|Aqueduct||110.54||115.52||114.42||Attributable to Hera: 91% of the bill’s total|
Bill of a residential customer (family of three) with a yearly consumption of 130 m3. Cities considered: Bologna, Ferrara, Forlì, Imola, Modena, Padua, Pesaro, Ravenna, Rimini and Trieste (weighted average of inhabitants). The grey areas show tariff components that are not attributable to Hera.
The average bill of a residential customer with consumption of 130 m3 per year went from Euro 282.89 in 2017 to Euro 278.24 in 2018: the decrease was 1.6% in the last year as a result of the application of the tariff adjustments of previous years that have resulted in some territories, particularly in that of Bologna, Imola, Forlì-Cesena and Modena, a decrease in the bill compared to last year.
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 2018 tariffs have been approved by ARERA for each area it serves. The tariffs approved in the various years also include the balances from previous years, determined in compliance with the rules of the tariff method.
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 distance from 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 2017, the portion of the tariff allocated to cover the investments made and to repay capital invested was 28% of the tariff, while the remaining 72% 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.
How much water costs
As well as benefiting the environment, drinking tap water instead of mineral water also saves money: considering an average yearly consumption 1,000 litres for a household of three people and an average price in Italy of Euro 27 cents per litre for certain retailed mineral waters, yearly spending on mineral water comes to around Euro 270 a year. The cost for the same quantity of aqueduct water, meanwhile, would be Euro 2.14 a year (calculated as the 2018 average of the bills in the nine main cities served by Hera). Italy is third in the world for consumption of bottled water with 184 litres of water consumed per capita in 2017, after Mexico and Thailand (Source: Statista The Statistics Portal 2017).
The cost of water in Europe
In 2017, the International Water Association carried out research on the drinking water charges applied in 452 cities in 147 countries. In the 93 European cities, the cost of annual consumption of 180 m3/year ranges from a minimum of Euro 0.78 to a maximum of Euro 7.07 per m3. Italy has the lowest cost with Milan, and among the lowest costs with Naples, Rome, Venice, Palermo and Genoa.
Rgulation of the water service
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, 2018 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;
- in 2018 ARERA continued the measures taken 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 2018, will take effect from 2019.
The matter of arrears management is still open, and the final measure is expected from ARERA in early 2019.