|Aqueduct||104.84||110.54||115.52||Attributable to Hera: 91% of the bill’s total|
Weighted average on residents for residential customers (family of 3) that use 130 m3 of water a year, considering the bills in the Bologna, Ferrara, Forlì, Imola, Modena, Padua, Pesaro, Ravenna, Rimini and Trieste municipalities. The grey areas show tariff components that are not attributable to Hera.
Since 2012, Arera has been responsible for the regulation of the water service. It first of all set up a provisional tariff method for the 2012-2013 period and subsequently a permanent tariff method for 2014-2015, later updated for 2016-2019. The 2015 tariffs were approved by Aeegsi with resolution 433/2014/R/idr of 7 August 2014; those for 2016 and 2017 with resolution 715/2016/R/idr of 1 December 2016. The tariffs approved in the various years also include the balances from previous years, determined in compliance with the rules of the tariff method.
The cost of water in Italy and Europe
In 2013, the International Water Association carried out research on the drinking water charges applied in 160 cities in 36 countries. In the 104 European cities, the cost of annual consumption of 200 m3/year ranges from between Euro 1.36 and 6.75 per m3. Italy has the lowest cost, with Milan, Naples, Rome Turin, and Bologna (Euro 1.36 per m3) among the cities considered by the analysis.
According to Federconsumatori’s XV National sample survey on the 2016 tariffs of the integrated water service, the average cost in Italy for a typical family made up of three members and that uses 150 m3 of water per year is Euro 1.89 per m3. In the provincial capitals served by Hera this cost is 15% higher (Euro 2.17), but still 18% lower than the weighted average on residents (Euro 2.66 per m3) of the main European cities analysed in the report published by the International Water Association.
Average expenditure for the integrated water service varies among the areas Hera serves since it depends on the specific structure of the water supply sources of the various areas, due to the availability of water resources and to the proximity of the withdrawal source.
The tariff mechanisms developed by Arera since 2012 helped us continue to make considerable investments, particularly for those sectors with a higher environmental impact, such as reclamation from sewage-purification.
In 2016, the portion of the tariff allocated to cover the investments made and to repay capital invested was 27% of the tariff, while the remaining 73% went to cover operating, maintenance and emergency costs for grids and plants and the fees paid to municipalities and asset companies for the use of infrastructures.
The new water service regulation
Arera has been the Italian regulatory agency for water services since 2012. Its initial objective was to define a tariff method capable of supporting (efficient) coverage of costs, of increasing investments and also promoting quality of service oriented mechanisms.
The measures that followed from 2012 onwards were all focused in this direction. In particular:
- from a tariff point of view, 2017 is part of the second regulatory period, when fully operational (2016-2019) which, in addition to confirming the criteria outlined above, initially with the 2012-2013 transitional tariff method and then with the first regulatory period (2014-2015), introduced the important new incentive of contractual quality, requiring minimum service levels but also forms of recognition of levels higher than the minimum required;
- 2017 was also the year in which some important measures were implemented, launched by Arera, on issues already anticipated in previous years. In particular, resolutions were passed on the regulation of water service tariff structures, which in the near future will be geared towards implementing the per capita tariff, recognizing a water bonus for disadvantaged users, and initiating technical quality monitoring by identifying minimum standards and the related reward/penalty mechanisms. These resolutions, adopted during 2017, will take effect from 2018;
- 2017 was also the year in which data collection was started for the first time on the economic and financial aspects of the water service, known as “accounting unbundling”, similar to the activities of the gas and electricity services;
The matter of arrears management is still open, and the final measure is expected from Arera in early 2018.