Water Authority Price Submissions for 2023-2028

From time to time, water authorities submit a proposal to the Essential Services Commission for review to justify the amount of revenue they are likely to need in the following period. These proposals usually take into account customer feedback, critically needed capital investments and forecast operating expenses to generate a reasonable charge rate for use of water and wastewater services. Fourteen (14) water authorities recently submitted their proposals for pricing of water and sewer services for the period between 2023 and 2028. Essential Services Commission is now accepting feedback and is tasked to review these proposals against Water Industry Regulatory Order and Commission’s PREMO pricing framework .

A summary of the proposed expenses and billing for this period is shown below.

Based on these proposals, most utilities are looking to increase annual water bills modestly with the most increase in the first year being felt by Coliban Water customers at 1.9% increase before inflation. In contrast, some water authorities intend to reduce their prices sharply in the first year including Gippsland Water (6.16% reduction), GWMWater (7.90% reduction) and South East Water (6.10% reduction). However, some customers, even in these areas with plans for price reductions, may see a nominal increase on their bills after the inflation is taken into account which is currently at 7.3%.

Furthermore, the price of water per kL in the next 5 years in each service area is vastly different. The average price of water over 2023-2028 period per kL is the highest for Westernport Water and South Gippsland Water customers at $14 and $10.5 per kL respectively. Conversely, the lowest average price will be paid in GWMWater and Lower Murray Water areas at $5.61 and $2.34 per kL respectively.

Among the metropolitan water authorities, the race is between Yarra Valley Water and South East Water. The other metropolitan water authority, Greater Western Water was granted an extension last year given the recent merger of City West Water and Western Water to submit their proposals in 2023. South East Water appears to have forecasted sharper price reduction (6.10%) as compared to Yarra Valley Water who has committed to reduce bills by 4.6% in the first year. This will ensure the effects of inflation will be minimal for South East Water customers while guaranteeing a price increase for Yarra Valley Water customers when inflation is taken into account. Likewise South East Water is proposing to supply a more affordable water at $6.25 per kL as compared to Yarra Valley Water at $6.62 per kL.

The current round of public feedback will end on 1 December 2022 which generally attracts comments on the price changes from customers. You can participate and have your say by visiting Essential Services Commission here. The draft decisions by the Commission are expected to be released before February 2023.