Oireachtas Joint and Select Committees

Tuesday, 21 October 2014

Joint Oireachtas Committee on Environment, Culture and the Gaeltacht

Water Tariffs: Commission for Energy Regulation

4:25 pm

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Independent) | Oireachtas source

I wish to pose a number of questions. First, I want to focus on a comment Ms Mannion made earlier to the effect that people with higher levels of water usage can actually tick a box in respect of self-declaration. It must be remembered that we are dealing here with those with disabilities or older people in general. I completed a number of these forms on people's behalf. I was obliged to read the form approximately ten times before I realised where to tick the box in respect of self-declaration. The box appears beside question No. 16, which states "If you would like to request registration forms and information for special and priority services, please tick the box" and "You can nominate a carer or another person to deal with your bill and your correspondence." It is also stated that if a person ticks the box to indicate that he or she wants to avail of these services, Irish Water will send him or her an information booklet and registration form. There is no mention of additional water usage in question No. 16, the box attaching to which is supposed to be the one people should tick if they have extra water demands. Can any of our guests explain in plain English how this can be deciphered in such a way that it means that a person with higher water usage should tick the relevant box? The latter is not what is stated in the double-Dutch question beside which people are supposed to place a tick if their water usage is higher than normal. It is both wrong and misleading to state that people can make self-declarations. What has happened here today is deceptive, particularly in the context of some of the most vulnerable water users in the country.

In the context of the submission I made to the regulator in respect of boil water notices, our guests will be aware that I live in Roscommon and that I am an expert when it comes to such notices. What is the justification for allowing for a 40% discount for commercial users in respect of boil water notices? Let us consider the position of a restaurant, the owner of which will be obliged to foot the additional costs relating to supplying both bottled water and ice and to absorb the hit from a loss of business due to the fact that some customers will not frequent his or her premises if they are obliged to buy bottled water. There is also the negative publicity attaching to the community or town in which that restaurant is located. People will not even visit such a location in the first instance if there are boil water notices in place. The regulator has stated that there will be a 40% reduction for commercial customers affected by boil water notices when the impact on their businesses - particularly those relating to restaurants - could be devastating. Why is there are 100% discount for water in for domestic users who are affected by boil water notices and only a 40% discount for commercial users?

In my submission, I made the point that there should be a 100% discount for both water in and water out. As our guests are aware, Irish Water is of the view that if a boil water notice is going to last for 12 months or less, it will not put in place a temporary treatment facility. In reality, this means that people are being stuck with boil water notices for 18 months. Does the regulator not have a responsibility to ensure that such notices are lifted as soon as possible? The best way to achieve the latter is to put in place financial disincentives for Irish Water and, in fact, to penalise it in respect of water in and water out.

The third point I raised in my submission relates to the position with regard to other water quality issues. There are many other instances in which water quality does not meet the EU standard relating to potable domestic drinking water. No discount or recognition has been provided in the regulations or in the cost structure in respect of this matter. If we are not penalising Irish Water by imposing charges, what incentive is there for the company to ensure that those water supplies which do not meet the EU standard are brought up to scratch?

In the context of the cost structure, our guests made the point that Irish Water does not have an incentive-based efficiency target such as that which obtains in the UK and that, as a result, its cost base is higher. If that is the case, why is it that the cost base relating to group water schemes in this country is 35% lower than that of local authorities?

That is based on a study by Professor Nick Gray of Trinity College Dublin that was published in March of this year. We are told that the full economic cost of water is €594, which works out at €6.82 per 1,000 litres of water. Forty percent of that is leakage, so customers are paying €2.73 per 1,000 litres for leaked water which will not actually come out through their taps. What incentive is there for Irish Water to clean up its act in relation to the leakage?

The cost base that the regulator has set for the domestic water charges is 31%. If that is based on an overall cost of €594, then householders should be charged an average of €184 per annum. Instead of that, the average cost is €225, which is 71% of the overall cost base. Why has 71% of the overall cost base been used, rather than 31% as per the presentation given earlier?

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