approach to charging was outlined by Irish Water in a Water Charges Plan (WCP) submitted to the Commission for Energy Regulation (CER) in line with the provisions of the Water Services (No. 2) Act 2013.
Following a recent consultation process the CER announced its decision on the Irish Water WCP. The amount billed to domestic customers for the year 2015 based on the charging structure announced will be in the order of €300 million. A key component of the strategy to establish Irish Water is that Irish Water will be classified as a Market Corporation under EUROSTAT rules and as a result, will not, other than in relation to Government operating subvention, be included in the calculation of the General Government Balance (GGB). The Market Corporation Test is a requirement that income from customers be greater than 50% of production costs.
If this test is not met, then Irish Water’s borrowings would be considered as part of the General Government Debt. This would have implications for the overall fiscal policy and would significantly constrain Irish Water’s capacity to accelerate necessary investment in public water infrastructure. The funding model, based on the introduction of domestic charges, provides for more sustainable funding for the sector for the future and will allow Irish Water, like other commercial State bodies, to access capital for investment from commercial lenders.
