There are a couple of leaks in the ACT Electricity and Water’s pricing regime announced this week. ACTEW took a step in the right direction _ towards user pays _ but there may be a glitch.
From July 1, we will pay for the first drop of water we use. Before we paid a large access fee and the first 350 kilolitres were not charged.
There was no incentive to save water in the average home _ the average home consumes 350 kilolitres.
Under the new regime, those households that use less than the average, will pay less. They will be rewarded for their conservation of water.
However, under present law, water is regarded as a rating matter, not a consumable like electricity. So the bill has to go to the owner of the block. At present about a third of households are tenanted. These people do not see the bill. So they will not cry: “”You kids, stop using so much water”, “”Or, let’s tan-bark the lawn.”
Worse than that, if perchance these tenants do conserve water, the savings go directly into the pocket of the landlord. One of the biggest landlords, of course, is the ACT Housing Trust with about 20,000 tenants. There are about 10,000 other tenanted households.
Clearly, tenants should be getting the bill, just as they do now. Administratively, it would be quite easy, because the same body, ACTEW, runs electricity accounts to these households. Indeed, it would be administratively cheaper to have water bills going to tenants because the water and electricity billing databases would be identical.
If tenants got the bill, they would be rewarded, not the landlord, for savings. Landlords, however, would benefit if the tenant paid the access charge and whatever the equivalent of the old free allowance was. It comes to about $2 a week.
In a transition period this could be rebated from bond money, which is now held in the Office of Rental bonds and the Housing Trust could lower rents.
It is no good having a user-pay system to encourage conservation if a third of the users do not pay. And we need user-pays to avoid the cost and environmental damage of another dam.
But there is another glitch. About 10,000 tenanted households are units. At present, units are not metered individually and most cannot be because the plumbing goes back and forward between units all over the block.
Well, these will have to continue as an exception with flat fees. The cost of metering is too high. But the building code should be changed now, so that all future units are metered separately.
Further, dual occupancies and multi-occupancies are springing up all over town. Under present law, unless the title is split, these are treated as one unit.
It means, no separate water metering for tenants in the second dwelling and no incentive to conserve.
And there is another creepy crawlie under that stone. At present, people are not dividing the title on their dual occupancies until they sell. That way they get two garbage services and two lots of water and sewerage for the price of one. The government is missing out.
Of course, it is going to be difficult to make some of these changes for the long-term good, especially with an election due next year. Already Independent Michael Moore has made some populist, vote-grabbing statements about water which fly in the face of his generally pro-conservation and sound public-finance views.
My guess Housing Trust tenants will not get bills for water (even with appropriate off-sets and rewards for conservation) until at least until after the election and possible never.
The leak in the sensible user-pays regime will continue to drip.