Authority deliver a service when the money is filtered through - PowerPoint PPT Presentation

W ATER C ONSERVATION A WARENESS Kevin Murray Chartered Engineer March 2011

K EVIN M URRAY  Chartered Engineer  Civil & Structural  Ex-Chairman - Cork Region Engineers Ireland  Chairman - Transport & Infrastructure Cork Chamber  Principal - Kevin J Murray & Co Ltd  20+ years experience as a Consulting Engineer  10+ years experience in Water Pricing in Ireland  Non-Domestic Water Metering Programme  Implementation & Guidance Notes

S CHEDULE  Part One:  10:00 Introductions  10:15 Future of Water Services in Ireland  11:00 Open Discussion (Tea & Coffee)  Part Two:  11:20 Manage the Water Bill  11:40 Water Conservation Projects  12:00 Wastewater  12:20 Individual Action Plans  12:30 Finish

T HE F UTURE OF W ATER S ERVICES IN I RELAND - Based on a presentation to the Urban Forum (Jan 2011)

B ACKGROUND  EU Water Framework Directive  National Water Pricing Policy  Water Services Act 2007  River Basin Management Plans  Water Services Investment Program  Local Government Fund  Non-Domestic Water Charges  Development Levies (RIP)  Borrowings

C ONTEXT  Assessment of Water & Waste Water Services for Enterprise - Forfás (Sept 2008)  Capacity  Cost  Quality  Water Conservation ~ Unaccounted-for-water (ufw)  Climate Change  EU Directives & ECJ Judgements  Financial Crisis  Domestic Water Charges (2012-13)

F UNDING THE S ERVICE

W HERE IS THE F UNDING G AP ? Central Government  The Three Card Trick:  How can the Water Service € Authority deliver a service when the money is filtered through Central Government?  To whom does the Customer Water Service Customer complain if the service is poor, if Authority the responsibility is split?  Shared responsibility is no responsibility.  The service provider must have control of the revenue.

W HO NEEDS THE F UNDING  Water Service Authorities  Service Delivery Needs  The Competent Authority  The Construction Sector  40 months of contraction  Projects delayed & jobs lost  The Customer  Finance water efficiency measures  The Regulators  Quality Assurance & Building Control

D OMESTIC W ATER C HARGES  Water Charges without meters first?  Why not?  OFWAT => Only 10 % difference in consumption.  1.2 million properties (public water)  € 500 standard charge; € 300 for low occupancy.  Allow 10% for Administration;  Allow 10% for Social Welfare Assistance. => Annual Revenue of € 384m per annum (Displacement of Exchequer Funding; But Direct.)

D OMESTIC W ATER M ETERS  Procurement & Installation Cost = € 0.5bn to € 0.6bn  Change in Customer Behaviour (10%)  Saving of € 15m per annum of water production costs.  Based on 70:30 Fixed:Variable cost split.  Capture of Customer-side Leakage (50%)  Saving of € 75m per annum of water production costs.  Based on 70:30 Fixed:Variable cost split.  Six (6) years to recover the costs of metering.  Excludes value of deferred capital investment.

U NIVERSAL W ATER C HARGES  Domestic & Non-Domestic  Average or Marginal Capital Costs  One price for water  Postalisation  Abolition of “Domestic Allowance”  No universal free allocation of water!  Streamlined revenue collection procedures  Disconnection Policy

F ULL C OST R ECOVERY  Water charges in Ireland are relatively low.  Germany = € 5.50 /m3; Ireland = € 2.30 /m3  This is not because we have magically become more efficient than the Germans!  Germany seeks full cost recovery; Ireland does not.  IMF – Memorandum of Understanding  Historic Mains Rehabilitation;  Abstraction Charges;  Stormwater Charges.

T HE I NSURANCE P URSE  Who Benefits from Water Meters?  Claims – Subsidence & Property Damage  Due to water loss from leaking pipes.  Solution – Water Meters & Leak Alerts  Catch & Fix the leaks quickly.  Insurance Levy to help pay for water meter installation?  Policy discounts for customers with meters with leak alert facility?

Y OUR F UNDING G AP  The Home Owner also has a funding gap.  Needs financial help to make the home more water efficient; and benefit from cheaper bills.  Water efficiency is a proxy for Energy efficiency  Extend the Home Energy Efficiency grants to include water efficient fittings.  Water Conservation Schemes  Find a way of including the service pipe to the first tap.  The Toilet Scrappage Scheme 2011

P RIVATE I NVESTMENT  PPP Schemes for Treatment Plants  Typically DBO, without the private finance.  Performance assured; but so is the fee.  Is there scope for further private investment?  DBFO might be considered; but the larger schemes have been completed;  Sell public water and waste water treatment assets to the private sector and purchase the service;  National Water Company  The value of the Customer Database

W ATER S ERVICE I NVESTMENT P ROGRAMME  The Construction Sector has suffered from the funding gap more than any other part of society.  The continued contraction of the construction sector demonstrates that the funding gap remains.  WSIP promises € 3.8bn of contracts to start by 2012; but progress has been very slow.  The co-funding issues between Central Government and Local Government must be resolved quickly.

N EW S TRUCTURES

W ATER S ERVICES S TRUCTURES  No lack of ideas for new structures  Some are ideologically motivated;  National Water Authority?  National Water Company?  National Roads & Water Authority? (NRA+)  Commission for Utility Regulation? (CER+)  Regionalised Water Service Authorities?  Shared Service Centres?  National Billing Agency?  Regional Water Management Units?

A BSENT F RIENDS  Economic Regulator  Who audits the price of water?  Customer Representative  Who speaks on behalf of the Customer?  Customer Care Centre  Where does the customer go for information?  Custodian of the Source Water  Who is the custodian of the source water?

I SSUES TO C ONSIDER  If it ain’t broke (too badly) don’t fix it (worse).  Don’t bring water services into an existing organisation as a solution to problems elsewhere.  Scale  If a local authority is too small to dedicate staff to network management, then a larger scale is required.  Should billing be managed nationally;  and customer queries handled locally?  Separation of Powers  Who is the Regulator? [Price & Quality]  Who is the Service Provider?

T HE F UTURE OF W ATER To provide a professional and sustainable national drinking water service with outstanding customer service and well-managed infrastructure.

W ATER I RELAND  National Water Company  State Owned; Commercial Remit; Regulated Monopoly  Developed out of a National Water Metering Operator  Phased adoption of water services assets  Non-regulated international operations  Customer Service Centre  Utility Regulator  Economic Regulator  Service Levels  Single national price for water  Separate Environmental Regulator (EPA)

K EY A TTRIBUTES  Semi-National Water Grid  Top Supply (Shannon) matched to Top Demand (Dublin)  Consolidation of plethora of small town schemes  Unaccounted for water less than 15%  Zero carbon; Zero (non-renewable) energy  Smart Metering; Smart Grid  Local Provision  Chlorinated public water not wasted  Rainwater Harvesting & Greywater Systems  Water efficiency maintains water availability

O THER P LAYERS  Transformed role of Local Authorities  No longer water service delivery  Custodians of the Source Water  River Basin Management Plan Structures  Data Protection Commissioner  The value of the customer data to be protected  Customer Representation  Consumer Council for ALL utilities

M ANAGE THE W ATER B ILL

M ANAGE THE W ATER B ILL  Understand the Water Bill  Conduct a Water Audit  Water In & Water Out  Automatic Meter Reading  Web Displays

T HE W ATER B ILL - P OLICY  In accordance with the Governments Water Pricing Policy, all “non domestic” supplies are to be charged on a metered basis to recover operational costs of water provided and to achieve metering of all non-domestic customers. This is in accordance with the “polluter pays” principle and the requirements of Article 9 of the EU Water Framework Directive.  Water invoices are calculated by means of a metered charge based on the volume of water used. The charge for customers who have a water and sewage connection is based on the basis of the “water in/water out” principle. www.limerickcoco.ie

L IMERICK C OUNTY C OUNCIL (2011) In respect of connections to the Council Water Network and Sewerage System:- € 200 per annum meter charge plus € 2.60 per cubic meter of water supplied. In respect of connections to the Council Water Network only:- € 200 per annum meter charge plus € 1.15 per cubic meter of water supplied. In respect of connections to the Council Sewerage Network only:- € 200 per annum meter charge plus € 1.45 per cubic meter of water supplied to or used on the premises