The Malta Independent 20 April 2024, Saturday
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Goldilocks and the three tariffs

Sunday, 23 November 2014, 08:00 Last update: about 10 years ago

A recent article in the Times of Malta of 20 October, entitled "Muscat says Enemalta will clamp down on theft once meters are installed in boathouses", contained the following quote:

"An Enemalta spokesman told Times of Malta consumption would be charged at domestic rates; the middle tier in the ARMS billings structure, more expensive than residential rates but cheaper than non-residential (commercial) tariffs."

Do I, a layperson, know more about ARMS' billing structures than 'an Enemalta spokesperson'?

The domestic rate is emphatically not the middle tier in the ARMS billing structure for residences with more than one resident.

For goodness' sake, ARMS' billing structure is not the story of Goldilocks and the three bears. You do not need to be that numerically literate to see that there are clear rationales behind each tariff which have nothing to do with expensive, less expensive and least expensive. 

The domestic rate is designed for owners of empty second homes or occasionally used homes. The principle is that your consumption will not be high, so you are charged at a rate that is slightly more expensive for the first 33 cubic metres of water and 2 000 units of electricity but after this the cost is extortionate: €5.14 per cubic metre of water instead of €1.40 per cubic metre (at the residential rate) and a more expensive cost per unit of electricity. Plus, you do not get the eco reduction. The greater the number of people, the greater the difference is in cost.

The non-residential rate, as the name implies, is meant for properties that are not residential, that is, designed for businesses. This incurs a more expensive standing charge than the residential rate but the cost per unit is pretty much similar to the residential rate. However, there is no eco reduction on this rate.

The residential rate is the rate everyone living in their primary residences should be paying. There is an allowance of 33 cubic metres of water per person per year. So a family of five would be allowed 165 cubic metres of water at €1.40 per cubic metre per year. The cost per unit of electricity is also lower per unit and there are eco reductions if the reasonable allowance per person of 1 750 units of electricity per year has not been exceeded.

Under pressure from the EU, ARMS ran a series of adverts in the Times of Malta late last year advertising their criteria for eligibility for the residential rate, among which was "The residential tariff is applicable on the consumer's primary residence only." 

And yet, nearly a year after these adverts appeared, nothing has been done to stop the discrimination against tenants. Many tenants living in their primary residences are paying the extortionate domestic rate, some of them totally unaware of this travesty. Our group, Class Action against ARMS, has corresponded with successive ARMS CEOs, Energy Minister Konrad Mizzi, the Auditor General, the Federation of Estate Agents, the Inland Revenue, various estate agencies...  Prime Minister Joseph Muscat was carbon copied in.

And still it goes on.

I submit that ARMS' behaviour in knowingly overcharging tenants for their consumption of water and electricity because 'it needs the permission of the landlord', is unconstitutional, as well as against its own criteria for eligibility for the residential rate, as outlined in the Times of Malta adverts. 

In addition to needing the landlord's permission, there is a new additional barrier for some tenants to get the residential rate. Apparently, ARMS has now decided that if a tenant rents a property from a company, then the company is not able to endorse Form H. What kind of nonsense is this? It really shouldn't matter whether the tenant is renting a property from a private landlord, company or a penguin. They are still living in their primary residence. Why on earth should a tenant pay more while his multiple-property owner and company director landlord pays the residential rate on his own primary residence?

How many EU Directives is this appalling behaviour breaking? 

Does the new CEO of ARMS understand her own company's billing structure, I wonder? Or is she "identifying and managing opportunities of revenue growth" as described in ARMS' mission statement?

Now if that is not a euphemism for "managing state sanctioned, institutionalized theft", I don't know what is. 


Johanna MacRae

Class Action against ARMS



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