The draft decisions present the commission’s initial assessment of pricing proposals from Barwon Water, East Gippsland Water, Lower Murray Water, South East Water, and South Gippsland Water. Collectively, these five water businesses service around one million properties (or 43 per cent of water connections in Victoria).
Under the proposals, from 1 July 2023 to 30 June 2028, typical household water and sewerage bills for Barwon Water and South East Water customers will decrease in real terms (before inflation), whilst East Gippsland Water, Lower Murray Water, and South Gippsland Water prices will rise.
The proposed pricing changes, before inflation, over the five-year period are:
Barwon Water: decrease by around 6.8 per cent (a decrease of around 1.3 to 1.4 per cent each year before inflation)
East Gippsland Water: increase by around 1.5 per cent (around 0.3 per cent each year above inflation)
Lower Murray Water: for urban customers, an increase by around 1.5 per cent (around 0.3 per cent each year above inflation) and generally less than inflation for irrigation customers
South East Water: decrease by around 6.1 percent in 2023-24, then unchanged for the remaining four years before inflation
South Gippsland Water: an increase of around 13.7 per cent (an increase of around 2 per cent per year for two years over 2023-25, then 3 percent per year for the remaining three).
Director of pricing Marcus Crudden said Victorian water businesses must consider the needs of their individual service regions in developing their five-year pricing plans, as well as targeting outcomes that reflect their customer priorities – in particular, managing affordability, service delivery, water security, and local environmental concerns.
“These five businesses are proposing to invest in infrastructure maintenance and upgrades. This is to facilitate continued reliable water services across their regions, and to boost their infrastructure resilience to manage climate change and population growth,” Mr Crudden said.
He noted that in reviewing the pricing proposals, the commission has seen deeper community engagement by water businesses seeking to elevate more customer voices in their pricing proposals.
Some water businesses used deliberative public engagement and demonstrated a greater focus on inclusive engagement including hearing from First Nations people and customers experiencing vulnerability, to inform their pricing proposal. This engagement helped to shape proposed pathways to better support customers facing bill stress or experiencing vulnerability.
“Based on the businesses’ pricing proposals to date, some water prices may decrease for customers before inflation over the pricing period, and some customers may see increases in their water prices over the next five years, above inflation.
“Recognising the impact of this change on customers, and general cost-of-living pressures in the community, we have seen increased focus from water businesses on initiatives to better support customers experiencing vulnerability,” Mr Crudden said.
Mr Crudden said there were strong protections in place for Victorian water customers.
“In Victoria, water businesses must provide payment assistance to households and small businesses. If you’re having trouble keeping up with your water bills, contact your water business and ask for help. This might include payment plans or assistance with applications for utility relief grants and helping customers take up concessions, and tips on how to reduce your water usage. This is in addition to strengthened customer service assistance requirements which came into effect on 1 March 2023.”
The commission invites customers and stakeholders to have their say on the draft decisions. Public forums for each water business will be held in the coming weeks; details will be published on the Engage Victoria website. Written comments and submissions can also be lodged on Engage Victoria until 9 May 2023.
“The Essential Services Commission thanks customers and stakeholders for their submissions and participation to date. We value and encourage feedback on this next stage to help inform our final decision on the 2023-28 pricing proposals,” Mr Crudden said.
The commission’s final decision on each of the pricing proposals is due in June 2023.This sets the maximum prices these water businesses may charge from 1 July 2023 to 30 June 2028, and the key service outcomes that customers can expect over the pricing period.
