• ESC releases final pricing decisions for water companies

    2018-06-19

    ESC releases final pricing decisions for water companies

    The Essential Services Commission (ESC) has today released its water pricing decisions on 12 of the state’s 17 water corporations – building on the results of four fast-tracked decisions released last month.

    UDIA Victoria is pleased to inform industry that our advocacy activities and engagement with the ESC throughout the 2018 water price review have resulted in minimal increases on existing water charges. This follows on from a capped rate environment that was secured for industry by UDIA Victoria in collaboration with the Property Council during the previous ESC water price review process.

    Please see below an overview of the changes to new customer contribution (NCC) charges for Western Water, City West Water, Barwon Water,  North East Water, South East Water, Yarra Valley and Coliban Water.

    Please click here to see the ESC final decisions for all 17 Victorian water businesses.

     

    Western Water

    Western Water’s price submission proposed to a 36.7 per cent increase for NCCs over a two-year period; an increase which UDIA Victoria strongly opposed in our submission, resulting in a final decision by the ESC that reduces the proposed increases to 10 per cent per annum in real terms for 2018-19 and 2019-20. 

     

    City West Water

    The final decision approves City West Water’s proposed NCCs, including its method of calculating negotiated contribution charges.

    This includes City West Water’s proposal to maintain its standard water and sewerage NCCs at the 2017-18 level until 2022-23 (plus annual adjustments for inflation).

     

    Barwon Water

    The final decision approves Barwon Water's proposed NCCs, including its method of calculating negotiated contribution charges. 

    Barwon Water proposed a restructure of its new customer contributions, offering different standard NCCs for infill and greenfield developments in response to
    feedback received from developers. Barwon Water proposed that a development would be considered infill if it could be serviced by existing infrastructure and did not trigger the need for a capacity upgrade.

    For infill contributions, Barwon Water proposed a standalone standard water charge that is a 78.7 per cent reduction on the 2017-18 charge. This one-off decrease is proposed to be sustained throughout the regulatory period, and is caused by the lower capital outlay for infill connections. 

    For greenfield contributions, Barwon Water proposed an increase of 5.9 per cent on the 2017-18 charge. This one-off increase is proposed to be sustained throughout the entire regulatory period.

    Barwon Water proposed to remove standard NCCs for sewerage connections due to reduced capital expenditure forecasts in sewerage assets catering for growth.

     

    North East Water

    The final decision approves  North East Water’s proposed NCCs, which included an annual real increase of 0.45 per cent on its standard water and sewerage new customer contribution charges until 2025-26.

     

    South East Water

    The final decision approves South East Water’s proposal to maintain all standard NCCs at the 2017-18 level until 2022-23. 

    The ESC has also accepted South East Water's proposal to increase its existing base level sewerage backlog connection charge from $1500 in 2017-18 to $2500 in 2018-19.

    South East Water will maintain its existing method of calculating brought-forward backlog charges in areas of the Mornington Peninsula.

     

    Yarra Valley Water

    The final decision approves Yarra Valley Water’s proposal to continue to phase-in increases to location specific charges in areas where contributions are below full cost recovery.

    The transitional arrangements include the following increases to the current charges of $1,812.75 each for water and sewerage:
    - in the new urban growth boundary, a $170 annual increase for water and sewerage contributions ($340 combined) for each year of the regulatory period, and
    - in the Greenvale/Mickelham area, a $170 annual increase for water and sewerage contributions ($340 combined) during 2018-19 and 2019-20 followed by a $17.50 increase ($35 combined) in 2020-21.

    Yarra Valley Water will maintain the existing charges for standard NCCs and location specific charges in Epping North, as well as the existing backlog connection charge.

     

    Coliban Water

    The final decision accepts Coliban Water’s proposed continuation of its existing standard sewerage NCC, including its split by ‘growth’ and ‘non-growth’ categories.

    For negotiated NCCs, the draft decision proposed to approve Coliban Water’s proposed method of calculating a charge in accordance with the requirements of our new customer contribution pricing principles. The UDIA submission raised concerns about the lack of publicly available information from Coliban Water on development servicing plans, negotiation protocols, explanations of where and when standard charges apply, and circumstances in which a negotiated charge would be applicable. 

    The ESC has addressed these concerns in its final decision, which encourages Coliban Water to update and publish any development servicing plans and negotiation
    protocols to assist developers understand the underlying assumptions of its NCCs.

    Go to the 2018 ESC water price review final decisions.