Regulator releases Draft Decision on Goulburn-Murray Water’s 2016 price submission

Victoria’s independent economic regulator, the Essential Services Commission (the Commission), has released its draft decision on Goulburn-Murray Water’s price submission for 1 July 2016 to 30 June 2020.

“The Essential Services Commission has approved revenue around $25 million – or 5% – lower than proposed by Goulburn-Murray Water,” Commission Chair Dr Ron Ben-David said.

“These savings will flow through to the prices paid by customers – but exactly how, will depend on how Goulburn-Murray Water responds to our draft decision,” Dr Ben-David said.

Dr Ben-David said the decision was made after analysing Goulburn-Murray Water’s proposal and a report from an expert consultant, as well as by listening to concerns raised by customers during public consultation.

“The Commission’s draft decision aims to capture all Goulburn-Murray Water’s Blueprint efficiency savings and deliver lower prices to customers without risking Goulburn-Murray Water’s ability to deliver services,” Dr Ben-David said.

A key issue raised in submissions was Goulburn-Murray Water’s proposal for uniform fees for gravity irrigation across the Goulburn-Murray Irrigation District. The Commission has not approved this change.

“Goulburn-Murray Water proposed to charge uniform fees across all six of its irrigation districts. Our analysis shows common costs in up to five of those districts only, so we have asked Goulburn-Murray Water to come back to us with a revised proposal,” Dr Ben-David said.

“Additionally, we have approved Goulburn-Murray Water’s proposal to rebalance its diversion tariffs to make them more cost reflective, however we have asked Goulburn-Murray Water to introduce the new tariff structure more gradually that it proposed—over four years instead of two years,” Dr Ben-David said.

Also in the draft decision, the Commission proposes to:

• approve changes to service point fees
• approve bulk water charges including increases in smaller basins
• continue with a revenue cap form of price control.

The Commission also approved Goulburn-Murray Water’s proposed service standards and has asked Goulburn-Murray Water to commit to annual reporting on its performance against these standards to Water Service Committees and on its website.

Goulburn-Murray Water must now incorporate the changes outlined in this draft decision and resubmit a revised tariff and price proposal to the Commission by 22 April 2016.