Payment of Interest on Water Bill

Question

I have a debt to the Mei Barak company [the water company of Bnei Brak], and the debt has accumulated interest. Is it permissible for me to pay the interest?

Answer

One should request that they waive the interest. Many times, they agree to subtract the interest from the bill. If they do not agree, it is permissible to pay and rely on their “Heiter Iska”, along with additional reasoning that it’s not clear whether the debt is a halachic obligation or merely an obligation to pay to the authorities. (Heiter Iska is a document that turns a loan into an investment, thus allowing the lender to charge an interest on it.)

Source

Turei Zahav (Yoreh De'ah, chapter 177, §12).

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