Victoria’s economic regulator, the Essential Services Commission, has set revised maximum water tariffs for Coliban Water customers, to apply from 1 July.
The Commission has brought forward by two years increased variable water prices for urban customers but reduced fixed access charges over the same period.
In March, Coliban Water applied to the Commission for a price adjustment of the five-year pricing regime that was set in place from 1 July 2008, citing the ‘uncertain or unforeseen events’ mechanism.
As the basis for its proposed revision to prices, Coliban Water claimed unprecedented low water availability through inflows into its catchment storages that were unforeseen at the time of the formulation of its five-year water plan submitted in 2007-08.
Commission Chairperson Dr Ron Ben-David said water restrictions imposed by Coliban Water in response to continuing drought conditions had led to lower-than-expected revenue received from water sales in the period since July 2008.
Announcing the revised maximum water tariffs today in Bendigo, Dr Ben-David said the price adjustments would enable Coliban Water to stabilise its financial position after a number of years of cash deficits.
In its decision, the Commission has brought forward to 2010-11 the proposed 2012-13 variable urban water prices that it approved for Coliban Water in 2008. It has also reduced the fixed access charge for water by five per cent in 2010-11 and by another five per cent in 2011-12.
The revised prices apply to all urban water customers of Coliban Water but do not apply to sewerage charges or to rural (non-urban) customers.
Under the revised tariffs, households in Coliban’s Central pricing zone (Bendigo and surrounds) that consume 170 kilolitres (kL) of water a year will pay an increase of $110 on their annual water and sewerage bill in 2010-11, or about $50 above the previously scheduled price increase.
Annual water and sewerage bills will rise by around $56 to $740 in 2010-11 for residential customers who consumer 170 kL of water a year in Coliban’s Northern Rivers zone, which includes Echuca. This is about $15 higher than the previously scheduled price increase.
“These price increases will enable Coliban Water to strengthen its revenue from the start of the 2010-11 year. For this reason, the Commission has increased 2010-11 prices in the Central zone above the level proposed by Coliban Water,” Dr Ben-David said.
“But from 2011-12, water and sewerage bill increases will flatten out substantially, with 2012-13 bills marginally lower than those implied by the prices set in 2008.”
Dr Ben-David said the Essential Services Commission was aware of the impact of price rises on customers, and it would continue to ensure that Coliban Water had in place measures to help address affordability and hardship issues.
He said the Commission would also closely monitor Coliban Water’s financial position over the next three years.
“If we consider that the maximum prices that we have approved today result in unwarranted profits, then we will immediately initiate a further price review to return some of those profits to customers, in the form of lower prices,” Dr Ben-David said.