Transitioning Non-Domestic Connections to the new tariffs

The Commission for Regulation of Utilities’ (CRU) decision on the Non-Domestic Tariff Framework came into effect on 1 October 2021. As a result of the new tariffs, bills for some customers will decrease and bills for other customers will increase. To help mitigate the impact, transition arrangements have been developed for those connections facing bill increases of €250 in their annual bill. Those connections that see a bill decrease, or an increase of less than €250 will immediately move to the enduring tariffs.

A customer facing a bill increase of €250 or more for any one of their connections will transition over 3 years to the enduring tariffs. If the bill increase is €750 or more, a 10% cap (if required) will automatically apply to the increase in the annual bill every year of the transition period. The cap ensures the bill, for a given level of usage, will not increase by more than 10% per annum, assuming usage does not increase over the transition period.

In the examples below bills are calculated over the transition period for two customers facing increases of more than €250. We have also published several case studies showing how customers will be transitioned to the enduring tariffs.

Example 1. Three-year transition

In this example a metered connection located in South Dublin using both water and wastewater services has an annual quantity of 450m3 and will see a bill increase of more than €250 in their annual bill.

Services	Metered Water and Metered Wastewater
Location	South Dublin County Council
Annual Quantity	450m3
Tariff Class	Band 1

 

Note: The annual quantity calculates the volume of water supplied or wastewater collected over a prior 12 month period. For more information on annual quantity visit: www.water.ie/businessaq

• Using the South Dublin County Council Local Authority rates (applicable prior to 1st October 2021), this customer’s bill is €1,046.5.
• From the 1st October 2021 the connection will be assigned into metered band 1 as their annual quantity is less than 1,000m3.
• Using the same annual quantity (450m3) the bill calculated using the new enduring rates is €1,794.07 which means an increase of €747.57
• As the increase is greater than €250 a transition path will apply to reach the new tariffs over three years, allowing the customer a period of time to adjust to their new tariffs.

A three year transition gradually increases each tariff component a customer is charged (i.e. standing charge and/or volumetric charge) over a three year period. The graduated increase is designed to reduce bill impact for customers. Each tariff component (standing charge and/or volumetric charge) will increase in equal monetary amounts over this period until it reaches the enduring tariff.

The annual increase for any one tariff component is calculated using the following formula:

Annual Increase = (Final Tariff−Current Tariff)/3

Three Year Transition - Bills

The customer’s bill has increased by a total of €747.50. Assuming their usage does not change over the transition period the customer will be charged on the enduring tariffs in 2023 (a total of €1,794).

In this example, the customer’s current standing charges (water and wastewater) are higher than the enduring standing charges. As the lower enduring standing charges will apply from the 1st October 2021, the customer gets the benefit of these reductions from the start of the transition period.

The volumetric charges will be increased each year in equal monetary amounts landing on the enduring volumetric charges in 2023.

Example 2. Three year transition 10% cap

In this example a metered connection located in Waterford County using both water and wastewater services has an annual quantity of 780m³ and will see a bill increase of more than €750.

Services	Metered Water and Metered Wastewater
Location	Waterford County
Annual Quantity	780m3
Tariff Class	Band 1

 

Note: The annual quantity calculates the volume of water supplied or wastewater collected over a prior 12 month period. For more information on annual quantity visit: www.water.ie/businessaq

• Using the Waterford County Local Authority rates (applicable prior to 1st October 2021), this customer’s bill is €2,175.
• From the 1st October 2021 the connection will be assigned to metered band 1 as their annual quantity is less than 1,000m³.
• Using the same annual quantity (780m3) the bill calculated using the new rates for band 1 is €3,045, which means an increase of €870.
• As the bill is increasing by more than €750 a three year transition is provided to the customer and a 10% cap will be applied.

A 10% cap is designed to limit the bill increase for those non-domestic customers most adversely affected by the new tariffs.

When the 10% cap is applied, tariff components (i.e. standing charges and volumetric charges) are calculated to ensure a connection’s bill does not increase by more than 10% per annum assuming the volume of water used does not increase over the transition period.

Three Year Transition (10% Cap) bills

The above table summarises this customer’s transition path to the new tariffs over three years. It shows the effect of the transitional tariffs on the bill each year. The customer’s bill increases by 10% per annum.

The current wastewater standing charge is higher than the enduring rates, so the customer immediately moves to the lower standing charge. The volumetric charge gradually increases towards the enduring rates. In this example this customer’s connection has not reached the enduring tariffs by the end of the three-year transition period.

The CRU will hold a public consultation on the need for any further transitional arrangements for any connection that has not reached the enduring tariffs by the end of the 3-year transitional period, with a view to minimising the risk of a large step change in tariff levels for these connections when they move to the enduring tariffs.