Water metering - a trick or a relief?
02 December, 2010
Water metering - a trick or a relief?

Installment of water meters has always been advocated as a panacea for solving the problem of water bill payment for good and all. On the other hand, metering is supposed to make water consumption reasonable and cut down water bills four fold. However the recent tariff hike on water put big question marks over both expectations. Unpaid water bills have been a headache of Georgian government for years.

Tbilisi City Hall, the previous owner of Tbilisi Water Ltd, Tbilisi water distribution

network, was permanently complaining that Tbilisi population is unreasonably wasting water, consuming 800 a liters per capita daily while an average water consumption in Europe amounts to 150-200 liters per capita, and that the municipality is at a loss due to unpaid bills and has to subsidize the water distribution company regularly. 
Government attempted to sell the burdensome assets for several times but without success. Rose Revolution government promised never to divest Tbilisi Water for its social importance. Their understanding was that it could be profitable if individual meters would be installed. That could make consumers to be thriftier [bring down water consumption to the European level] and solve bill payment problem. And under the pretext of commencement the metering process, the government doubled fixed individual tariff from GEL 1.2 per capita to GEL 2.40 in January of 2007. The state budget-based organizations and commercial sector was metered and charged by GEL 4.4 per cubic meter (pcm) that equals 1000 liters. And as a metering program of household had also been launched and scheduled to be through in three years, the household metering tariff was defined as 10 tetri per cubic meter. There were expectations that after metering, water consumption could be cut down from 800 liters per capita to 150-200 liters and households were supposed to cut down water bills four-fold likewise.
However, Tbilisi Water was sold shortly after tariff-hike in 2007. Georgian Water & Power Co., the new owner of Tbilisi water, planned to increase tariff for household to GEL 2.95 from 2010 and maintain it until 2014. However, it did not use this right until recently.
According to Joerg Matthies, Director General of GWP, now company implements serious investments in rehabilitation-modernization of the sewerage system and water supply; also they launch a big project aimed to keep Mtkvari River pure of fecal masses. Moreover, they have an obligation to ensure uninterrupted water supply to entire Tbilisi population in both old and new administrative borders of Tbilisi till 2012 and 2015 respectively. All these require huge investments and GWP asked Georgian National Energy and Water Regulatory Commission (GNERC) to increase tariffs for households.
“All reasonable economic outlays must be reflected in tariffs, otherwise Company will be deprived of a development chance and fail to meet demands of the city and population alike,” Matthies told Georgian Journal. He did not disclose the required investment figure that is already foreseen in the new tariffs.
GNERC found GWP request reasonable and increased both the fixed and meter tariffs for household to GEL 3.15 and 26.6 tetri per cubic meter respectively. New tariffs cannot be changed till 2015 when GWP plans to complete individual metering of households. The further increase is not ruled out after 2015.  Accordingly,  expectations that households can cut down water bills four-fold after the metering vanishes in the air;  GWP seems to be the one who can profit from tariff hike and metering alike, Davit Ebralidze, former energy ombudsman and tariff expert told GJ. 
The trick is that thanks to the increase of metering tariff from 10 to 26.6 tetri, the fixed tariff and metering tariff-related expenses actually equalize if a household really consumes the targeted 150 liter per capita, but meter-related expenses increase if the consumption exceeds this benchmark.
On the other hand, the myth that daily water consumption of Tbilisi makes up 800 liters per capita [24 thousand liter per month] is ruined. Calculation of water tariffs was based on this presumption for more than 10 years. However, GNERC found out [after GWP submitted a tariff-increase request] that daily water consumption makes 400 liters per capita [or 12 thousand liters per month] in fact , Valeri Pkhakadze, Energy Ombudsman of GNERC told GJ.
And since Tbilisi population increased rather than decreased, simple calculation makes clear that GWP [instead of the much trumpeted loss] has been enjoying double profit out of fixed tariffs. The point is that, according to Ebralidze, fixed tariffs based on 800-liter consumption equaled GEL 2.4 [the tariff calculation method multiplies daily consumption on 30 days and calculates the price of monthly consumption based on meter tariffs: 10 tetri per cubic meter in the old case], while real water consumption was 400 liters [may be less actually] and the fixed tariff had to stand at GEL 1.2.
If the metering tariff were not increased, households might really have a relief of the upcoming metering and pay GEL 1.2 approximately per capita monthly instead of the newly fixed GEL 3.15. Now thanks to new tariffs based on 400-liter consumption calculation, households will have to pay GEL 3.15 per capita monthly before metering and at least GEL 3.19 after the metering. Actually expenses will increase for households by approximately 4 tetri after metering will be through.




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