The Australian Competition and Consumer Commission (ACCC) has released its final decision on how much WaterNSW can levy for infrastructure services in the Murray-Darling Basin.

The ACCC said most charges will increase during the 2016–17 period.

Ongoing drier conditions throughout 2015-16 resulted in lower than forecast water usage in all valleys, which in turn led to a shortfall in revenue from usage charges for WaterNSW, adding to the existing shortfall in revenue, carried over from 2014-15.

The ACCC’s pricing model allows charges to increase to recover a portion of the cumulative shortfall.

The ACCC considered the impact of higher individual entitlement and usage charges by estimating changes in customers’ expected bills.

Expected bills include the relevant entitlement charge as well as the usage charge.

In the Border, Gwydir, Namoi, Murray and Murrumbidgee valleys, the increases in bills over 2015-16 levels are expected to be less than three per cent in nominal terms.

There are larger increases of between 8 and 9 per cent for Lachlan Valley and Macquarie Valley high security entitlement holders (due to lower water availability in recent years) and for users in the Peel Valley.

Peel Valley charges will increase by 11.4 per cent (10 per cent in real terms) and are forecast to reach approximately full cost recovery levels for the first time.

ACCC Commissioner Cristina Cifuentes said, “The decision sets the charges in accordance with the method set out in our 2014 Determination, with some adjustments to take account of updated forecasts provided to the ACCC.

“After carefully considering how charge increases arising from updated usage figures and forecasts will likely affect customers, the ACCC has concluded that no further adjustments are necessary for price stability reasons.”

The ACCC released a draft decision for this review on 13 April 2016, with its final decision maintaining the approach taken in the draft decision.

Final charges are around 0.5 per cent lower than those in the draft decision, due to updated (lower) inflation figures.

This is the ACCC’s second and final annual review of WaterNSW charges.

From 1 June 2016, the NSW Independent Pricing and Regulatory Tribunal (IPART) will become the accredited regulator of WaterNSW’s charges under Part 6 of the Water Charge (Infrastructure) Rules 2010.

Jessica Dickers

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