James Bannon (Longford-Westmeath, Fine Gael)
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874. To ask the Minister for Environment, Community and Local Government the reasons, under section 12 of the Water Services Act 2014, Uisce Éireann/Irish Water was excluded from having to pay commercial rates to local authorities; and if he will make a statement on the matter; and if he will make a statement on the matter. [11340/15]

Alan Kelly (Tipperary North, Labour)
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There were three key elements to the Government's decision in November 2014 on water charges – making the charges more affordable, providing more certainty in relation to the charges and the introduction of a simpler charging structure.

In making the charges more affordable the Government carefully examined Irish Water's operational expenditure. In that context, Irish Water's allowed revenue which was approved by the Commission for Energy Regulation continues to apply, save for the impact of a changed approach to commercial rates for water services infrastructure. Such rates were considered by the Regulator to be an 'uncontrollable' or pass through cost for Irish Water. By introducing an exemption from rates for any land or infrastructure used for the provision of public water services, this pass through cost will no longer form part of Irish Water's operational expenditure.

Local authorities will not suffer any loss of revenue as my Department will pay equivalent amounts to each authority from the Local Government Fund to replace the anticipated income from rates. The total budgeted amount for such payments in 2015 is €59m.