1. New Decade - New Challenges Annual Conference September 2010 Water Services Training Group 14 th Annual Conference New Decade – New Challenges 9 th September 2010

2. New Decade - New Challenges Annual Conference September 2010 Water Metering & Charging Ivan Grimes Principal Officer DEH&LG

3. Water Charging - Policy  Domestic water charges were abolished in 1996 and Water Pricing Policy was agreed by Government in November 1998  Policy requires local authorities to recover the cost of providing water services from the users of these services, with the exception of households using the services for domestic purposes.  WPP provides for full cost recovery without profit, with charges based on actual metered consumption.  Cost includes elements of infrastructure provision including meter installation and operation and maintenance costs and varies from authority to authority. New Decade - New Challenges Annual Conference September 2010

4. Water Charging – new policy?  Renewed Programme for Government (October 2009) includes a commitment to introduce: “charging for treated water use in a way that is fair, significantly reduces waste and is easily applied. It will be based on a system where households are allocated a free basic allowance, with charging only for water use in excess of this allowance. In keeping with the allocation of greater responsibility to local government, Local Authorities will set their own rates for water use.”

5. Water Charging – new policy?  In December 2009, Minister Gormley announced that Government had agreed to the preparation of legislation to remove the prohibition on charging domestic users for water services and to provide a legal framework for local authorities to charge for water and waste water services above a free allocation.  Minister also noted his intention to bring forward detailed proposals for a programme of metering for households on public water supplies.

6. Domestic charges – current position  Minister has indicated that proposals for the installation of meters in households on public supplies are being finalised  Proposals to be put before Government  Objective of metering will be to encourage households to save water  Complementary to the investment in conservation under new WSIP

7. Benefits of Metering - Theory  Metering will require substantial investment so it must be worthwhile  Metering should enable customers to moderate consumption and thereby reduce amount they pay in charges  Metering should improve the capacity of the water authority to manage the network thereby reducing operational costs and asset replacement costs

8. Benefits of metering - Reality  UK Walker Report noted average 10% reduction in household consumption when metered and a further 5% in reduced customer side leakage  Substantial reductions in household consumption on Group Water Supplies which have been metered  Non-domestic sector – increased awareness of cost of water and interest in water-saving and harvesting technologies

9. OECD Environmental Review 2010 Notes that the absence of metering;  Gives households zero incentive to save water  Perpetuates users’ low awareness of use and costs  Creates inequities between households  Exacerbates lack of incentives in planning and building to focus on water economy

10. Metering - summary  Government decision required  Challenges of implementation – funding, installation, customer data, customer service  Benefits – improved management, short and long term savings, reduced strain on water resources, reduced CO 2 emissions.

11. Charging – comparisons  Average combined charge for non- domestic sector in 2010 is €2.32 per m 3 (ranging from €1.49 to €3.04)  Average combined charge for non- domestic sector in 2009 was €2.29 per m 3 (ranging from €1.49 to €3.04)

12. Charging – other EU states (2008) Austria - €2.57Finland - €2.45 Sweden - €1.60Netherlands - €1.72 France - €2.93Germany - €3.73 England - €3.94Denmark - €5.81

13. Charging – full cost recovery?  Abstraction controls?  Costs of monitoring, inspections, etc.  Capital cost and depreciation  Cost of compliance (waste water discharge licenses)  Collection rates  Delivering a quality customer service  Engagement with schools – can this be repeated with other water users?

14. Charging – future challenges  Cost recovery in a weakened economy  Non-domestic – collection rates  Domestic charges – overcoming resistance  Implementing (and funding) measures in RBMPs  Reducing leakages from distribution network  Understanding and explaining the economics of water