Regulator releases draft decision on Melbourne Water’s prices

The Essential Services Commission has released its draft decision on how much Melbourne Water can charge for water, sewerage, waterways and drainage services over the next five years, starting 1 July 2026.

Melbourne Water is a wholesaler that supplies water and sewerage services to metropolitan retailers and water to some regional retailers, who then deliver services to homes and businesses. Melbourne Water also maintains waterways and drainage services, which form part of household bills for owner occupiers.

The draft decision allows Melbourne Water to invest $7.3 billion in essential sewerage and drainage infrastructure. This is 7 per cent lower than Melbourne Water’s proposal but represents a 51 per cent increase in infrastructure spending compared with the previous five‑year period.

This investment will support the continued delivery of safe drinking water and sewerage services for the Victorian community while maintaining vital infrastructure.

The draft decision approves a minor reduction in waterways and drainage charges for 2026–27 before inflation:

• $124 for owner occupiers, down from $125 in 2025–26
• $186 for small business customers, down from $188 in 2025–26

Melbourne Water can now respond to the draft decision.

Anyone wishing to provide feedback can do so via Engage Victoria until 1 May 2026. A public forum will be held on 23 April 2026 at 5pm.

The commission will publish its final decision in June 2026, with new prices taking effect from 1 July 2026.

The commission has also released its draft decision on North East Water’s prices.

Quotes attributable to Essential Services Commission Chairperson and Commissioner Gerard Brody

“The commission has considered whether Melbourne Water’s proposed prices balance the need to deliver safe drinking water and invest in infrastructure, with the need to minimise cost pressures on retail water businesses and consumers.”

“Our draft decision includes a 7 per cent reduction to Melbourne Water’s proposed infrastructure expenditure, while still enabling them to spend more in this area than in the previous five‑year period.”

“The commission thanks customers and interested parties for their submissions and participation to date. We value and encourage feedback on our draft decision to help inform our final decision on Melbourne Water’s pricing proposal.”

Background

The commission issues price determinations that set the maximum prices water businesses may charge customers. These prices are based on an assessment of the efficient costs required to deliver services, including high‑quality drinking water, reliable and secure supplies, and meeting environmental standards while supporting a growing population.