Submission to the CER consultation on the Water Charges Plan

Commission for Energy Regulation,
The Exchange,
Belgard Square,
North Tallaght,
Dublin 24.

23rd August, 2014.

RE:  CER/14/363 – Water Charges Plan Consultation

Dear Sir/Madam,

Government policy on the establishment of direct charging mechanisms for water means that all water related assets have been transferred into the control of one entity – Irish Water.  The people of this country have paid for the establishment and maintenance of these water-related assets.  They have paid for the establishment of Irish Water.  They are now expected to pay further for their water use. There will be no alternative supplier of water.

Despite this, the consultation now open applies only until the end of 2016. There will be no agreement on water charges after 2016 arising from this consultation.  The Minister’s direction of 2nd July 2014 is clear that the Water Charges Plan applies for the interim regulatory cycle (1st October 2014 to 31st December 2016). The Minister is equally clear that the direct cost of water and wastewater services to each household as billed by Irish Water is to be maintained for the average household at €238.  Because the cost of providing water services to each household is more than twice this, the government has committed to providing funding to Irish Water until 2016.  At this time, government subsidies for the provision of water are proposed to cease.  The Irish public will have no means of obtaining water other than through Irish Water, regardless of the price per litre imposed.

I wish to highlight at the outset that I am horrified and deeply disturbed at the government’s proposals for provision of water to the Irish people.  Water is essential for life.  I have no difficulty with paying for the cost of providing water services.  Indeed, I already do so through taxation.  I laud the concept of water conservation.  But the actions of this government with regard to the provision of water services are not the actions of a government responding fairly and responsibly to the needs of the people.  These are a knee-jerk reaction to years of bad management resulting in a premature and ill-thought out policy which will impact physically and financially on the Irish people for many years to come.

I have specific comments to make on the CER’s proposals outlined in the Water Charges Plan Consultation for Domestic Customers.  These are outlined under the various headings as provided by the CER as follows:

1. Introduction of Charges – all domestic customers will be charged for their water from 1 October 2014

Domestic customers are already being charged for their water.  Water services cost over €1.23bn to run annually.  Some 75% of commercial water charges are collected.  They bring in about €220 million.  The balance of €1 billion is funded largely by our taxes through Exchequer grants and local authority resources.  With a workforce of 1.8 million (CSO, 2011), this loose calculation suggests that each taxed individual is already paying €556 per annum towards water services.

This is merely a very rough calculation, but no more definitive analysis of the contribution the taxpayer already makes to water services has ever been published or circulated by the government.  It is unjust that further charges for either direct or indirect consumption should be applied in the absence of taking account of what the taxpayer already pays.

3. Capped Charges – all customers will be capped at an assessed charge for 6 months

Irish Water and the CER are proposing that customers’ charges will be capped at an assessed charge for 6 months. During that time, customers will have the opportunity to review their water usage and reduce it where possible.

This proposed 6 month period begins in October 2014.  So households will be reviewing their water consumption between October 2014 and March 2015. There is no way people will be able to get any accurate indication of their household’s typical water usage during this time.  Water use is far higher in the summer than in the winter.  In particular, children use water for recreational purposes during the summer.  Showering and horticultural requirements are also higher during the summer. In fact, Irish Water itself has admitted that there may be “some seasonality to water consumption due to human behaviour” (see Paragraph 4.14.1.).  It is quite unjust to expect people, particularly those with young families, to make any reasonable assessment of their household’s water needs during the winter and early spring period.

5. Metered Charges – €4.88 per thousand litres for both services

The Minister has directed that there is to be no standing, or fixed, daily charge for water, just a unit rate for the litres you use.

But the CER itself has acknowledged (see Paragraph 4.15.2) that water service costs “are primarily fixed regardless of how much water is consumed”.

So why is the Irish householder, who is already paying a fixed price for water through taxation, carrying yet further burden for water service delivery through direct charging based on consumption?

Furthermore, householders cannot be expected to pay a per thousand litres charge when that charge may unpredictably increase in January 2017.  Irish Water itself has admitted that if billing does not result in the forecasted revenue, Irish Water will not cover its costs and the “unit rate [will] be increased for all customers in the next CER price review” (see Paragraph 4.15.2).  Many householders are already struggling to make ends meet.  How can it be ethical to force these same householders into a contract with a single water supplier who can potentially price as high as is necessary to make its business viable?  Water is essential to life, not an optional commodity.  Ireland is a first world country; this is a third world proposal.

It would be far more just and equitable to have that which is already paid towards water services by Irish householders through taxation removed from the annual tax burden and transferred to a direct standing charge.  Then a reasonable water allowance per household based on published and unbiased assessment should be calculated.  At that stage, any household exceeding the nationally agreed household allowance may be charged at a reasonable and predictable rate per 1,000 litres used.  This way, even should that single supplier of water increase the price per thousand litres increase beyond that which is comfortably affordable for some households, at least all households will have a reasonable and agreed volume of water supplied for a comfortable standard of living.

6. Rebates – all customers will be entitled to a rebate if the meter shows that they use less than the assessed charge

Irish Water proposes that customers must be paying an unmetered charge for at least 6 months to qualify for a rebate. That is an unreasonably long length of time.

Irish Water further proposes that a rebate will not be credited until 12 months after the installation of a meter.  Why should one have to wait for 12 months to get one’s money back?  Again, this is an unreasonably long length of time.

I note that Irish Water claims it is essential to wait the full 12 months before rebate so that water usage at similar times of the year can be compared, i.e. to compare “like for like consumption”.  Yet, Irish Water expects the household to gauge its potential annual water use during the 6 months from October 2014?  This is not a level playing field.

Irish Water is further proposing that customers that fail to validate their occupancy details by 31st October 2014 will not be eligible for a rebate.  Who can agree to validate their occupancy details when they do not know what details will be requested?  If, as is claimed by the Minister, the aim of direct charging it to reflect genuine consumption with an ultimate view to water conservation, then ALL households who make an effort to reduce water use should be rewarded, regardless of when and whether they validate their occupancy details.

In addition, Irish Water proposes not to give a rebate to households who change their occupancy status.  Again, this is totally unjust.  So if the mother of a household has a new baby, does this apply?  If a young adult child gets a job and moves out, is that household rendered ineligible for a rebate?  If an elderly parent comes to live with the family of his/her daughter or son, will the welcoming household no longer be eligible for a rebate?

Irish Water’s suggestion is ill-described, ill-defined, uncharitable, impractical and will lead to an atmosphere of deceit as households will inevitably try to make day-to-day living more affordable by shielding change in their occupancy status from a company which clearly regards them as a cash cow rather than as humans.

8. Children are free – all households with children in receipt of child benefit will receive annual allowances to cover the normal consumption of each child.

Irish Water has submitted analysis from its household research on metered consumption to support its Water Charges Plan. Household consumption will be calculated as 66,000 litres per annum for a single occupancy household, with an additional 21,000 litres per annum for each additional adult. Irish Water is proposing to apply the same increment for adults and children.

But the Minister’s policy direction is that each household is to receive 38,000 litres of free water per child, subject to verification through metered consumption data.

The government’s figure of 38,000 litres as being an estimated normal annual consumption of water for a child was derived from the National Water Study and was based on UK data.  The CER advises us that Irish Water considers this report to not be a true representation of consumption of the average Irish child.

Of course they do not!  The more water each Irish person has to pay for, the better it is for Irish Water.  And Irish Water says its claims in this regard are backed up by recent meter readings.  At what houses? How many?  Where?  Over what duration?  With what number and what kind of occupants?  Where was this research work published such that Irish people might assess it for themselves?  Irish people have a right to public display of such research carried out, supposedly, on their behalf.

I am dismayed that the CER, whose stated function is to ensure on behalf of the Irish people that the “prices that Irish Water charges to customers are fair and reasonable” should take the advice of Irish Water over that of the Irish government.  The CER’s consultation paper admits that the ESRI is not happy with Irish Water’s assessment of the consumption of adult and child being equal (see Paragraph 4.5.1).

So why does the CER not take the assessed consumption of a child as advised by the Irish government until further definitive research has been undertaken?  Or at least indicate some measure of support to the Irish people whose interest it is duty-bound to protect by assuming the annual water consumption of a child to be mid-way between the Irish Water proposal and the government proposal?

It is rare that adults take two and three showers each day, as many teenagers do.  It is equally rare that they will play water fights on a hot summers day.  And I cannot last remember when I saw adults playing in a paddling pool in their back garden. Common sense dictates that a child’s consumption of water is greater than that of an adult.  The CER needs to show some defence of the Irish family here.

8. Medical Conditions – customers with medical conditions which require increased water consumption will be capped at the assessed charge for that household even if they have a meter.

It is virtually impossible for people to agree to this proposal without knowing is considered to be a “medical condition requiring increased water consumption”.

I note the CER’s understanding that the “DECLG will work with the Department of Health and Health Service Executive (HSE) to develop a list of medical conditions that should receive a capped bill” (see Paragraph 4.13.2).

Financial constraints on the use of water is terrifying for many with medical needs for above-average water consumption.  Consultation on this proposal is massively premature without definition of what might be considered to be a “medical condition requiring increased water consumption”.

9. Water Quality – where water is unfit for human consumption, affected customers will receive a 50% discount on the costs of their water supply for the duration of the restriction.

What defines unfit in this instance?

Surely, under a scenario such as the government is proposing where water is considered a commodity, it is the consumer who defines what he/she considers “unfit” for consumption?  In this scenario, the definitions of unfit given by either the EPA or the HSE are inadequate.

Certainly, there is little doubt but that water infected by Cryptosporidium or a similar disease-causing micro-organism is unfit for consumption.  But equally, if my family is to purchase water as a commodity, we do not consider water with added fluoride to be of adequate quality for sale. Nor do we wish to be party to prolonging the release of fluoridated wastewater into the natural environment. Why should we pay for a practice we do not wish for?

A similar concern arises in the case of hard water.  Hard water is provided to many thousands of homes throughout the country.  It is true that we are as yet unaware as to whether it has health impacts.  But we are totally aware of the difficulties it causes to those using it, often with significant financial implications.  The water being provided is therefore, whilst perhaps fit for consumption, not fit for the purposes intended, i.e. domestic use. Therefore those to whom hard water is being delivered also deserve a discount on the cost of their water supply.

Please might the CER also address where and how Irish Water will display the analysis of the water it proposes to deliver to each household?  Will such analysis be displayed in real time such that households will have a genuine understanding of the product for which they are to pay?

10. Non-Primary Residences – a minimum charge will apply to non-primary residences

Irish Water is proposing to apply a minimum charge of €160 per year for water and wastewater services to metered and unmetered premises that are not permanently occupied (i.e. €160/year).

Firstly, how does this apply to houses which have been purchased as buy-to-lets?  During the years of the Celtic Tiger, many families upgraded their family homes, keeping their first home as a rental property.  Others put their savings into purchasing a second property, in the belief that it would bring in supplementary income whilst providing a pension for their advancing years.  They were encouraged in this approach by every banking institution in the country at the time.  These are ordinary, middle-class families who have in recent years been penalised in a multitude of respects for what was, several years ago, deemed to be their prudence.  Most cannot sell these second properties now, even though they long to do so.  Will families such as this, who have a second buy-to-let unmetered property, be obliged to pay a standing minimum charge of €160?  Simply because it is a second property?

There may be periods during the year when that buy-to-let property is untenanted and the family who owns the property is trying to cover the cost of its mortgage.  Will they be obliged to pay either additionally or alternatively for water which they are not using?  This would be totally unjust.

Practical questions like these simply have to be answered.

Secondly, this provision will have significant impact on holidaying in Ireland.  Holiday homes in remote places are those least likely to be metered.  The cost of holiday house rental in this country is already high and many families struggle to get any holiday away at all. Most landlords will put the cost of water charges, property tax and other fixed house-related expenses onto the weekly rent of the house.   Landlords will most likely have to budget for recouping Irish Water’s proposed dual service charge of €160 through the 3 summer months, as these are the only guaranteed for letting.  If the landlord carries this cost, his/her income is reduced; if the landlord passes on the cost in weekly rent, holidays will become even less affordable for families.

11. Validation Campaign – all customers are required to complete a validation form to establish your household details

The Guide to the CER’s Water Charges Plan Consultation for Domestic Customers simply states that “Irish Water will be contacting customers over the coming months to gather information on the household type and number of occupants so that they can correctly apply your household allowances. It is important that customers validate their details in time to ensure that they receive their full allowances”.

On the other hand, the full Water Charges Plan document clearly states that “the Social Welfare and Pensions Act 2014 has been amended to give Irish Water the power to collect Personal Public Service Numbers from its customers … Irish Water proposes to request the Personal Public Service Numbers of each child in a household to avail of child allowances and of the registered occupant to avail of the household allowance”.

To not present this information in the shorter, easier-to-read Guide to the Water Charges Plan Consultation is misleading at best.

All households in Ireland deal with utility providers regularly. All householders are used to providing some degree of personal detail for billing purposes.  So most householders would have little difficulty with the description of the validation process described in the Guide.

But never before has a householder had to provide its PPSN numbers to a utility for billing purposes.  This is entirely inappropriate, unacceptable and a breach of the confidentiality and trust that is supposed to exist between the government and its citizens.

It is no excuse to say that allowances are linked to child benefit. If allowances per child are to be granted, then let each household include a copy of the birth certificate of that child in responding to Irish Water’s validation process.  There should be neither requirement nor need to give PPSN numbers to any utility and for any government to amend Irish law to faciliate such disclosure of personal information is for that government to support complete breach of confidentiality.

Additional services

Additional services are described by the CER as being services which “may be carried out at the request of an Irish Water customer that are outside of Irish Water’s obligation to provide water and wastewater services and connections to the public water and wastewater systems”.

Water meters are regarded as compulsory by the government and provided and installed by Irish Water.  I am dismayed to see that if a household believes a meter to be faulty, Irish Water proposes that this household must pay €220 to have that meter checked.  This is simply preposterous and entirely unacceptable.

I am equally dismayed to see the exorbitant rates proposed for Irish Water for site visits.  Many households, often with young families, live in housing estates which were constructed during the Celtic Tiger era.  These estates were often built hurriedly with few spot checks during construction by local authorities.  Water pipes to these houses were often laid poorly, sometimes not far enough underground.  As a result, many families experience freezing and consequent disruption to supply during cold weather.  In my own estate, this problem is extensive and without a pattern. In other words, some households within the same road suffer repetitively from freezing whilst others do not. The extent of the problem has been such that we have done a door-to-door survey, returning the results of the survey to Cork County Council to look for support and a possible solution. The County Council responded, saying that it needed to seek legal advice.  We have had no further response but the problem continues during cold months.  It is particularly difficult to cope with when it happens at Christmas time.

Households such as those in my estate already pay for water services through their taxes, are now required to pay further for direct use of water and relied on government services to ensure the houses they continue to pay dearly for were constructed properly in the first place. To be fair, when pipes freeze in our estate, a representative from the County Council will always call to the door of the affected households to see can he resolve the problem.  But this support will no longer be available now that control of the water infrastructure has passed to Irish Water. Instead, what Irish Water is essentially proposing is that each household affected by freezing will have to pay a minimum of €188 to request assistance.  If the freezing occurs during the Christmas holidays, the household will have to pay a minimum of €282 if it needs help.  The alternative to seeking help is to go without water entirely.

This is simply not right.

I note that the CER states that it has not had opportunity to examine the Irish Water publication A Multi-Supplier Framework for the Provision of Minor Civil Engineering Works to Irish Water.

It is totally inappropriate that Irish Water proposals should be put out for consultation when the CER has not analysed those proposals in advance.  This is the function of the CER – to analyse the Irish Water proposals and to adjust them with a view to protecting the Irish people by ensuring prices are “fair and reasonable”.

My family’s letter to Irish Water

On 1st August last I wrote a letter to Irish Water, simultaneously copying it to the CER.  Irish Water did not respond nor acknowledge receipt of the letter. The CER did respond, inviting me to make a submission to this consultation.  I am therefore including the text of my letter to Irish Water as part of my official response to this consultation:

“Neither I nor my family wishes to have a water meter installed at our house, the address of which is detailed in the contact form. We have never requested a meter, nor have we been asked whether we want one. If Irish Water or its contractors installs a meter at our house without our consent, we will remove it. I am notifying you in advance so that taxpayer’s money will not be yet further wasted in the capital and operational cost of providing and installing the meter.

We choose not to have a meter installed because the government has not laid out charges for water after 2016. If the price of any commodity rises beyond that which we cannot afford, we no longer purchase it. I choose an alternative. But water is essential for life. We will not have a choice in whether we use it or not. If our best conservation measures cause its price per litre to rise, we have no alternative provider from which to choose.

When one pays for a commodity for consumption, one has the opportunity to review the contents of that commodity on its packaging. In 2009, the Department of the Environment instructed water providers to publish up-to-date data on the quality of the water they are providing to consumers. We have never been provided with this data. I, as the mother of my five children, will not pay for a commodity for consumption when I do not know the contents of that commodity.

We will not pay for water which has been fluoridated. We understand that fluoride is of benefit to oral health. But the European Community Scientific Committee on Health and Environmental Risk stated in 2011 that the “effect of continued systemic exposure of fluoride from whatever source is questionable once the permanent teeth have erupted”, while concluding that topical application of fluoride is safer and more efficient in maintaining oral health than the fluoridation of water supplies. We will not pay for a medicated product when we do not desire that medication.

Both my husband and I have paid tax since we started working. We have been paying for water and wastewater services through that taxation. We continue to pay indirectly for water services. The government has clearly stated that Ireland is now moving to a system of charging for water based on usage. We will not pay for water by a system of direct usage until the burden of paying for it indirectly is removed from our tax bill. We therefore suggest that in its proposals to the Commission for Energy Regulation, Irish Water might suggest either a rebate on our tax bill for any monies we might pay to Irish Water or a reduction in our annual level of taxation which can be clearly identified with Ireland’s proposed shift from indirect to direct charging for water.

We presume that Irish Water will respect these requests from us, the potential consumer, both in relation to fluoridation and negotiating removal of indirect water charges from our tax bill. We will then agree to pay a flat rate for water directly to Irish Water. However, I must point out that my family paid €315 in local property tax last year. This was paid on the promise by government that it would fund services provided to us by Cork County Council. That money was not invested in Cork County Council as promised but was used to set up Irish Water. We have therefore forwarded Irish Water a loan of €315. We expect Irish Water to deduct this €315 from our first flat-rate bill and to include acknowledgement that this loan was provided from us entirely without interest.”

Yours faithfully,

Marcia D’Alton
Member, Cork County Council

Mobile: 085 – 7333852
Twitter: @marciadalton