Water Charges – How Much Will They Be ?

Domestic water charges are due to  be introduced in Ireland from October 2014.  The first bills are due to be sent out in January 2015.

A new semi-state company called  Irish Water (Uisce Éireann) is going to be  responsible for installing waters meters and billing.

So – How Much Will the Water Charges Be ?

The actual rates of water charges will be set by the CER  (Commission for Energy Regulation)  and we should get some figures from them in mid 2014.

The approximate  cost of providing water services in Ireland in 2010 was  €1.2bn.  Business users are already paying water charges of  about €200 million – which leaves a nice round €1 billion for domestic water.
If this amount of €1 billion was required to be collected in domestic water charges – that would mean an annual average charge of about €740 Euro (based on 1.35 million homes connected to the public water system) .

There will be 2 components of the water charge – a charge for water going in and  a charge for wastewater going out. If a house has it’s own waste water treatment system or septic tank – then they will not be charged the wastewater/sewage component. (Don’t forget you are supposed to have registered your waste treatment system)

A recent IMF review of  Ireland (Published December 2012) mentioned that in 2015  the Irish government expect to get €500 million annual revenue from water charges . That would equate to an average annual water charge of around €370 per household. (Based on 1.35 Million Households)

There are almost 2 million dwellings in Ireland  – with about 1.65 million occupied . Of these approx   200,000 having a private water source.  It’s not clear how vacant homes will be charged for water – but if they aren’t charged something – it will mean a bigger charge for everyone else.

Eventually the majority of households will have water meters installed – so each household’s  final charge will depend on the water usage. There will probably be an annual ‘free’ annual allowance of water for each household , after which metered charges will apply. We expect there will be a fixed annual  “standing charge” for all homes – similar to that on gas and electricity.

For those homes where meters can’t be installed (about  300,000 )  – householders will have to pay a flat-rate ‘assessed’ charge based on average usage in similar homes.
Water meter installation won’t be completed by the time billing starts – so there will be hundreds of thousands of  homes that will have flat rate water charges based on “assessed”  water usage “.   The calculation of an “assessed charge”  will probably require information on occupancy and/or the size of the property. None of this data was collected for the Property Tax – so it will be a big and complex exercise to collect this data for a short term water charge.

The actual figures for water charges are expected to be published  later in 2014 – but it looks like we can expect average charges of at least  €370 . Larger households that use more water will pay more than the average .

For comparison – in the UK – average water bills are £355 a year for metered homes (about €415 Euro) .

Background to Water Charging

The introduction of Water Charges has been on the cards for a few years now.  Ireland is the only OECD country which does not currently charge households directly for water usage. The Commission on Taxation  recommended introduction of water charges back in 2009 and water charges were promised by the Fianna Fail / Green Party government  in their 2010 “Four Year Recovery Plan”  – (along with a property tax).

The IMF are very keen on the introduction of  water charges – it was one of the items in the  Memorandum of Understanding that accompanied the bailout.

The EU are also chasing Ireland to implement charging for water because of  the Water Framework Directive  . This EU directive  required Member States to ensure, by 2010, that “water-pricing policies provide adequate incentives to use water resources efficiently and to recover the true costs of water services in an equitable manner“.