Tariff Application Rules Decision
On 3 July 2019 the Commission for Regulation of Utilities (CRU) published its decision on the Non-Domestic Tariff Framework providing for harmonised charging arrangements to replace the current wide range of charging arrangements on 1 May 2020. This date was deferred as a result of Covid-19 and a new date is yet to be determined. The new non-domestic Framework sets out the ‘rules’ for how tariffs are designed and how non-domestic customers will be transitioned to their new tariffs over time, as well as the new non-domestic tariff rates.
The Tariff Applications Rules Decision published by the CRU on 13 July confirms an approach to tariff policy issues not covered by the CRU’s Framework decision, but which need to be addressed before it takes effect. The Consultation was run by the Commission for Regulation of Utilities and was open for eight weeks from 21 February to 17 April 2020.
The Decisions Paper includes:
- how leak allowances are applied
- rules for assigning connections to a tariff class
For more information on the Tariff Application Rules, please see question and answers below or visit www.cru.ie.
Questions and Answers
The CRU’s decision does not change how leak allowance amounts are applied to customer accounts. Customers will still have the leak allowance applied as a credit to their account as they do currently. The CRU decision includes the following amendments to Irish Water’s leak allowance policy which will come into effect from 1 October:
- Currently there are no time limits on when a customer can notify Irish Water of a leak (provided it occurred since 1 January 2014), or on when they need to fix it. The CRU’s decision establishes that the maximum period over which the leaked volume will be calculated for the purposes of calculating a leak allowance will be limited to the billing period of the bill where the leak was first evidenced, plus a maximum of six months to allow a customer identify the leak and notify Irish Water plus a further maximum of six weeks to fix the leak. The six week period to fix the leak can be extended by Irish Water in extenuating circumstances e.g. if a road opening license is required. The objective is to encourage water conservation by incentivising customers to act promptly in dealing with leaks on their property.
- Customers will now be limited to one self-certified leak allowance per premises for however long the customer occupies the premises. Any further requests for an allowance must be accompanied by a valid plumbers report.
- Leak allowances will only be granted for leaks on the external supply pipe or leaks which occur underground on internal pipework.
- Leak allowance policy eligibility criteria – under the current leak allowance policy there is no specific criterion relating to a customer’s financial history when applying for a leak allowance. The CRU’s decision is that only customers whose accounts are in good standing (i.e. not in arrears) will be granted a leak allowance to both encourage water conservation and promote good customer practice.
It covers the rules for assigning connections to a tariff class, specifically:
- How to treat connections who may consider that the AQ they have been assigned for the next tariff year is not reflective of their expected usage. The AQ which is assigned may not reflect a customer’s expectations of usage over the next 12 months and could result in significant impact on bills.
- How to charge connections that reduce usage and move tariff class. In certain situations customers reducing their usage may see a bill increase if they have crossed a tariffs class boundary.
- How to charge transition connections that increase usage and move tariff class. A connection on transition may change their usage over the transition period, resulting in a different AQ (Annual Quantity). This change in AQ may result in the connection on transition being assigned to a different tariff class. The change in tariff class means that a connection’s transition tariffs will result in the connection transitioning to an incorrect enduring tariff.
A customer on transition that moves tariff class will either be charged the enduring tariffs of the new class or have their transition tariffs recalculated. If the enduring tariffs of the new class result in a bill that is lower compared to its original transition tariff rates (at the same AQ), then the enduring tariffs of the new class will apply.
Transition tariffs will be recalculated by Irish Water in cases where a bill that is higher compared to its original transition tariff rates (at the same AQ). These connections will then transition to the correct enduring tariffs of the new class over the remaining transition years.
Irish Water will contact each non-domestic customer with details of their AQ, tariff band and expected bill impact at least 3 months before the new tariffs are scheduled to come into effect. The implementation date for the new tariffs is expected to be announced on 1 August.
Customers wishing to question their AQ may do so following the receipt of the letter detailing their AQ.
The CRU’s decision relating to the changes to tariff class will come into effect once the Non-Domestic Tariff Framework is implemented.
Changes to the leak allowance policy are scheduled to come into effect on 1 October 2020.