Water charges for many businesses are set to double after the Commission for the Regulation of Utilities (CRU) lifted its Covid-related suspension of new national rates.
Irish Water is writing to companies to inform them of new charges taking effect from October 1 under a new tariff system for non-domestic users that standardises pricing across the country.
Under the old charging regime, which was in force before the formation of Irish Water in 2013, businesses were charged under 54 different local authority tariff regimes.
More than half of the 184,000 businesses and organisations affected will have to pay hundreds of euro more every year, with some ultimately facing increases of two times the current rates or more.
Around 300 big water users will be getting price hikes of €5,000 and up, but most SMEs are looking at increases of €250 or less in the first year. However, that will gradually rise to the full price after a three-year transition period.
Intel, the US chip manufacturer with a major operation in Co Kildare, is expected to pay as much as €14m after the new regime comes in.
The new charges come as many small businesses are only starting to get back on their feet after a year-and-a-half of Covid restrictions.
SMEs are facing numerous cost rises in the coming months as the Government begins to withdraw its Covid supports.
The waiver on commercial rates comes to an end on September 30, the first bills on warehoused tax will be issued before the end of the year and state payments for wages and lost revenue will come to an end for most businesses by December 31.
At the same time, other costs such as wages and energy are going up, with all gas and electricity providers having raised their prices since April.
“We are very disappointed to see the direction Irish Water is taking with this,” said Neil McDonnell, the CEO of small business lobby group ISME.
“Effectively, small businesses are seen as the soft touch for extracting cash by utilities. It is unlikely that increased water charges on their own will prove the demise of any business, but there is substantial inflation in input costs at present, especially energy.”
The new charging framework was scheduled to come in to force in May last year, after a long consultation process came to a close in 2019, but the Government postponed its implementation in March last year as the Covid-19 pandemic swept through Ireland.
Last November, it was decided to push through the changes for May this year, but once the third wave of coronavirus took hold in January, that date was delayed.
The CRU decided in March that with the reopening of the economy due this summer, it was appropriate to bring in the new charges for October.
Irish Water said businesses due to get increases of more than €250 can avail of transition arrangements that gradually raise prices over three years.
Those with hikes of €750 will automatically have their bills capped with a maximum increase of 10pc a year.
Not all businesses are facing an increase in water costs, as 46pc were already paying more than the new standardised tariff and will see reductions in their charges.
The new system applies nationwide and sorts non-domestic users into separate bands based on usage, with the biggest users paying most.
Source – The Irish Independent