The Independent Pricing and Regulatory Tribunal (IPART) has released a draft determination outlining the prices that Sydney Water is allowed to charge customers from July 2016 to June 2020.
IPART said its proposed prices will see Sydney Water customers saving around $100 a year on their water bills due to reduced operating expenditure, reduced capital expenditure and lower financing costs.
The overall revenue that IPART has allowed in the draft determination is $118million (1.2 per cent) lower than the proposal put forward by Sydney Water for the four year period.
Sydney Water Managing Director, Kevin Young, said the draft determination proposed lower prices for customers and further reductions in expenditure.
“Sydney Water is supportive of any proposal to reduce financial pressure on customers, however to promote their long term interests, we need to balance any bill reduction with the right amount of spending,” Mr Young said.
“We need to ensure that we continue to provide quality services to our customers into the future.
“We advocated for lower bills for customers in our proposal to IPART, and our proposal balanced these customers’ needs and long term service requirements.”
IPART Chairman, Dr Peter Boxall said, “We aim for Sydney Water to be as efficient as possible and to pass those savings onto customers, while maintaining the revenue required to meet its current service levels.
“Under our draft decisions, the annual water and wastewater bill of a typical residential house would fall by $103 in 2016-17, with small businesses using similar volumes of water realising average savings of $98. Bills would increase thereafter at the rate of inflation.”
IPART’s draft decisions include a reduction of $0.31 per kL in water usage charges to $1.97 per kL (or $2.01 per kL in 2016-17, with inflation), and lower fixed water and wastewater service charges for most customers.
In the event that the Sydney Desalination Plant (SDP) is required to operate, IPART has also decided to include an explicit amount in the water usage charge to reflect the additional costs of water in times of drought.
Mr Young said this was a draft determination based on a robust and transparent process that gave all stakeholders and the community a chance to have a say.
Sydney Water will now review the draft determination and deliver feedback to IPART.
“We will now read the document with interest, examine the details and provide our response to IPART by 18 April,” Mr Young said.
Sydney Water proposes prices to IPART before the end of each price path. IPART considers those submissions as well as those from other organisations.