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Water Charges Administration

Dáil Éireann Debate, Wednesday - 12 June 2013

Wednesday, 12 June 2013

Ceisteanna (3)

Thomas Pringle

Ceist:

3. Deputy Thomas Pringle asked the Minister for the Environment, Community and Local Government if he foresees a reduction in commercial water rates under Irish Water in view of the fact that the local authorities have been operating the polluter pays principle in relation to commercial water rates for many years and full cost recovery for the supply of water to commercial users; and if he will make a statement on the matter. [27066/13]

Amharc ar fhreagra

Freagraí ó Béal (7 píosaí cainte) (Ceist ar Environment)

The water sector reform implementation strategy, which is published on my Department’s website, is focused on ensuring that appropriate policy and legal frameworks are put in place for Irish Water and the water sector. A key objective is to rationalise the cost of the current service delivery and ensure more efficient operation of water services by moving from 34 water services authorities to a single body. Following enactment of comprehensive legislation later this year, Irish Water will, therefore, become the water services authority from 1 January 2014.

The Government has decided to assign responsibility for the economic regulation of the water sector, including the setting of charges, to the Commission for Energy Regulation. It will be a matter for the Commission for Energy Regulation in due course to satisfy itself on the appropriateness of costs incurred in the operation of Irish Water as part of the process of setting the tariffs for both the domestic and the non-domestic sector in the future. It is envisaged that the commission will engage in public consultation as part of this process. A key role for the regulator will be to protect the interests of all customers and to drive efficiencies in the water services sector.

It is very difficult to divine whether there is an answer to the question in that reply. I asked whether the Minister foresaw a reduction in charges to commercial water users under Irish Water. The message is being given that commercial users will see a reduction because domestic users who have had water free for so long will now be paying. I do not believe this will be the case. As the Minister knows, the local authorities have been operating for many years on a full cost-recovery basis in the charging of commercial users and have also operated under the polluter pays principle in certain water charges. This means that the supply of water to commercial users in local authority areas is fully paid for by those commercial users, and therefore it will have no bearing on the cost of providing water to domestic users or related charges. In my view, the commercial users will not see a significant reduction. I am interested to hear the Minister's views.

I know that Deputy Pringle has a very detailed knowledge of this work arising from his former employment. It will be a matter for the Commission for Energy Regulation to assess charges and to examine what is happening in the water-in, water-out system and whether it is being implemented by the local authority system, which will become part of Irish Water. Therefore, I am unable to answer Deputy Pringle's questions. However, I hope that all people currently being charged for water, whether in the commercial sector or the group sector, will be able to pass on to all other sectors in the domestic area the sense of urgency that is required in order to show how we can achieve a reduction in water consumption. We must realise that water is a finite product and that the cost to local government is high. We must reduce the cost to local government and be able to reduce commercial rates and lower costs for business. Equally, there is a requirement for additional capital investment and, in my view, this will not be available from the public capital programme in the next few years. We do not have the money, so it will need to be sourced from the private sector. This can only happen when we have a stream of investment income.

Given that the Commission for Energy Regulation will be setting the tariffs in the future, one of its roles will be to look at the cost-effectiveness of the service level agreements.

Will it be within the remit of the Commission for Energy Regulation to consider the liberalisation of the provision of water services across the country?

Will the Deputy clarify to what liberalisation he is referring?

When service level agreements come up for renewal, will the Commission for Energy Regulation seek to tender them?

No. Water services will continue to remain the preserve of the public utility company, Irish Water. We have learned from the previous experience with Eircom and the difficulties its sale created in service provision. Certainly, the Government does not intend to do anything other than to enshrine in legislation the need to keep public resources such as water, an essential resource, in public ownership. The liberalisation of services under service level agreements does not come into play in relation to this as far as the Commission for Energy Regulation is concerned.

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