Big water user bills to fall under Icon Water's proposed new pricing
31 August 2017 Katie Burgess
The average Canberra household will pay an extra $27 for water and sewerage next year while businesses will see their bill drop by $269, under a new pricing structure proposed by Icon Water.
The water supply charge would double over the next five years amidst what it described as a "minor rebalancing" of its water prices in a price proposal to the Independent Competition and Regulatory Commission.
Tier one water users, who use up to 50 kilolitres per quarter, would see the price they pay per kilolitre rise by 16 cents to $2.84 between 2018 and 2023.
Tier two users, who use over 50kL, would see their price drop 43 cents to $4.95 per kilolitre from next year.
The average Canberra household uses 200kL of water per year, which means their bill would increase by $27 next year and $30 by 2023
Larger households that use 300kL per year will see a drop in their bill of $12 next year but increase by $30 by 2023
Businesses using 1000kL per year with 10 billable toilet fixtures would see their bill fall by $269 next year but rise by $76 in 2023.
The proposal would mean most water and sewerage bills would increase by 2.3 per cent per year, "lower than the forecast inflation rate", Icon Water's managing director John Knox said.
Chief financial officer Sam Sachse said the pricing structure was compiled with "price affordability front of mind".
However the water supply charges would increase by $20 a year over the next five years, from $104 in 2018-19 to $200 in 2022-23.
That falls short of reforms the ICRC considered in its 2016 tariff review, that could have seen ACT residents pay an annual water supply fee between $605 and $865 but is still double the current charge.
Mr Sachse said the "measured and gradual change" was a result of customer feedback.
"Through the Talking Icon Water engagement program, customer feedback highlighted a pricing structure that balances water efficiency while being affordable," Mr Sachse said
"Reducing the tier two tariff by 8 per cent improves affordability for larger residential customers, such as larger families or residents with large gardens."
Icon's submission said the water bill for the average Canberra household was the fourth cheapest of all Australian capitals, with its fixed supply charge one of the lowest of any major water utility in Australia.
However the price paid by non-residential customers was at least $10,000 more that the next highest city, with Icon's tier two pricing among the most expensive of major Australian utilities.
ClubsACT chief Gwyn Rees said while the tier two cut was a positive move, the proposed pricing structure fell short of what as required to stop large users going off-network.
"If this continues to occur, it will be the residential user that will pick up the bill," Mr Rees said.
"In nearly every, Australian state or territory, commercial rates exist and provide better certainty for business and clubs. The ACT's water will remain expensive by any measure."
Mr Sachse left the door open for a further shake-up of the tariff system in future.
"Introducing a commercial tariff would have introduced large bill impacts for small and large non-residential users due to the one tier structure," he said.
"We believe our proposed structure is a step in the right direction in being able to introduce a non-residential tariff in subsequent regulatory periods."
Date: 15th August, 2017