Increase to maximum interest payable on late water bills
31 May 2022
The state’s independent water regulator has adjusted the maximum interest water businesses can charge customers who don’t pay bills on time, up from 2.9 per cent to 5.3 per cent.
Each year the commission sets the maximum interest rate water businesses may charge customers for unpaid bills, based on up-to-date information on borrowing rates.
Pricing director Marcus Crudden said that the commission’s role provides an important protection for customers that may have missed a bill deadline.
“The state’s water businesses have done a lot over the past couple of years to ramp up support for customers experiencing payment difficulty. Many also stopped charging interest, recognising the exceptional circumstances arising from the pandemic. The rate we set for unpaid bills though, provides an important back-stop to limit any interest charges applied by businesses.
Under rules set by the commission in its customer service code, customers with concession cards and those on a water business’ hardship program cannot be charged interest.
The increase in the maximum interest rate was driven by an increase in the debt risk premium and the risk-free rate.
The new maximum interest rate takes effect from 1 July 2022.