Stephen Donnelly (Wicklow, Independent)
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144. To ask the Minister for Environment, Community and Local Government further to his announcement of an average annual household bill for water of up to €240, if he envisages that this figure will be inclusive of VAT; and if he will make a statement on the matter. [24996/14]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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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 that the water charges plan to be prepared by Irish Water is subject to the approval of the CER. The CER has recently completed a public consultation on the approach to the design of domestic water tariffs for both metered and unmetered properties. Further consultations are planned 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:.

The CER will be announcing the approved water charges in August 2014.

The Government recently agreed to the provision of an average annual operational subvention of €537m in 2015 and 2016 to Irish Water, on condition that such funding shall be used to ensure that the average annual tariff to end 2016 for the average household for combined water supply and waste water treatment does not exceed €240 per annum , subject to final assessment by the regulator CER.

I have indicated that 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 any conditions attached to the Government funding to be provided to Irish Water. As required by the Act, a draft of the policy direction has issued to the CER and the Joint Oireachtas Committee for the Environment, Culture and the Gaeltacht, and has been published in Iris Oifigiúil. The draft direction is currently open for public consultation and details are available on my Department’s website:

The VAT exemption which previously applied for supplies of water by local authorities will also apply to supplies of water by Irish Water to both its domestic and non-domestic customers.