Water draining firms' finances
If you don’t run a business, you might think that water is free in Ireland, writes Nick Mulcahy.
For domestic consumers, water is free, to the extent that households are not billed for the utility.
However, the service has to be paid for, so everyone pays through general taxation on their income and spending, which this year will total €1.9bn.
Business owners pay for their water directly, and since last October they are paying a lot more.
The Commission for Regulation of Utilities (CRU) plays no role in determining electricity and gas tariffs, but it decides how much Uisce Éireann can charge business customers for water.
After a review, the CRU allowed Uisce Éireann to raise water and wastewater charges by up to 35%.
The utility has 188,000 non-domestic customers, and 164,000 have seen their annual bills rise by €250 to €500.
A further 14,000 connections have seen their charge hiked by up to €5,000.
Around 450 high-volume water consumers such as hotels and hospitals have seen their annual water charge increase by €10,000 to €50,000.
Very high volume water users in sectors such as manufacturing, pharmaceutical and brewing are paying €100,000 to €150,000 more for their water consumption and treatment than a year ago.
The massive price inflation prompted IDA Ireland to complain that the elevated tariffs pose a potential threat to Ireland’s reputation as a competitive location for water intensive investments.
The CRU’s rationale for squeezing businesses is to enable Uisce Éireann to recoup extra costs the organisation has incurred in recent years.
The IDA questioned why the business sector should be penalised for governments’ past failures to maintain and upgrade water infrastructure.
In its Strategic Funding Plan 2025- 2029, Uisce Éireann envisaged that taxpayer subvention of domestic water services in the five-year period will amount to €12bn.
That alone would account for most of the €14bn Apple windfall sitting in an escrow account.
By the end of the decade, Uisce Éireann expects the water consumption charges levied on business to keep increasing, from €340m in 2025 to €530m in 2029.
Even with that escalation, Uisce Éireann’s non-domestic outlays are projected to exceed revenue by €1.6bn in the period, which would chew the Apple bonanza right down to the core.
The water burden on business would not be so high were it not for the fact that Ireland is the only OECD country where households don’t pay directly for water.
In its funding plan, Uisce Éireann meekly suggested that a conservation charge might be introduced to discourage excessive domestic water use.
Though this might raise €1m a year towards an annual outlay of about €3bn, the token gesture was immediately shot down by Micheál Martin, the taoiseach.
This speaks to Fianna Fáil and Fine Gael’s political fight over domestic water charges after street protests a decade ago.
Without facing up to the issue, water will continue to be a spiralling drain on the public purse, and business.
The contrast with Scotland is instructive.
Publicly owned Scottish Water pays its own way, and households pay their fair share.
Competition in supply to business is encouraged, with Scottish Water wholesaling water to 22 licensed providers.
The company’s average annual pay is €51,600 compared with €81,900 at its Irish peer.
Uisce Éireann’s funding plan to 2030 is aspirational.
The idea of a conservation charge was shot down by Micheal Martin. Photo: Leah Farrell/© RollingNews.ie
It’s in the mix with multiple other public spending asks in the ongoing review of the National Development Plan.
Uisce Éireann chairman Jerry Grant and chief executive Niall Gleeson have been very vocal in demanding all the money they can get.
The utility’s business customers will be hoping the duo make a persuasive case to Jack Chambers, the public expenditure minister.
Otherwise, water pressure on the commercial sector will continue to mount.
