DEPARTMENT OF PLANNING AND ENVIRONMENT
APPROVE THE DRAFTING OF A WATER RESOURCES (LICENCE FEES) ORDER 2009
Public Item
Purpose of the Report
The purpose of this report is to request that the Minister approve the drafting of a Water Resources (Licence fees) Order by the Law Draftsman.
Background
Under Article 25 of the Water Resources (Jersey) Law 2007 (The Law), the regulator (defined under Article 1 as the Minister of Planning and Environment) may prescribe;
Article 25(1)(a) - ‘charges that shall be payable to the regulator by applicants, licensees and proposed transferees, in respect of applications for the grant, variation, transfer and revocation of licences’.
Article 25(1)(b) - ‘charges that shall be payable to the regulator periodically by licensees’.
In addition, Article 25(2) states that ‘in prescribing charges under this Article, the regulator shall have regard to the amounts that are needed to meet the regulator’s expenditure in carrying out functions under this Law’.
The user pays principle is therefore already accepted by The States under this legislation.
This principle is reiterated in Article 5(1)(c) of the Law which requires that in carrying out functions under this Law the regulator shall have regard to a cost principle by which the costs of managing and regulating the abstraction or impounding of water are borne by the persons who abstract or impound it.‘ Further support for this principal was provided by the Report, (page 8 Financial and Manpower Implications), which accompanied the draft Law (submitted when The Law was adopted by the States on 5 June 2007). This section of the Report stated that it was intended to recover the full cost of implementation of the Law by charging for abstraction and impoundment licences.
It should be noted that whilst the Law specifies that charges can be prescribed for the grant, variation, transfer and revocation of licences, there is no similar provision under the Law for similar charges for the registration of water abstractions that predominantly apply to abstractions for the domestic supplies of households. No charges will therefore be levied on the registration of water abstractions. Again, the Financial and Manpower section of the Report that accompanied the Draft Law stated that households with private domestic supplies will be totally exempt from the licensing provisions of the Law and hence will not be charged.
The Appointed Day for the Law was 1 January 2009, with those sections of the Law requiring water abstraction licences or registrations subsequently coming into force on 1 January 2010. The intervening period is required for applicants to submit applications to licence or register their abstractions, for those applications to be processed and for licences and registrations to be granted. Part of this preparatory process will be the levying of charges for the licences that will be granted and the issue of those licences before 31 December 2009.
Discussion
The Water Resources (Jersey) Law 2007 requires that the overall cost needed to meet the regulator’s expenditure in carrying out functions under this Law will be borne by the user.
The total cost of managing and regulating the Island’s water resources, as required under the Law, has been estimated at £110,044 for the year 2010 (the first year for which abstraction licences are required under the Law). The breakdown of these costs is detailed in Table 1. The total cost includes provision for a limited amount of additional research into the Island’s water resources and data collection to be undertaken during 2010.
A total of 150 applications to licence water abstractions have been received to date. No applications to impound water have been received, this being due to impoundments (dams) that were in existence as at 31 December 2008 being exempt from licensing under Article 12 of the Law. Such impoundments will only become subject to licensing under the Law if altered on or after the Appointed Day (1 January 2009) where the alteration is likely to affect the flow, level in or the character of any source of supply or have any effect on any fauna or flora dependant on any source of supply.
The charges for 2010 are therefore assessed entirely on water abstraction. The charges will be reviewed on an annual basis to reflect operational costs and also the granting of impoundment licences in the future, as new impoundments are constructed and as existing impoundments are modified. Other charges permitted under the Law may be considered in future years as the management and regulatory system matures.
In 2007, at the time when the Law was approved by the States, it was estimated that there would be about 120 water abstraction licences and that charges would range between £50 and £150 per annum, depending on the quantity of water licensed to be abstracted. In addition, it was agreed at that time that Jersey Water would contribute 90% of the total cost in respect of their licences, with the remaining 10% being contributed by the other licensees. Jersey Water will therefore contribute a total of £99,040 with a further £11,004 to be charged to the other licensees.
A larger number of valid applications to abstract water (150) have been received than had been anticipated, meaning that licence charges will be lower than had originally been estimated. The quantities of water to be abstracted per 24 hour period have, in general, been larger than had been assumed when estimating licence costs in 2007. It has therefore been necessary to re-evaluate the charging bands to reflect the range of water abstraction quantities requested in the applications that have been submitted, such that each of the three charging bands contain reasonably equal numbers of licences.
It is proposed that charges on water abstraction licences be levied as shown in Table 2. It is estimated that these charges will result in a total potential income of £11,640 (excluding the Jersey Water licence charge). It is probable that a few applicants will decide not to proceed further with their application when they receive an invoice for the charge, which will reduce the actual income to an amount that approximates to the total estimated cost. It should be noted that it is not intended that the number of licences in each charge band will appear in the final table of charges in the Water Resources (Licence fees) Order.
It is further proposed that applicants will pay the invoiced charges before licences are finally granted and issued, as required under Article 25(5) of the Law.
Conclusion
It is necessary to bring this Order into force by 31 August 2009, in order that invoices for charges payable under the Order can be issued by the end of September 2009 and paid by applicants by November 2009. These timings will permit that licences can be finally granted and issued to applicants in December 2009, to come into force on 1 January 2010.
Recommendation
That the Minister agrees the costs and charges for water abstraction licences as detailed in Tables 1& 2 and requests that Water Resources (Fees) Order 2009 be drafted of the by the Law Draftsman.
Written by: | Hydrogeologist, Department of Planning and Environment |
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Approved by: | Assistant Director, Environmental Protection |
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11 August 2009
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