In the next few articles, I will explain how to calculate and thus verify your water and electricity bills (for Maltese residents, commercial and industrial entities). To keep matters as simple as possible, in this article I will only focus on Residential and Domestic billing of water.
At the time of writing, there is very little, if at all, published information about how utility rates in Malta are calculated. The only information available seems to be the tabular list of rates available on the websites of Enemalta Corporation and Water Services Corporation. The media have reported about the many complaints by consumers about their official bills not truly reflecting their consumption. ARMS Ltd, the recently set up company that takes care of the billing from Enemalta Corporation and Water Services Corporation is, at the time of writing, has built up quite a reputation. Hundreds, maybe thousands, have frustratingly wasted hours in long queues hoping for an explanation of their bills, only to be confronted by an understaffed front desk with very little idea of how the bills are actually computed.
I will start with Residential and Domestic billing, since these are obviously the most popular. I will also use the latest rates of course, which are, at the time of writing, the rates that came into effect as of 1st January 2010.
Residential and Domestic Billing
There has been a lot of confusion as to what qualifies as “residential” and what qualifies as “domestic” billing. The “domestic” terminology is a relatively recent one, and its purpose is to differentiate between two types of units:
(i) households (houses, apartments, etc.) in which at least one person resides as a home or place of residence, and
(ii) units which are empty or used as common parts. The former would qualify for “residential” billing, whereas the latter for “domestic” billing. Residential bills are therefore used for houses and apartments in which people live on a long-term basis. The number of persons living in an abode and their details must be registered with ARMS Ltd. The number of persons would then be printed on the official bill. This is very important, because the amount of government subsidy received on your bill depends on it. Domestic bills on the other hand are used for
(a) houses and apartments which are empty
(b) houses and apartments rented out for short lets, such as holiday flats
(c) garages and
(d) common parts of apartments and buildings.
Note that for long lets, residential billing would apply as long as the tenant is registered with ARMS Ltd and the bill is issued in his or her name, rather than in the name of the landlord.
Domestic Billing Domestic billing is, at the time of writing, charged at ?5.41 per unit. A unit is the equivalent of 1 cubic metre of water, or 1,000 litres (weighing 1 ton). The price does not include VAT, but there is no tax charged on water, so the price is final. What complicates slightly the calculation is the fact that we then have to take into account government subsidy.
For domestic billing, a government subsidy amounts to a reduction of ?3.11 per unit on the first 33 units of consumption per year, for an effective price of ?2.30 per unit. Government consumption is not carried forward across periods. So if you do not consume 33 units of water per year, the units not used will not be carried forward to the next year.
If bills were to be sent once a year covering the period 1 January to 31 December, matters would have been very straightforward. Multiple first 33 units by ?2.30, and the remaining units by ?5.41, then add the total. However bills can be issued for seemingly random periods within the year. There is of course an official stance by ARMS Ltd as to the frequency of the periods (every 4 months?), but there are cases of people who haven’t received their bill since over a year.
How do you calculate the government subsidy on a bill that spans any period throughout the year? What we do is first determine the number of units which qualify for government subsidy during that period. Let’s take a simple example.
Billing period is 1 July 2010 – 30 September 2010;Consumption is 30 units of water.So we first determine the number of days that the period spans across. There are 31 days in July, 31 days in August and 30 days in September, for a total of 92 days. Since this bill qualify for 33 subsidised units a year (365 days), how much units should be subsidised in 92 days? Simple proportion. 33 ? 92 ? 365 = 8.32 units. So if our consumption was 30 units, 8.32 units will be charged at ?2.30 per unit, while the remaining units of consumption (30 – 8.32 = 21.68 units) will be charged at ?5.41 per unit. To complete our calculation we have: (8.32 ? ?2.30) + (21.68 ? ?5.41) = ?136.42Not so difficult is it?Residential Billing
Residential billing is calculated similarly to domestic billing, but has slightly different rates and takes into account the number of persons in the household. If you haven’t read the “Domestic Billing” section above, I suggest you do so before going through this section.
As with domestic billing, the rate per unit of water for residential billing is of ?5.41 per unit, and there is no additional VAT charged on it. The difference lies in the way government subsidy is calculated. We can list two differences in fact:
The number of annually subsidised units is 33 units per person. So households with, say, 3 persons would qualify for 99 subsidised units per year;The government forks out a subsidy of ?3.94 for those units, for an effective rate of ?1.47 per subsidised unit.Again we have the problem that billing periods usually do not fall exactly on year boundaries. So the number of units qualifying for government subsidy has to be calculated in proportion to the number of days effectively covered by the bill. Let us take an example: Billing period is 1 July 2010 – 30 September 2010;Consumption is 30 units of water;Number of persons in the household is 3The number of billing days is, as in our previous example under “Domestic Billing”, 92 days. The household qualifies for 99 subsidised units per year (3 persons x 33). How much would the subsidy be for the billing period? Simple proportion again. 99 ? 92 ? 365 = 24.95 units. So the first 24.95 units in the bill will be determined using the rate of ?1.47 per unit, while the remaining units (30 – 24.95 = 5.05 units) will be charged at ?5.41. Completing our calculation: (25.95 ? ?1.47) + (5.05 ? ?5.41) = ?65.47Service Charges (or what are sometimes called “Meter” Charges) Besides consumption charges, your bill will also include a fixed annual charge covering provision of service. For residential and domestic households, the rate is of ?59 per year. However the amount charged on your bill will only be for the part of the year for which the bill is issued. So if the bill is for, say, 1 month, you will only be charged for 1 month’s worth of service charge (approximately ?59 ?12). In our previous example of a 92-day bill, the charge will be calculated using simple proportion: 92 ? ?59 ? 365 = ?14.87.Sinclair Calleja currently works as an ICT Consultant for various clients in Europe and manages his own consultancy company, Progsomnia Ltd. He is also the developer of MyBill Calculator, a detailed tool for Water and Electricity tariff calculation in Malta, and the developer of the The Malta Online Directory. Sinclair holds a Masters in Computer Science and an MBA in strategic management. You can visit his blog at http://sinclairsblog.com/.
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