Got this interesting email just now from City Bin. It seems reasonable, but my waste charges are relatively small, so I haven't really followed the issue.
Brendan
There has been an enormous amount of confusion and misinformation around the pay-by-weight issue. Customers are upset with the new charging system and waste contractors are upset with the government. We are deeply sorry that events have unfolded in this manner, and we too are totally frustrated with the situation.
However, to try and add some clarity to the debate, please take a few minutes to read the points below. They may shed some light on the situation.
- Nobody likes paying for the guy next door but this is exactly what has been happening with household waste collection in this country. Through the ‘flat fee’ charging system, a household producing 1.5 tonnes of waste is paying the same as the household producing 0.75 tonnes of waste. There are far too may low users currently subsidising high users and, under pay by weight, these high users cannot receive lower bills without dramatic behaviour change and this won’t happen overnight.
- The previous minister’s statement (made a few weeks before the election) that 87% of households would see reduced bills is mathematically impossible without further subsidisation, either from the taxpayer or the waste collector. The analysis supporting this statement did not include current prices in the Dublin market. Waste collection charges in Dublin are, on average, 25% less than the rest of the country. As well as the cross subsidisation going on within Dublin through flat fee pricing, there is also cross subsidisation with customers outside Dublin. With pay-by-weight, more people outside Dublin will see their charges go down as they currently pay market rates. That’s just a fact because prices in Dublin barely reflect the fixed cost element.
- The minimum charges per kilogram do not come near meeting the actual costs of disposal. Gate fees at disposal sites are higher than 11c per kilogram for landfill waste and the 6c per kilogram for organic materials. Although the minimum charge for the green bin has been removed from the legislation, waste collectors have to pay to get rid of recycling. The idea that waste collectors get paid for recycling is a common myth. Saying that recycling should be free is like saying that electricity generated from wind farms should be free.
- The cost to manage your waste goes way beyond the cost of disposal. There are trucks, bins, salaries, fuel, tax, depots, administration etc. etc. The majority of this is captured by the service charge. There has always been some form of a service charge element in the pricing structure. This is not new. Under pay-by-weight the service charge is separate.
- There are three reasons why a household’s bill could go up with pay-by-weight. The first is if the household produces more waste than the average household. The second could be if the household doesn’t currently use the green and brown bin optimally. The third is where the household may be producing average or even below average waste but are on a legacy flat fee or per lift pricing plan where this plan doesn’t cover the cost of providing the service and hence is a beneficiary of the current cross subsidisation. Pay-by-weight brings these anomalies to the fore.
As I mentioned above, the 87% claim was incorrect and unhelpful.
Under pay-by-weight there is no mechanism for continued cross subsidisation. Bills will certainly go down for many households around the country and those who benefit most are those that (a) reduce the overall amount of waste they throw out through prevention and re-use, and (b) maximising their recycling efforts through proper use of the brown and green bins.
Finally, from our analysis, we believe that, on average, under the new legislation roughly one third of bills will go down, one third will stay in or around the same and one third will go up. Over time, the households whose bills initially go up will start to climb back down as they reduce output and use the three bins properly.
We have no control over this legislation and, at this point, we have no idea if it will go ahead. As soon as we have clarity on the situation we will provide you with an update. The City Bin Co. have always set their stall out on service and this is where we excel.
Thank you for taking the time to read this.