Our Role in Water Pricing

Water businesses are responsible for developing business plans for meeting their customers’ service expectations and meeting environmental and other regulatory requirements.

Water businesses’ plans include forecasts for infrastructure, operation and financing costs, as well as the prices charged to customers to deliver these services. These plans are also available to customers on the water businesses’ websites.

On a periodic basis, the Commission conducts a Water Price Review, whereby water businesses are required to develop a price submission setting out their proposed prices and service standards for the next pricing period (usually 5 years). The Commission then assesses the pricing submissions, guided by the requirements and principles set out in the legislation, including the Water Industry Regulatory Order (WIRO).

At the end of the price review the Commission makes a price determination, which specifies a price path and the maximum prices a water business can charge for its various services over the next pricing period.

Your water business can advise you when its next plan and price submission is being developed and how you can get involved.

You can find out more information about water price reviews on our website. You can also register here for updates from the Commission about all its projects.


What are fixed charges for?

In the past, tariff structures were designed so that fixed charges would recover water businesses’ fixed infrastructure and operating costs (fixed costs are most of the businesses’ costs) and the variable charge covered the actual cost of providing water.

Many customers have indicated they would like more control over their water bill. The Commission is open to water businesses proposing tariff structures which place greater emphasis on variable charges so that customers’ bills better reflect the amount of water used. We favorably consider any approach by water businesses to reflect customers’ preferences in their tariff structures.

My large family is very water efficient but we pay a higher price for water.

Some water businesses charge variable rates that increase as your water volume increases. The Commission recognises the impact this type of pricing can have on larger households. We favour approaches by water businesses that match prices with underlying costs.

If you are having difficulty paying a bill you should contact your water business and ask about its hardship program and whether you can pay your bills in a way that better meets your circumstances.

What are the “Parks Charge” and “Waterways and drainage charge” on my water bill?

The Parks Charge is collected once every year on behalf of the Minister for Water, and the state’s water department. Funds raised go to Parks Victoria, Zoos Victoria, the Royal Botanic Gardens and the Shrine of Remembrance for the development, management and maintenance of metropolitan parks, gardens, trails, waterways, and zoos.

The Waterways Charge is collected by water businesses on behalf of Melbourne Water. These funds provide services to manage the health of waterways, streamside vegetation, flood protection, and drainage services across the whole of the Port Phillip Bay Catchment.

Why do I pay service charges when I am not connected to the water main?

The Water Act 1989 allows water businesses to charge landowners if water and/or sewerage infrastructure is available to their property, even if it is not connected to their property.

Water businesses consider many options when planning how their customers pay for maintaining infrastructure. We encourage water businesses to consider all the costs and benefits, and to consult with different customer groups when structuring these and other charges.

If you are having difficulty paying a charge, you should contact the water business and ask about its hardship policy and whether you can restructure payments to better meet your circumstances.

Why do I now have to pay water and sewerage charges for each tenant rather than one charge for the whole block?

Water businesses have discretion as to how their fixed charges are levied. The trend in Victoria over recent years has been for fixed charges to be levied per dwelling rather than one charge for an entire block of flats or apartments. Some water businesses argue that if more people pay the charge, the average charge will be lower.


Essential Services Commission