Consumption thresholds for water prices

TIRANA, April 3 – After water prices in major cities were raised this year, the Water Regulatory Entity has approved a new methodology under which consumers will be charged based on consumption thresholds, a method which is also applied for power billing. Specialists of the Regulatory Entity say the new methodology expected to be implemented in 2013 divides water consumption into four blocks, with the first one having the 4.5 m3 as a threshold, the second 20 m3, the third block 20 to 30 m3 and the final block above 30m3.
Experts say the new methodology will help families facing financial difficulty and prevent water misuse.
Water losses in 2011 remained high at 63 percent, making no progress compared to 2010, data show.
Starting from Jan. 1 this year water prices for household and business consumers in four of Albania’s biggest cities increased by up to 45 percent. The decisions were made by the Water Regulatory Entity (WRE) after proposals by the local water supply and sewerage companies which had applied for much higher increases citing rising service costs.
The major part of the debt state institutions owe to private CEZ Shperndarje electricity distribution operator is a result of unpaid electricity bills by water companies.
In a recently published report, the World Bank suggested that with operating revenues covering only 68 percent of costs, water supply and sewage companies definitely need to raise their drinking water prices to improve their efficiency.
A comparative analysis in the report covering the 2006-2009 period shows the Regulatory Entity (WRE) approved an average of 11 percent increases in water tariffs for 30 companies serving 83 percent of the country’s population, while their total costs rose by 262 percent.
The bill collection rate remains low at 78.3 percent but there are also exceptions such as the southeastern city of Korca where the rate is at 97 percent. Overstaff in water supply and sewage companies remains another issue with an estimated 13.6 people per 1,000 connections compared to 4 employees per 1,000 connections under the EU standards. Political patronage and the complexity of water supply systems are the main explanations for the situation.