Hike in water charges for businesses 'outrageous'

The Cabinet has approved a new charging regime for non-domestic customers due to kick in from May 2021.

Business leaders and a leading Government TD have blasted the introduction of higher water charges for businesses from next May as “bizarre” and “outrageous” and called for them to be suspended for two years.

The Cabinet has, in recent days, approved a new charging regime for non-domestic customers, which is due to kick in from May 2021.

This new four-band tariff system will replace the current system where 500 different tariff levels exist — a legacy of water being in the control of different local authorities.

The Commission for Regulation of Utilities has announced 1 May 2021 for implementation of a new tariff framework for business customers. See https://t.co/MvtZKt84j1 for more.

— Uisce Éireann - Irish Water (@IrishWater) November 2, 2020

However, the move has been fiercely criticised, coming as it does when the country is still in the teeth of the Covid-19 pandemic.

Some 54% of all companies will, according to the Commission for Regulation of Utilities (CRU), see their bills increase. While a majority of those will see increases of less than €250, some will face increases of €5,000 or more at a time when many have been left “flattened” by the impact of the coronavirus.

While the introduction of the tariffs was delayed a year because of Covid-19, the plan to proceed from next May has been “welcomed” by Irish Water, but slammed by business owners.

Government TD and businessman John McGuinness said the introduction of the charges increase is “outrageous”, and reflects how out of touch the Cabinet is with small businesses.

Speaking to the Irish Examiner, he said: “These charges must be suspended for at least two years in order to allow businesses get back on their feet. 

"Businesses and small businesses who fund Irish Water can’t again be the easy target. This will cause consternation among an already-battered sector.”

Irish Restaurants Association CEO Adrian Cummins concurred, and called for the increase in the charge to be suspended for up to 24 months, saying his industry is already “flattened".

“I got an email in from Irish Water,” he said. "Obviously, our industry is economically flattened. Now is not the time to be increasing flat costs like water when we are effectively closed. 

"They should be waived, especially for hospitality. When you talk of increases in charges, the Government needs to pause for 18 months to 24 months."

He also was critical of the “toothless” regulator, which he said has done little for his members and has “pandered” to the large utilities.

Director of corporate affairs at the Cork Chamber of Commerce, Thomas McHugh, described the decision to go ahead and impact “fragile” business sectors as “bizarre”.

He said that while there is merit in simplifying the charges regime, the timing of this move is highly questionable. 

“The timing of this, which will have a negative impact on 54% of businesses, is not appropriate,” he said.

Defending the approval of the regime, Tánaiste Leo Varadkar’s Department of Business, which is mandated to protect the interests of companies across the country, said there are currently 44 separate tariff regimes and these changes are being brought in to harmonise the charging regime and make sure all businesses across the country are treated equitably.

The department has advocated extensively that the new charges must consider the competitiveness implications for business, it said.

Irish Water’s Yvonne Harris said that the utility is cognisant of the challenges faced by businesses at this time, and its aim is to ensure that every business across the country is provided with a clear, transparent, equitable charging regime, regardless of location.

Irish Water said connections that see an increase of €250 or more will be gradually transitioned to the new tariffs over three years. For connections that will face an increase of €750 or more, Irish Water will automatically apply a 10% cap to their annual bill increase in any one year.

The CRU has said it was considered vital that advance notice of several months should be given to customers.

The CRU felt that any further delays would limit the positive benefit to smaller business customers who will experience a bill decrease under the new arrangements.

The new tariffs encourage water conservation and will mean lower bills for many businesses forced to use less water due to Covid-19 restrictions, as the new tariffs will lead to bills that better reflect their reduced water consumption, it stated.