IPART seeks feedback on water pricing proposals: Submissions close December 9
IPART is reviewing costs and prices for water and water-related services provided by Sydney Water, Hunter Water, WaterNSW and the Water Administration Ministerial Corporation (WAMC).
Tribunal Chair Carmel Donnelly said Sydney Water, Hunter Water, WaterNSW and WAMC have submitted detailed pricing proposals which outline their proposed prices for 2025 to 2030 as well as how they plan to deliver customer outcomes.
Sydney Water has proposed bills increase by 18% next year, and then further increases of 7% a year plus inflation, or around 31.5% overall between 2025-2030.
“Each of the water businesses is proposing cost and price increases,” Ms Donnelly said. “IPART’s price reviews will assess whether these proposed cost increases are justified so that customers pay only what water businesses need to efficiently deliver their services to customers.”
“We know people rely on good quality water and wastewater services. We will closely review the pricing proposals to determine whether they promote value for money, are in the interests of customers, and deliver the outcomes customers need and want.’
“IPART will thoroughly examine the proposed costs and prices. We will carefully consider the impacts of the price proposals on household budgets, service standards, the environment, and the economy more broadly. Our review will include examining how water businesses propose to invest in and maintain critical infrastructure, so long term customer needs are delivered,” said Ms Donnelly.
IPART invites stakeholder input on the pricing proposals and encourages community members to review the Issues Papers available on IPART’s website.
“The Issues Papers highlight some key questions we’re keen to hear feedback on including how water businesses have engaged with and understood their customers and communities, their proposed costs and service levels, and customer outcomes, including affordability of prices,” Ms Donnelly said.
“We will consider all comments made through the website and in submissions, and we will hold online public hearings for each proposal between 14-21 November which are an opportunity to provide feedback directly to the Tribunal and IPART staff.”
Submissions are due by 9 December 2024. IPART’s Issues Papers, the pricing proposals and public hearing registration are available on IPART’s website.
IPART also has a dedicated webpage on how to have your say.
IPART will also hold an online public hearing on 21 November 2024 which is an opportunity for all stakeholders to speak directly to the Tribunal. Click HERE to:
- Make a submission
- Register your interest for the public hearing.
IPART will consider all feedback from this consultation, as well as its own detailed analysis and we will publish draft reports with its draft pricing decisions and invite further consultation in March 2025.
The prices set in these reviews will apply from 1 July 2025 for 5 years.
IPART sets the maximum prices that Sydney Water can charge its customers for water, wastewater and stormwater services. These are the prices for most households and businesses in Greater Sydney, including the Blue Mountains and Wollongong.
IPART also sets the maximum prices that WaterNSW can charge for the water services it provides to customers in the Greater Sydney area. Its main customer is Sydney Water, and it also serves 3 councils (Wingecarribee Shire, Shoalhaven City and Goulburn Mulwaree) and about 60 end-use customers.
The following is from a Summary on the Sydney Water and WaterNSW proposals compiled by IPART:
How will we review the prices
Customers should pay only what water businesses require to efficiently deliver the services their customers need. Our aim is to hold water businesses accountable in a way that delivers good short, medium, and long-term customer outcomes.
We have a robust and comprehensive framework to assist us in considering these matters. Our framework focuses on customers, costs, and credibility – which we refer to as the ‘3Cs’. It is underpinned by 12 guiding principles which both IPART and water businesses use to develop and assess pricing proposals. Our Handbook provides further information on our 3Cs framework.
What has Sydney Water proposed?
- Sydney Water has proposed bills increase by 18% next year, and then further increases of 7% a year plus inflation.
- It has proposed a larger increase to its water service charge (fixed charge) than its water usage charge (variable charge). This would affect your bill regardless of whether you use a relatively small amount of water or a large amount of water.
- It has developed 3 outcomes to guide its service delivery for the next 5 years, based on its customer consultation. These are customer experience (including affordability), water quality and reliability, and environmental protection. It has developed 15 targets to track its performance against these outcomes and plans to report annually to customers to hold itself accountable.
- Sydney Water has proposed $16.5 billion in investment over the next 5 years. Almost 60% of its proposed capital investment ($9.5 billion) over the next 5 years is to deliver new services to growth areas across Greater Sydney, including for new water assets and wastewater treatment facilities. It would spend around $6.3 billion to renew existing infrastructure.
- It also proposed its operating expenditure (for day-to-day expenses) will increase by 16%.
- It has proposed to reduce its forecasting risk, by removing a +/-5% deadband when actual water sales differ from the forecasts used to set prices.
What has WaterNSW proposed for its bulk water customers?
- WaterNSW has proposed average bill increases of 14% a year.
- It proposed a 155% increase in capital expenditure, mainly for 2 key projects - Warragamba Dam Resilience ($609.1 million over five years) and Warragamba E-flows ($301.8 million over five years) to modify Warragamba Dam to enable the release of variable environmental flows.
- It also proposed 15.7% increase in operating expenditure, mainly driven by a new operating model, digital costs, employee and contract labour costs, land tax obligations water licencing fees and compliance costs.
- It has proposed moving to a ‘revenue cap’ form of price regulation which means that it has proposed to adjust the variable usage charge each year to recover (or return) revenue foregone (or received) that is below (or above) the allowed revenue for the previous year.