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Water price hike

Tuesday, 16th March, 2010

The average household can expect their water bill to increase by around $233 over the next three years, according to a draft report released by the NSW Government's Independent Pricing and Regulatory Tribunal (IPART).

IPART's draft of future water and sewerage prices for Broken Hill was released yesterday. The annual water and sewerage bills for both pensioners and non pensioners who use 300 kilolitres of treated water each year will rise on average by 9.5 per cent a year, and 7.7 per cent a year respectively, plus inflation. Meanwhile increases in bills for people at Silverton who use 300 KL a year of chlorinated water will be $47.86 for pensioners and non-pensioners in total also over three years, plus inflation.

The price increases are less than those sought by Country Energy, which ranged between 10 and 20 per cent each year for three years. "Smaller increases are required to fund water and sewerage services in the Broken Hill area over the next three years to ensure that residents continue to receive a safe and reliable water service," said IPART CEO Jim Cox.

At a public meeting held in the city in November last year, Country Energy said that large increases would be needed to achieve full cost recovery of its water and sewerage businesses. However IPART found scope for Country Energy to cut its operating costs over the next three years by 12 per cent, and to reduce the cost of a number of the body's planned capital works projects.

"Our investigations have found that there are a number of areas where the proposed amount of capital expenditure is excessive," Mr Cox said. "A key reason for this relates to the allocation of overheads and allowances. The allocations that Country Energy makes to its water and sewerage capital projects in Broken Hill are much higher than typically expected in the water industry."

Despite the many areas where Country Energy can cut costs, Mr Cox said there was still a need to increase customers' bills. "Our investigations show water and sewerage bills for Broken Hill residents using 200 kilolitres of water per year are the second lowest in NSW. "Even after adjusting for a higher level of average water consumption in Broken Hill, bills are still lower than in a number of other regional areas including Eurobodalla, Kempsey and Tamworth. "IPART is aware of the effects of its decisions on the high proportion of pensioners in the Broken Hill area."

Pensioners' bills will continue to be offset by the NSW Government's pensioner rebate scheme. Mr Cox said that while IPART does not decide on the size of the rebates for pensioners, it has recommended to the Government that it review the sufficiency of current rebates, and amend them to take account of the proposed increases to water and sewerage bills.

The draft determination is available on IPART's website at http://www.ipart.nsw.gov.au. Alternatively, a copy can be obtained by contacting Ms Jody Thornton on (02) 9290 8472. IPART is seeking comments on the various matters and decisions contained in its report and draft determination. Comments need be provided by Friday, April 16. IPART will release its final determination and report in June with prices to apply from July 1.

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