Saturday, 15 August 2015

Water meters - Am I missing something?

"It makes no sense to spend hundreds of millions of euro metering a leaky system" - Brendan Howlin 2011 (before he became Minister for Public Expenditure & Reform) 

Like most people in the developed world we have become mesmerised by the word “conservation”. Unfortunately, here in Ireland, we have applied it to water with the same enthusiasm as others have applied it to endangered species, oil reserves, tropical forests and to water resources in California. 

When it comes to water conservation, we are transfixed to the point where most people fail to apply any rational thought to the reasons for conserving, the consequences of conserving, the ‘benefits’ of conserving, or the cost of conserving. 
Of course water conservation is a good thing, even here in Ireland. However, the only reason we have in Ireland for limiting water usage is to save money. That reason has either been forgotten or there is a misplaced assumption that whatever we spend on conservation measures will be recovered by savings resulting from processing less water. 

Probably the only expenditure which might reduce the cost of water processing is the repair of leaks. Water meters certainly do not qualify. Consider the following facts: 
  • The water meters currently being installed will only impact the 34% of water processed for domestic use. (Irish Water never acknowledges this fact and so most commentators seem to be unaware of it.)
  • Irish Water expects meters to reduce consumption by up to 10%. That amounts to just 3.4% of the total water currently being processed.
  • The Energy Regulator thinks this claim is over ambitious and that 6% is a more realistic figure. This reduces the potential reduction in the total volume of water processed to just 2.04%. 
Based on the above, even before we look at the cost implications, it is obvious that water conservation in the domestic sector is of marginal importance.

I have tried to determine the value of the possible savings resulting from water conservation and, while I cannot claim the following figures are accurate, they are close enough to demonstrate the futility of investing in any serious water conservation measures. 

In 2012 Ireland spent €1.5bn on the provision of water to homes and businesses across the country. Irish Water will agree that 90% of this figure is fixed cost. That means that the actual cost of processing all water is €150m per year and it is only this figure that can be reduced through water conservation. If Irish Water is correct in its assumption on the savings to be made through metering, the actual value is €5.1m per year. If the Energy Regulator is closer to the mark then the potential savings are just €3.06m. 

Once meters are in place they will require maintenance. They will have to be read on a quarterly basis and the readings will have to be processed. They will require a call centre to deal with queries. This will result in ongoing expenditure which will far exceed any potential savings to be achieved through reduced consumption. I haven’t even mentioned the €539m cost of meter installation or the unknown millions being spent on gardaĆ­ and private security when installers are confronted by protesters. 

Government Ministers and Irish Water have given other reasons for installing meters but none stands up to scrutiny.
  • “Consumers should only be asked to pay for the water they use”. Each consumer requires the same infrastructure to deliver water to his or her home. The “the pay for what you use” argument, therefore, only applies to the 10% of Irish Water’s costs which are variable. Massive investment for such fine tuning of water bills cannot be justified.
  • “Meters help in detecting leaks”. I was amazed at how excited Irish Water was about this unexpected bonus – the potential to reduce water processing by 2%. At the same time Irish Water has shown little interest in reducing the known 49% currently being wasted through leakage. As has frequently been pointed out, area metering costs less and offers much greater potential for reducing losses through leakage. (NB. Irish Water prefers to speak about the number of litres saved rather than the percentage. It is, however, misleading to talk of 46 million litres if this is just 2.75%).
  • “Metering, by reducing usage, will delay or eliminate future infrastructure investment”. Irish Water has not attempted to put a figure on this. Instead it is proceeding to plan for a €600m-plus investment to expand the Dublin water supply. In theory the elimination of leaks in Dublin should delay such investment for decades. In any case the potential savings to be achieved through metering the domestic sector will play an insignificant role in future investment decisions.
  • “All other OECD countries do it”. I can only say that those politicians who use this argument should consider a career change. 
There will be those who argue that as we now we have meters in place we should take advantage of them. The problem is that there is nothing to take advantage of. It will cost less to deliver water to Irish homes by ignoring the installed meters than by reading and maintaining them.

With almost all commentators, journalists, politicians and environmentalists accepting the importance of water conservation, I keep asking myself “Am I missing something?”. As I can’t think what it might be, I am left to suspect that none of the said commentators, journalists, politicians and environmentalists has asked his or her self the question “Have I thought this through?”