We are reviewing Melbourne Water’s prices to apply from 1 July 2026.
Melbourne Water price review 2026
- Guidance released19 November 2024
- Price submission due1 October 2025
- Consultation opens10 October 2025
- Consultation closes12 December 2025
- Draft decisionMarch 2026
- Consultation closesMay 2026
- Final decision and price determinationJune 2026
Overview
We are reviewing Melbourne Water's new water prices to apply from 1 July 2026
In early October 2025, Melbourne Water provided us with a price submission outlining the prices and key outcomes for its customers. We will assess the price submission and make a final determination on the maximum prices it can charge for its services from 1 July 2026.
We want to hear from you
Our first consultation period on Melbourne Water's proposal has now opened on Engage Victoria and will close on 12 December 2025.
Guidance to Melbourne Water
In November 2024, we provided Melbourne Water with guidance on what it should include in its price submission.
The guidance paper also explains our approach and methodology to assessing water businesses’ price submissions and making a price determination.
We have introduced the backward-looking 'Performance' element of PREMO, which holds a business accountable for its price and service commitments from the previous price review. As this is the second review under PREMO for Melbourne Water, which participated in the 2021 review, its price submission will need to demonstrate how it is building on the previous proposals to deliver great value to its customers.
Learn more about water price regulation
Read more about how we regulate the water sector.
Resources
Melbourne Water's price submission
Guidance
Customer fact sheet
2026 water price review customer fact sheet
Melbourne Water has provided its price submission on proposed prices and key outcomes for its customers. We will assess the price submission and make price determinations on the maximum price Melbourne Water can charge for its services from 1 July 2026 to 30 June 2031.
Snapshot of Melbourne Water's price submission
| Bills | Tariffs | Outcomes |
|---|---|---|
The bill impact of Melbourne Water’s proposal on average household bills in metropolitan Melbourne will be flat in 2026-27 and then increase by up to 1.5 per cent or $17 per year to 2030-31. This excludes inflation, which is added to bills each year*. The impact to average household bills in other areas is mixed. | Melbourne Water proposes significant reforms to bulk water tariffs and other reforms to bulk sewerage tariffs. Melbourne water proposes a minor reduction to waterways and drainage charges. | Melbourne Water worked with its customers to develop five customer outcomes for the 2026–31 period. The outcomes have been simplified and reduced in number, from six to five. It will maintain its existing Guaranteed Service Levels for the metropolitan water businesses and add a GSL for water quality to apply to all connected water retailers. |
*Melbourne Water’s forecast customer bill impacts are based on the change in total Melbourne Water bulk and sewerage costs only. They exclude the impacts of water corporation 2028 submissions, desalination water orders and other pass-throughs.
You can access latest independent forecasts for inflation at Australian Bureau of Statistics.
What are the changes to prices and tariffs?
Melbourne Water proposes:
- Reforms to bulk water tariffs associated with the Victorian Government’s implementation of the South-Central Pool Bulk Entitlements. This involves introducing new bulk entitlements that will enable all connected water corporations to access water from the South-Central Pool as needed within a collective volumetric cap, rather than with individual volumetric entitlements on which bulk water headworks pricing had been based in the past.
- To update the split between variable and fixed bulk water charges for more demand-revenue sharing between Melbourne Water and its customers.
- Reforms to bulk sewerage tariffs to more equitably recover fixed charges. This includes replacing separate disaggregated Eastern and Western bulk sewerage transfer charges with a common transfer charge.
Melbourne Water forecasts a minor reduction to the waterways and drainage tariffs (less than 1 per cent over the five-year period). A flat charge will replace the current rate in $ Net Annual Value for all non-residential customers.
What are the changes to bills?
Melbourne Water provides wholesale water supply and sewage management services to retail water corporations that we also regulate.
Melbourne Water provided us with indicative bills for average household customers in each of these retail water corporations, reflecting the impact of its proposed changes to bulk water and sewerage prices and tariffs only. Actual household bills also depend on factors such as the amount of water and services you use and will additionally include impacts from water corporation 2028 submissions, desalination water orders and other passthroughs.
Average household water and sewerage bills (not including inflation)
| Water corporation | 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
|---|---|---|---|---|---|---|
| Greater Western Water | $1,110 | $1,110 | $1,127 | $1,137 | $1,147 | $1,157 |
| South East Water | $1,057 | $1,057 | $1,072 | $1,073 | $1,074 | $1,075 |
| Yarra Valley Water | $1,114 | $1,114 | $1,130 | $1,123 | $1,115 | $1,107 |
| Barwon Water | $1,183 | $1,180 | $1,179 | $1,178 | $1,177 | $1,181 |
| South Gippsland Water | $1,405 | $1,428 | $1,437 | $1,447 | $1,460 | $1,476 |
| Westernport Water | $1,394 | $1,394 | $1,396 | $1,398 | $1,400 | $1,403 |
| Gippsland Water | $1,492 | $1,481 | $1,480 | $1,482 | $1,482 | $1,483 |
Waterways and drainage tariffs (not including inflation)
| Customer group | 2025-26 | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
|---|---|---|---|---|---|---|
| Residential ($/year) | $125 | $124 | $124 | $124 | $124 | $124 |
| Rural ($/year) | $69 | $68 | $68 | $68 | $68 | $68 |
| Non-residential ($/year)* | $188 | $186 | $186 | $186 | $186 | $186 |
*A flat charge replaces the current $NAV for all non-residential customers.
What are the outcomes for customers?
As part of their price submissions, water businesses must propose a set of outcomes that they will deliver to their customers over the pricing period. The set of outcomes, measures and targets are unique to each business, reflecting those performance elements that matter most to its customers, as revealed through the customer engagement process.
Melbourne Water worked with its customers to develop five outcomes:
- Safe and reliable bulk water supplies for now and the long term
- Environmentally sustainable and reliable bulk sewerage services
- Healthy, resilient waterways
- Urban drainage and flood resilience
- A valued partner in water cycle services.
Melbourne Water proposes to retain its current Guaranteed Service Levels (GSL) for each of the metropolitan retailers and introduce a new GSL for water quality where it will provide customer rebates for unplanned water quality interruptions. This would apply to all connected water retailers.
Melbourne Water also proposes to:
- Increase affordability assistance to vulnerable customers. This includes actions such as amplifying existing hardship programs and introducing a new waterways and drainage hardship grant.
- Make upgrades to water production and storage assets to improve Melbourne’s water supply security through optimising storage capacity and providing for more efficient water transfers.
- Better protect Melbourne’s natural environment through making investment in waterways management to improve vegetation conditions and towards their target of net zero emissions by 2029-30.
What are the major works that will go on around you?
| Project | Detail | Total ($ million) |
|---|---|---|
| Western Treatment Plant Full Preliminary Treatment Augmentation | This project will increase treatment capacity at the plant to ensure it can meet future demand while moving from lagoon-based treatment systems to more mechanical systems that will reduce environmental impacts. This project is currently in the design phase. | $337 ($291 in the 2026–31 regulatory period) |
| Eastern Treatment Plant Primary Settling Tanks and Grit Tank Augmentation | This augmentation will increase the plant’s capacity to handle growing sewage loads within the area and enhance the treatment system’s resilience to high demand conditions. | $304 ($178 in the 2026–31 regulatory period) |
| Maroondah Reservoir Outlet and Aqueduct –Stage 3A | Replacement of the outlet at Maroondah Reservoir and partial replacement of the Maroondah Aqueduct will increase water transfer efficiency, and ensure water quality and safety requirements are met. | $225 ($157 in the 2026–31 regulatory period) |
| Western Trunk Sewer – Shallow Conduit Rehabilitation | Renewing 4.4 kilometres of the Western Trunk Sewer to meet safety and reliability requirements while transporting sewage to the Western Treatment Plant. | $204 |
| Cardinia Dam Safety Upgrade Works | Safety upgrade works will allow the removal of current operating restrictions and enable the use of the dam’s full capacity, supporting the efficient use of Melbourne Water’s existing water resources. | $191 |
How much revenue is required from 2026 to 2031?
We require each business to tell us what revenue it will require for the next five years. This helps us understand how Melbourne Water calculated the prices in its submission.
Melbourne Water forecasts that it needs $5.5 billion of operating expenditure and $7.9 billion of capital expenditure to provide its services and cater for expected customer growth over the next five years. To fund this, Melbourne Water requires $10.1 billion in revenue, an average of $2.0 billion per year. This is an increase of $111.3 million per year on the annual average during Melbourne Water’s current regulatory period ($1.9 billion per year).
Send us your feedback on Melbourne Water’s proposal
Submitting your feedback to Melbourne Water’s price submission by 12 December 2025 will help us prepare for the release of our draft decision. You can upload your submission via Engage Victoria or send it to us via the below contact details:
- Email: water@esc.vic.gov.au
- Mail: Essential Services Commission, Level 8, 570 Bourke Street, Melbourne Victoria 3000
You can also call us on 03 9032 1300 to discuss your options.