We are reviewing Melbourne Water's prices to apply from 1 July 2021
Melbourne Water price review 2021
Guidance paper released13 November 2019
Additional guidance released18 August 2020
Melbourne Water price submission9 November 2020
Consultation closes5 February 2021
Draft decision25 March 2021
Consultation closes4 May 2021
Final decisionJune 2021
We released our draft decision on Melbourne Water's prices for the period 1 July 2021 to 1 July 2024 on 25 March 2021. This review informs the maximum charges customers pay for their services. We are seeking feedback from Melbourne Water, customers and stakeholders.
This review is relevant to water customers living in and around the Melbourne metropolitan area
Melbourne Water provides wholesale water supply and sewage management services to retail water corporations that we also regulate. These retail water corporations are City West Water, South East Water, Yarra Valley Water, Western Water, Barwon Water, South Gippsland Water and Westernport Water.
Melbourne Water also provides drainage and waterways services in and around Melbourne.
View our draft decision
You can also view our media release.
Key facts from our draft decision
Prices would fall as a result of our draft decision
As a result of our draft decision, prices would fall, adding to price reductions proposed by Melbourne Water. This is due to our proposed cuts to Melbourne Water’s revenue and translates to average bill reductions of up to $7 per year for a typical residential household.
Melburnians would continue to receive high quality drinking water
Melburnians would continue to receive high quality drinking water, safe treatment and disposal of sewage, and new investment in waterways and drainage. Melbourne Water would continue to reduce its environmental footprint and respond to climate change.
We propose to approve Melbourne Water’s prices for the next three years
Melbourne Water proposes a five-year regulatory period starting 1 July 2021. Our draft decision proposes a three-year regulatory period. This shorter period would allow Melbourne Water to put forward a new proposal as a clearer understanding of the impacts of the coronavirus pandemic emerges in the coming years.
As part of its price submission, Melbourne Water consulted with customers to develop six outcomes to guide service delivery during the 2021–2026 regulatory period. It also identified measures and targets that it will use to report on its performance against these outcomes.
Some of the ways Melbourne Water plans to address value for customers include:
- ensuring customers have access to safe and reliable water and sewerage services (largely through managing environmental risks and renewing older assets)
- maintaining the health of Melbourne’s river systems
- reducing flood risks
- making more green space available to customers.
Our draft decision accepts a number of Melbourne Water’s investment proposals that support the environment and respond to climate change, including:
- an additional $4 million to meet its carbon offsets, pledges and reduction activities
- an additional $11 million for waterway and drainage activities such as wetland maintenance and sediment disposal, vegetation for environment and amenity, and increasing land and water access for the community
- investment in and maintenance of the Eastern Treatment Plant solar generation plant.
Consultation on our draft decision
We invited feedback from stakeholders on our draft decision via Engage Victoria before we make a final decision and price determination in June 2021. Our consultation ended on 4 May 2021.
Our virtual public forum
We held a virtual public forum on 22 April 2021. The forum provided an opportunity for interested parties to discuss key features of our draft decision. See a recording of the forum below:
Feedback on our draft decision
We sought feedback on our draft decision on Melbourne Water's 2021-26 price submission via Engage Victoria. We received 10 submissions including from the general public, VicWater, Yarra Riverkeeper Association, Consumer Action Law Centre, Newgate Research, Urban Development Institute of Australia - Victoria, a joint submission between six Victorian water businesses and a response to our draft decision from Melbourne Water.
Submissions covered topics including:
- Environmental outcomes
- PREMO rating
- Willingness to pay
Feedback that informed our draft decision
We sought feedback on Melbourne Water’s 2021-26 price submission from December 2020 to 5 February 2021 via Engage Victoria. We received seven submissions from the general public, and four from organisations: Hume City Council, Yarra Riverkeeper Association, Friends of Steele Creek and Werribee River Association.
Submissions from the public covered topics including:
- the proposed pricing for sewerage service
- lack of incentives for water savings
- the waterways and drainage charges.
The submission from Hume City Council covered topics including:
- the support for the increased protection of natural wetlands
- a request to investigate the timing for the construction of end of line stormwater quality treatment assets
- support for the Sunbury and Upper Merri Creek stormwater harvesting infrastructure.
The submission from Yarra Riverkeeper Association covered topics including:
- support for the waterways and drainage charges proposal
- customers desire for healthy biodiverse waterways as a result of coronavirus
- Melbourne Water’s engagement and its regulatory obligations for waterways’ environmental health.
The submission from Friends of Steele Creek covered topics including:
- support for the increased waterways and drainage charges
- relevance and consideration of the consultation process and finding.
The submission from Werribee Riverkeeper Association covered topics including:
- support for the increased water ways and drainage charges
- challenges for the waterways including endangered species
- an increased use of the waterways due to the coronavirus pandemic.
Access all of our submissions
View a full list of submissions in the ‘resource’ tab of this page.
How we're reviewing Melbourne Water's prices
We are undertaking this review under our PREMO water pricing approach, which includes new incentives for water businesses to deliver outcomes most valued by customers. We review the price submission against the Water Industry Regulatory Order (2014), the Essential Services Commission Act 2001, and the guidance we provided water businesses in November 2019 and August 2020.
As part of the water price review process, Melbourne Water can send us submissions on its proposed prices and key outcomes. Once we make a determination on these proposals, we create an annual tariff schedule for Melbourne Water. The schedule outlines the maximum prices Melbourne Water can charge its retailers for specific services, such as water delivery and sewage processing. And the maximum prices it can charge consumers of waterways and drainage services.
Learn more about water price regulation
Read about how water bills are calculated and how we regulate the water sector.
Feedback on our draft decision
Submissions to our draft decision
Melbourne Water's 2021 price submission
Accessible word versions
Submissions to Melbourne Water's price submission
In addition to our 2019 guidance, we updated our guidance in 2020 to ensure the effects of coronavirus pandemic are reflected in Melbourne Water's 2021 price submission