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Council critical of planned price hike

Wednesday, 30th October, 2013

By Erica Visser

Essential Energy’s plan to hike up water costs will have a “dramatic impact” on the city, City Council has told the Independent Pricing and Regulatory Tribunal (IPART).

The company, which has the monopoly on water in Broken Hill, last month applied to IPART for a recurring 5.9 per cent increase in charges to fund $52 million in upgrades to water and sewerage infrastructure.

The increase does not include Consumer Price Index (CPI) and would apply from 2014 until 2018. 

The result would be an $80 increase in the average household’s water bill next year alone and rise more each year with the CPI.

The BH Chamber of Commerce has also made a submission to IPART, stating that the rise would “seriously threaten” the existence of more than half of the local businesses.

Council’s Manager of Infrastructure, Paul DeLisio, wrote Council’s submission to IPART.

“Given the substantial increases in water (and other utilities such as electricity) and the prevailing poor economic outlook, the impacts of the proposed increase will be dramatic,” he wrote.

Mr DeLisio said in the submission that factors important to Broken Hill should be taken into consideration by IPART. These included the dry climate, lead-contaminated dust, the number of Council parks and gardens that need to be maintained with limited income; and an ageing population that would struggle to pay more for water.

However, Council’s General Manager, Therese Manns, said that she was unable to comment on whether the proposed increase was fair.

“The submission was made on an issues paper which outlined the process IPART will follow in order to determine if 5.9 per cent is a fair increase,” she said.

“Until a detailed assessment is made in relation to 

Essential Water’s efficiency and asset management planning, I am unable to make comment.”

Council paid $733,000 for water last financial year - $200,000 more than the previous year.

It has predicted that its water bill will be around $920,000 in five years’ time.

Ms Manns said that further increases will be hard to absorb, but did not say whether ratepayers would have to bear the burden.

“Water security is certainly an issue for our Council and for the community. In relation to costs for Council, it will be difficult to absorb such an increase given our own income restrictions and current financial situation,” she said.

“As part of an overall review of our effectiveness and efficiency as a Council, we will be considering whether there are any additional water-saving measures that can be implemented to reduce our own costs in this area.”

South resident Larry Angell brought the topic up at Council’s September monthly meeting.

Mr Angell said that he was worried that Council would raise rates in 2014/2015 to pay for the extra water charges.

“Broken Hill has an ageing population and we are almost a welfare-dependent community,” he said yesterday.

“With (Essential Energy) raising rates higher than the inflation level, somewhere along the line something has to give.

“Our water bill is fairly high as it is; people will stop watering lawns, plants and trees. And then there’s the potential for lead dust storms as seen in the forties, fifties and sixties.”

Mr Angell said that he entered local garden competitions but now planned to “pull up the lawn” and pave his yard due to the increases.

“We are continuously hit with increases and we just can’t keep it up,” he said.

“It’s good to see that Council has put in a submission as they are the civic leaders. I would’ve liked to see how much extra Council will have as an ongoing cost to water their parks and lawns.

“Water is a very expensive part of a company bill and they’re going to have to bear the cost somewhere.”

Essential Energy prices have not risen since July 2012. 

IPART will hold a public forum in Broken Hill on November 19.

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