It is feared the annual water bill could rise to twice what was originally estimated.
According to the Irish Independent, an expert group set up by Government says the cost of providing water to homes could cost in the region of €450 to €500 annually.
Householders have been told that the first bills - which are due in January 2015 - will average at €240.
It is now believed that the cost of providing water will rapidly increase over the coming years to almost double that amount.
The final costings will be made public by the Commission for Energy Regulation by August.
Once in place the Department of the Environment says charges will not rise before 2016.