Water charge changes will cost €64m, says energy regulator

The energy regulator has told Government TDs that it will cost €64m to extend flat-rate water charges for all households in the country for an extra two years.

The Irish Examiner can reveal the relatively moderate extra cost of extending assessed charges for all homes until 2016 which the Government has signalled is now a likely option.

Amid pressure to agree support payments for homeowners, the figure will come as a relief to the Coalition who are struggling to address public anger over Irish Water and the new levy.

The energy regulator yesterday wrote to the Oireachtas environment committee with details of what the cost of extending capped charges will be on top of support already given to Irish Water.

Under the current regime, households will pay an assessed charge from October 1 until the end of next July.

This flat rate means a household with a single adult occupant pays €176 a year with an additional €102 for every extra adult in the household. The cost will apply no matter how much water is used.

But amid huge uncertainty about what larger households will pay, the Coalition wants to lengthen the period where the flat rate applies until more homes are metered and occupants become used to charges.

Details obtained by the Irish Examiner reveal the regulator told the environment committee that extending flat-rate charges for all homes will cost €14.2m for an extra three months, €38.8m for nine months, and €64m for the extra 18 months.

The allowed revenue for Irish Water until the end of 2016 is €2.078bn. Sources familiar with the calculations said the extra amount needed to keep flat rates for two years was “relatively modest”.

Coalition sources say a decision on easing charges for households will be decided the week after next.

A key concern revolves around not breaching state aid rules for Irish Water. It is unclear whether the cost for extending assessed charges for homes will come from the exchequer, from Irish Water’s own funds or from a change in rates.

Any reduction in Irish Water’s spending could also delay efforts to address water quality concerns in areas.

Tánaiste Joan Burton said the Government would soon decide how payments would be eased for the majority of people.

Final charges would be “modest”, she added.

She said Environment Minister Alan Kelly had laid to rest the prospect of people having their supply cut if they did not pay their bills.