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Wednesday, 20th November, 2013

By Emily Roberts

Essential Energy should stagger its infrastructure overhaul to offset the impact of a price increase, Chamber of Commerce president Ann Rogers told a public hearing yesterday.

The company has applied to the Independent Pricing and Regulatory Tribunal (IPART) for a 5.9 per cent increase in water charges every year for the next four years.

The hearing into water prices in the city was held at the Civic Centre where Ms Rogers told IPART that the infrastructure needs to be prioritised and done over a longer period.

“I understand that Essential Energy’s equipment is all ageing,” she said.

“Instead of trying to fix it in one big hit, they might need to put it in priority and spread it over a longer time period.”

Ms Rogers said the meeting went well and there was a lot of insight from both parties.

Essential Energy’s Chief Operating Officer Gary Humphreys said the price rise was needed to accommodate the infrastructure changes.

“We have an ageing infrastructure that requires significant upgrade,” Mr Humphreys said.

“Our business doesn’t make a profit. We have been improving operational costs but reducing staff and having a hiring freeze.

“The capital expenditure is $55.2m.

“We have requested the price increase of 5.9 per cent plus CPI. We are aware that the increase may not be welcome but we need our equipment to be safe and reliable.”

Mr Humphreys said for residents who used 300 kilolitres of water per year it would only be an $80 increase each year per year.

He said the Treasury Subsidy previously offered by the NSW Government expired as on June 30 this year.

But Ms Rogers said local businesses would suffer from the price rise.

“We know of a couple of businesses that are already down-sizing,” she said.

“If this goes ahead and people don’t get any subsidies it will be a detriment to the businesses of Broken Hill.”

IPART Chairman Peter Boxall said the public hearing had received a positive response.

“It was a well-attended public consultation. There were a lot of constructive comments,” Dr Boxall said. “We will take on board what has come through. then we will decide the maximum prices that can be changed in the Broken Hill area.”

Dr Boxall said a number of issues were raised by the community.

“Issues included the size of the price increase, Essential Energy’s capital expenditure,” he said.

“We thought it was an important part of the process. Not always did people agree but we can use that in the draft determination.”

Another issue that was discussed was locals cutting back on their water use and the concern about what that meant for keeping lead dust down.

IPART will release a draft in March which people will be able to comment on. The final determination will be released in June.

Essential Energy proposed investment in infrastructure include: 

  • Stephens Creek Reservoir pumping station - secure water supply in the event of major failure Cost - $4.7m.
  • Wills Street Waste Water treatment plant - ageing infrastructure required replacement. Cost - $0.7m in 2017-18 for planning and design (total cost $25m).
  • Stephens Creek and Imperial Lake Dam Wall rehabilitation - dam safety committee has pushed for the need to mitigate risk of failure in flood events. Cost - Stephens Creek $6.6m, Imperial Lakes - $3.6m.
  • Menindee and Umberumberka pipeline - prioritised replacement. Cost - $2.1m
  • Rocky Hill and Mica Street Service reservoirs - increase supply availability. Cost - $9.4m.
  • Water reticulation - network needs priority repairs. Cost - $2.9m.
  • Stephens Creek maintenance - to cut evaporation and hold more water. Levees need repairs to reduce evaporation and work is required to increase intake pond storage capacity to improve water quality. Cost - $3.7m. 
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