​Melbourne Water has released a consultation paper outlining its proposed investment in essential infrastructure and corresponding charges for the five-year period from 2016-17 to 2021-22.

The 2016 Price Review consultation paper marks the start of a year-long process that culminates in the setting of Melbourne Water’s wholesale charges for water and sewerage services and the waterways and drainage charge from 1 July 2016.

The paper will be open for public consultation until the end of July 2015. In October, Melbourne Water will submit its 2016 Price Submission to the Essential Services Commission (ESC), the independent regulator responsible for determining water prices in Victoria.

The key components on which Melbourne Water will be seeking public feedback include:

  • How the waterways and drainage charge is invested
  • Options for reforming the way the non-residential waterways and drainage charge is calculated
  • Options around paying for the Victorian Desalination Project.

Customer and Strategy General Manager Ben Furmage said the next six weeks were an opportunity for Melburnians to help shape the direction of their water, sewerage, river health and drainage services.

“Community feedback is an essential part of our price review process,” said Mr Furmage.

“We’ll be seeking feedback through a range of forums and channels, and I encourage everyone who helps pay for these essential services to have their say.

“As a wholesaler, our water and sewerage charges comprise more than half of water and sewerage costs paid by households. We will be working closely with Melbourne’s local water utilities to enable the savings included in our wholesale charges to be passed on to households and businesses.

“We’ll also be asking customers for their thoughts on how we should invest waterways and drainage charge revenue, which is used to improve the health of rivers and creeks and protect properties from flooding,” he added.

Mr Furmage said the Essential Services Commission had asked Melbourne Water to consider options to move away from the property value-based method of calculating the non-residential waterways and drainage charge to a more cost reflective structure.

“We’re asking for community feedback on ways in which we could modernise the waterways and drainage charge. One option might be a move from the current property-value based approach to a flat rate. This means everyone would pay the same rate, similar to how the residential charge is calculated,” said Mr Furmage.

“Another option is to transition to a charge that is based on the impact a property has on waterways and flood risk,” he said.

As part of the price review consultation, the Essential Services Commission is also asking Melbourne Water to seek feedback from customers about the way the desalination plant is funded.

One option could include spreading the cost of the plant over the 60 year average asset life, instead of over the 27 year contracted payment period.

The consultation paper also includes a proposed wholesale water and sewerage price decrease (around 6 per cent including inflation) to be paid by Melbourne Water’s direct customers, Melbourne’s local water utilities.

See a copy of the consultation paper.

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